Sales Per Labor Hour (SPLH)
SPLH helps retailers evaluate how efficiently labor is being used and is one of the most widely used metrics for workforce planning, labor optimization, and store performance.
What is Sales per Labor Hour?
Sales per labor hour measures the relationship between sales revenue and employee labor hours. Rather than focusing on the number of employees, SPLH evaluates how much revenue is generated for each hour of labor.
Retailers commonly track SPLH by store, department, region, or time period to compare productivity and identify opportunities to improve staffing and scheduling.
Why is Sales per Labor Hour important?
Labor is one of the largest operating expenses in retail. SPLH helps retailers determine whether staffing levels are aligned with customer demand and business performance.
Monitoring SPLH helps retailers:
Measure labor productivity.
Optimize workforce scheduling.
Improve labor efficiency.
Control labor costs.
Support labor forecasting and budgeting.
When analyzed alongside customer traffic and conversion rate, SPLH provides valuable insight into whether stores are using labor effectively.
How is Sales per Labor Hour calculated?
Sales per labor hour is calculated using the following formula:
Sales Per Labor Hour = Total Sales Revenue ÷ Total Labor Hours Worked
For example, if a store generates $24,000 in sales during a day and employees work a combined 300 labor hours, the SPLH is $80.
Most workforce management platforms calculate SPLH automatically by combining sales data from the point of sale (POS) system with employee time and attendance records.
Sales per Labor Hour vs. sales per employee
Although both measure workforce productivity, they focus on different units of measurement.
Sales per labor hour measures the revenue generated for every hour worked.
Sales per employee measures the average revenue generated by each employee over a specific period.
Because employees often work different numbers of hours, SPLH generally provides a more accurate view of labor efficiency and is the preferred metric for workforce planning and scheduling.
Best practices for improving Sales per Labor Hour
Retailers can improve SPLH by:
Aligning staffing with forecasted customer demand.
Using demand-based or AI-powered scheduling.
Reducing overstaffing during slower periods.
Providing employees with sales and customer service training.
Monitoring customer traffic, conversion rate, and average transaction value (ATV) alongside SPLH.
Using workforce management software to continuously optimize labor allocation.
When integrated with workforce management and retail analytics software, Sales per Labor Hour helps retailers improve labor productivity, optimize staffing decisions, control labor costs, and maximize profitability while maintaining a high-quality customer experience.
