Sales per labour hour

If you run a retail store, restaurant, or any business where staff directly influence sales, you’ve probably wondered: "Are my employees selling efficiently, or am I just burning payroll dollars?"

This question matters even more in those businesses that heavily rely on outbound sales calls. Especially when there are SDRs and their associated AEs and BDRs involved in the process.

That’s where sales per labour hour (SPLH) comes in.

This metric tells you exactly how much revenue each working hour generates, helping you optimize staffing, boost productivity, and maximize profits. But here’s the problem—most business owners either don’t track it or don’t know what a good sales per labor hour looks like for their industry.

In this detailed breakdown, we’ll take a close look at the following different aspects of SPLH:

• What does SPLH stand for? (And why it matters)
• How to calculate it (the right way)
• Industry benchmarks—what is a good sales per labor hour?
• How to improve it without overworking your team
• Common mistakes that tank your measuring sales productivity efforts

Let’s get started.

What Does SPLH Stand For? (And Why Should You Care?)

SPLH = Sales Per Labour Hour

It’s a simple but powerful metric that shows how much revenue your business generates for every hour employees work.

Why It’s a Big Deal?

To cut to the point, SPLH matters because of the following dynamics involved:

• Hiring decisions: Helps you decide if you’re overstaffed or understaffed.
• Staff scheduling: Identifies peak productivity hours so you can schedule smarter.
• Performance tracking: Reveals which employees (or locations) drive the most sales.
• Profitability check: If payroll costs rise but SPLH drops, you’ve got a problem.

Think of it like this: If one employee generates 

200/hour while another only brings in

200/hour while another only brings in 50/hour, you’d want to figure out why—fast.

How to Calculate Sales Per Labour Hour (The Right Way)

The formula is simple:

SPLH = Total Sales ÷ Total Labour Hours

But there’s a catch—you need to measure it correctly.

Step 1: Define "Total Sales"

• Gross sales (before discounts/returns)
• Net sales (after refunds)
• Some businesses track only certain departments (e.g., retail sales vs. service sales)

Which one should you use?

• For staffing decisions → Gross sales (gives a full picture of productivity)
• For profitability → Net sales (shows actual revenue after losses)

Step 2: Track Labour Hours Accurately

• Include all paid hours (even breaks and training)
• Exclude overtime (unless you’re analyzing cost efficiency)
• Split by department if needed (e.g., sales staff vs. stockroom staff)

Example Calculation:

• Total Sales (Week): $50,000
• Total Labour Hours (Week): 500 hours
• SPLH = 
• 50,000÷500=
• 50,000÷500=100/hour

Now, the big question…

What If Your SPLH Is Below Average?

• Understaffing? Employees might be overwhelmed, leading to lost sales.
• Overstaffing? Too many idle hours drag down efficiency.
• Training gaps? Staff might not be converting customers effectively.

How to Improve Sales Per Labour Hour (Without Burning Out Your Team)

A low SPLH doesn’t always mean "fire people." Here’s how to boost it the right way.

1. Optimize Staff Scheduling

• Use historical sales data to predict busy vs. slow periods.
• Avoid overstaffing during dead hours (e.g., weekday mornings in retail).
• Cross-train employees so they can handle multiple roles during peak times.

2. Train Employees to Sell Smarter (Not Harder)

• Teach upselling & cross-selling techniques.
• Role-play common customer objections.
• Reward top performers (bonuses, incentives, recognition).

3. Reduce "Non-Selling" Time

• Automate repetitive tasks (inventory checks, cashier duties).
• Streamline opening/closing procedures.
• Use tech (mobile POS, self-checkout) to speed up transactions.

4. Track Individual Performance

• Compare SPLH by employee (who’s driving sales vs. just clocking in?).
• Identify top performers—what are they doing differently?
• Coach low performers instead of just cutting hours.

Common Mistakes That Ruin Your SPLH Tracking

Even smart businesses mess this up. Here’s what to avoid:

Mistake #1: Only Tracking Store-Wide Averages

• Why it’s bad: Hides underperforming departments/employees.
• Fix: Break down SPLH by team, shift, or individual.

Mistake #2: Ignoring External Factors

• Example: A mall store’s SPLH drops—but was it bad staffing or a mall-wide traffic slump?
• Fix: Compare foot traffic, promotions, and seasonality.

Mistake #3: Chasing High SPLH at All Costs

• The risk: Overworked staff = bad service = long-term sales drop.
• Fix: Balance efficiency with customer experience.

Is SPLH the Ultimate Metric?

Sales per labour hour is one of the best ways for measuring sales productivity, but it’s not the only one. It’s more of a means to an end that plays a pivotal role in the workflow for any business out there:

• Conversion rate (% of visitors who buy)
• Average transaction value (how much each sale is worth)
• Customer satisfaction scores (happy customers return)

Key Takeaways:

• What does SPLH stand for? Sales Per Labour Hour—revenue generated per hour worked.
• What is a good sales per labor hour? Depends on your industry (see benchmarks above).
• How to improve it? Better scheduling, smarter training, and reducing wasted time.

Now, it’s your turn. Calculate your SPLH and try to figure out how it stacks up in your current business situation. And more importantly, what’s your plan to make it better?