AccountTECH Index Reports: Labor and Non-Wage Expenses October 2025

October 2025 Index Data Signals Stronger Operational Efficiency

BOSTON, Jan. 28, 2026 /PRNewswire/ -- October 2025 data from the latest industry expense indices reveal a clear shift toward operational discipline across real estate firms, with both non-wage expenses and labor costs continuing to trend downward year over year. The combined results suggest that companies are not only cutting costs, but doing so strategically—improving efficiency without sacrificing productivity.

Non-Wage Expenses: Discipline Holding Into October

Non-wage expenses remain significantly improved compared to 2024 levels. While reductions began earlier in the fall, October data confirms that firms have maintained tighter control over controllable and operational spending.

Industry analysis continues to show a strong relationship between non-wage expense levels and profitability. Companies with non-wage expenses exceeding 10% of income face significant challenges achieving profitability, while consistently profitable firms tend to operate within the 7–8% range. October results indicate that more firms are aligning their cost structures closer to these profitability benchmarks.

Notably, cost discipline is evident across both profitable and unprofitable companies. Historically, unprofitable firms have struggled to meaningfully reduce expenses, but recent data shows that these companies are now actively adjusting their spending models.

Another key October insight is the continued increase in non-wage expenses per agent, even as total expenses decline. This pattern reflects ongoing headcount optimization, where firms reduce the number of non-productive agents, resulting in lower overall costs but higher expenses when averaged across a smaller, more productive agent base. In this context, rising expenses per agent alongside falling total expenses signals healthier operational decision-making.

Labor Costs: October Extends the Downward Trend

Labor costs continued to improve in October 2025, declining to 5.3% of income, down from September and well below year-over-year levels. This marks another step forward in aligning compensation structures with current revenue realities.

Wages per agent also declined month over month in October, reinforcing the broader reduction in labor costs. Unlike the same period in 2024—when labor expenses spiked sharply—October 2025 reflects a more measured and sustainable approach to workforce management.

When viewed across the full year, the labor cost trend line shows consistent improvement, indicating that firms are not simply reacting to short-term pressures but implementing longer-term staffing and compensation strategies.

A Clear Message from the Data

Together, the October 2025 labor and non-wage expense indices point to a real estate industry that is becoming more intentional, more efficient, and more financially disciplined. Companies are not just relying solely on revenue growth to drive profitability; they are actively reshaping cost structures, optimizing headcount, and aligning expenses with performance.

As firms head into the final months of the year, the data suggests that those who continue to maintain non-wage expenses below critical thresholds and keep labor costs aligned with income will be best positioned for sustainable profitability in a tighter margin environment.

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SOURCE AccountTECH