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Labor Productivity Calculator

Measure labor productivity as output per labor hour — in units or revenue — plus output per worker, unit labor cost and the change against a previous period to track team or business efficiency.

Output measured as

Total output in the period

Number of workers

Hours worked per worker in the period

Previous productivity per hour (optional)

Labor cost per hour

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How it works

labor productivity = output ÷ labor hours · labor hours = workers × hours per worker · output per worker = output ÷ workers · unit labor cost = labor cost per hour ÷ output per hour · change = (now ÷ before − 1) × 100

Labor productivity is the amount of output produced for each hour of work. National statistics offices such as the US Bureau of Labor Statistics and the OECD measure it as real output (or GDP) per hour worked; inside a business you can use units produced, orders handled or revenue. Tracking it over time — and alongside unit labor cost — shows whether process changes, tools or training are really getting more done per hour, rather than just more hours.

Worked example

A plant with 25 workers each working 160 hours in a month (4,000 labor hours) produces 12,000 units: 3.00 units per labor hour, or 480.0 units per worker. At $22 an hour, labor costs $7.33 per unit, and productivity is up 7.14% from 2.80 units per hour last period.

Sources: US BLS — Productivity

Frequently asked questions

How do you calculate labor productivity?

Divide total output by total labor hours. 12,000 units made in 4,000 hours is 3 units per hour. For a service business, use revenue or value added instead of units.

Is output per worker the same as productivity?

It is a related measure, but output per hour is better because it is not distorted by part-time work or overtime. Use per worker when hours are not tracked.

What is unit labor cost?

The labor cost needed to produce one unit of output: hourly labor cost ÷ output per hour. If wages rise faster than productivity, unit labor cost goes up.

How do I improve labor productivity?

Remove bottlenecks and rework, improve tools and training, and match staffing to demand. Measure the same way each period so changes are real.

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Overall equipment effectiveness from shift time, downtime, ideal cycle time, pieces produced and rejects — availability, performance and quality factors, the six big losses, and the hidden capacity you could recover.

Revenue per Employee Calculator

Divide annual revenue by headcount to get revenue per employee — a quick read on workforce productivity.

Labor Cost Percentage Calculator

Divide total labor cost by sales to get your labor cost percentage — the benchmark that tells you if staffing is in line with revenue.

Man Hours Calculator

Calculate man-hours (person-hours) from crew size, hours per day and days, how many days a job of known man-hours will take, or how many workers you need to finish by a deadline, with labor cost.

FTE Calculator

Convert the total hours your staff work into full-time equivalents (FTE): FTE for a week, fortnight, month or year, average FTE and hours per person, and a quick weekly-hours-to-FTE table.

This calculator is for educational purposes. Double-check important results before acting on them.