Labor Productivity Calculator

How labor productivity is measured

Labor productivity is one of the most important operational metrics in a warehouse or distribution center because it links staffing decisions to throughput and cost. The most common measure is units per hour, which is the total number of units picked or processed divided by labor hours. This measure is easy to interpret and can be tracked daily or weekly to identify changes in performance.

Productivity metrics are most useful when paired with cost. By multiplying labor hours by the hourly wage or fully loaded labor cost, you can calculate total labor spend. Dividing that spend by units processed yields cost per unit. This provides a direct link between labor efficiency and financial performance, which is helpful when comparing shifts, facilities, or process changes.

Real operations also include errors and rework. Mis-picks, damages, and quality issues create additional labor that does not generate usable output. The error or rework percentage in this calculator reduces effective units to reflect that loss. Effective units per hour show the actual productive output after accounting for rework. A small change in the error rate can significantly change effective productivity, which is why quality initiatives often produce large cost savings.

Use this calculator to evaluate staffing changes, process improvements, or incentive programs. For example, if a new picking method increases units per hour but also increases errors, effective output may not improve as much as expected. The calculator makes these trade-offs visible so you can make informed decisions about labor planning.

Remember that productivity is influenced by layout, technology, training, and product mix. A fair comparison should control for those factors or apply the same measurement method across all periods. This tool gives you a consistent calculation framework that is fast and transparent, and it keeps all inputs local to your browser for privacy.

Formula

Units per hour: Units ÷ Labor Hours

Labor cost per unit: (Labor Hours × Cost per Hour) ÷ Units

Effective units: Units × (1 − Rework %)

Effective units per hour: Effective Units ÷ Labor Hours

Example calculation

If 8,500 units are picked in 70 labor hours at $22 per hour, units per hour are 8,500 ÷ 70 = 121.4. Total labor cost is 70 × 22 = $1,540 and cost per unit is 1,540 ÷ 8,500 = $0.18. With a 2% rework rate, effective units are 8,500 × 0.98 = 8,330, so effective units per hour are 8,330 ÷ 70 = 119.0.

FAQs

What is a good units-per-hour benchmark?

Benchmarks vary by product mix and facility design. Compare against your own historical performance.

Should I use fully loaded labor cost?

Yes, if available. Fully loaded cost provides a more realistic cost per unit.

How do I handle overtime?

Use the blended hourly cost and total hours for the period you want to measure.

Does this account for indirect labor?

No. It focuses on direct labor hours tied to the units measured.

Is this calculator private?

Yes. All calculations run locally in your browser.

How it works

This calculator divides output by labor hours, then adjusts for rework to show effective productivity. All computation is client-side for privacy.

Disclaimer

Productivity metrics depend on measurement scope and data quality. Validate results with consistent timekeeping and operational definitions.