Santa’s comp is costing the earth

What is Santa’s wage bill??

If you wanted to know, a normal place to start would be checking the required financial disclosures.? However, as a private business – and given his offshore location (likely as part of a very efficient corporate tax structure) - Santa’s financials are, to say the least, opaque. However, we can make some assumptions.

A first step is to understand the size of his workforce. Supposing that family members like Mrs Claus are unpaid and take only a profit share, and that reindeers are unsalaried working animals, we can safely conclude that Santa has a wholly elf workforce.?

SantaTracker.net estimates that Santa’s workforce has been steadily increasing with 90,000 elves in 2018, to 110,000 in 2020, and 200,000 by Christmas 2021 (who knows how he found all these elf workers given recent labor shortages, particularly for front-line staff).?

Given recent inflation, and the pressure on wages, we’ll take it that headcount has been flat since then. I also wouldn’t like to speculate how long it took to finalize the post-COVID work from home policy for a workforce that size at a single location.?

Making a list and checking it twice is not just a single month activity, and as a result we’ll also presume that Saint Nick has year-round operations, with a clear peak season around the holidays. To help our calculation Statista.com provides the average working week in the United States by industry.

Santa’s elves perform a variety of activities from manufacturing toys (40 hours per week on average), transportation and warehousing (38.1 hours per week), to retail (30.3 hours per week). Given the size and scope of his operations, some elves are no doubt engaged in management consulting on operational efficiency (professional and business services 36.5 hours per week) or even providing other elves with some options for their well-deserved downtime (leisure and hospitality – 25.5 hours/week).

With the diversity of roles, it is safest to use the average of all private roles: per statista this is 34.4 hours per week.

Next we need some estimate on how much Santa pays. Santa could be operating a performance-based pay, skills-based pay, or other highly variable approach to setting elf compensation. He could have huge overtime bills at a premium rate in December, offset by a lower wage bill during off-peak times. He could also be governed by strict North Pole minimum pay legislation.?

However, given he gives toys to all the girls and all the boys in the world Saint Nick does appear to be a pretty egalitarian kind of chap. That suggests he believes firmly in equal pay for equal work, and likely pays his elves equally (particularly following the bitter legal case by a few years ago by one female elf highlighting the pay disparities in his workforce, that resulted to the recently-enacted North Pole pay transparency legislation).?

Finland, Norway, and Sweden are relatively near geographical neighbors to Santa. Santa’s recent success in hiring suggests he is paying competitively to the local geographic market. The median hourly wage in Finland is 17.7 Euros/hour, Sweden was 191.30 SEK/hour, Norway was 325.5 NOK/hour. Once converted to US dollars, this makes the average across all 3 countries as $18.25 per hour. With an average 34.4 hour per week, we can assume an average elf makes $32,646 per year.

Cross checking, the OECD Better Life Index this appears a reasonable estimate.? The OECD shows the US dollar average net adjusted household income is $33,471 in Finland, $39,144 in Norway, and $33,730 in Sweden, or an average of approximately $35,500 per annum – not far off from our estimates.

Putting this all together, we can project Santa’s wage bill for his army of 200,000 elves at a whopping $6.5 billion per annum ($6,529,120,000 to be precise).

Does this mean Santa is at risk of going bust?? Fear not, in answer to the question “Does Santa pay his elves?” SantaTracker.net responds “Elves?receive room and board in exchange for the hours worked in Santa’s workshop”.

Not such a good deal for the Elves - they should consider unionizing – but perhaps a shrewd approach for Kriss Kringle, particularly given his business revolves around giving away his product for free.?

Happy holiday everyone.? Hope Santa brings you something good this year.

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