Enter the sales revenue ($) and the labor hours (hrs) into the Calculator. The calculator will evaluate the Sales Per Labor Hour.
Sales Per Labor Hour Formula
SPLH = SR/LH
Variables:
- SPLF is the Sales Per Labor Hour ($/hr)
- SR is the sales revenue ($)
- LH is the labor hours (hrs)
To calculate Sales Per Labor Hour, divide the sales revenue by the total labor hours.
How to Calculate Sales Per Labor Hour?
The following steps outline how to calculate the Sales Per Labor Hour.
- First, determine the sales revenue ($).
- Next, determine the labor hours (hrs).
- Next, gather the formula from above = SPLH = SR/LH.
- Finally, calculate the Sales Per Labor Hour.
- After inserting the variables and calculating the result, check your answer with the calculator above.
Example Problem :
Use the following variables as an example problem to test your knowledge.
sales revenue ($) = 40000
labor hours (hrs) = 300
Frequently Asked Questions (FAQ)
What is the significance of calculating Sales Per Labor Hour?
Calculating Sales Per Labor Hour (SPLH) helps businesses understand the efficiency of their workforce in generating revenue. It’s a key performance indicator that can aid in workforce planning, budgeting, and identifying areas for operational improvement.
Can Sales Per Labor Hour vary by industry?
Yes, SPLH can significantly vary across different industries due to the nature of the work and the revenue models. Industries with higher labor costs or those that are labor-intensive might have different benchmarks for what constitutes a good SPLH.
How can a business improve its Sales Per Labor Hour?
Improving SPLH can involve strategies such as optimizing staffing levels, training employees to enhance productivity, investing in technology to streamline operations, and refining sales strategies to increase revenue.
Is it better to have a higher or lower Sales Per Labor Hour?
A higher SPLH is generally preferable as it indicates that more sales revenue is being generated per labor hour, suggesting higher efficiency and potentially better profitability. However, it’s important to balance this with the quality of customer service and employee well-being.
