Sales per labor hour, explained
What SPLH measures, how to calculate it, how it differs from labor cost percentage, and how to avoid gaming it.
Sales per labor hour, often shortened to SPLH, is one of the simplest numbers in retail operations. It tells you how much you sold for each hour of labor you paid for. It is also easy to misread. Used well, it tells you where your labor is working hard. Used badly, it pushes you to cut the hours that were making you money.
The formula
Divide sales by labor hours for the same period and the same place.
SPLH = sales ÷ labor hours
Take a made-up store. In one week it sells $42,000 and uses 210 labor hours.
$42,000 ÷ 210 = $200 per labor hour
You can run the same sum for a day, a daypart or a single hour. The finer the cut, the more useful the number, because a weekly average can hide a bad Tuesday and a great Saturday.
What to count, and how to stay consistent
Before you compare anything, decide:
- Which sales. Net of returns and discounts is usually the honest choice. Use the same definition everywhere.
- Which hours. Decide whether to count paid breaks, managers, stock work and training. Many operators count all paid hours in the store for a store-level number, and selling hours only when comparing people.
- Which period. Compare a week with the same week last year where you can. Seasons move this number a lot.
There is no universal target. A good figure depends on your ticket size, margin, location and pay. Be careful with benchmarks you find online, including any that seem to match your category. The most useful comparison is usually your own store against itself, and your own stores against each other.
SPLH and labor cost percentage
These two numbers answer different questions.
| Measure | Formula | The question it answers |
|---|---|---|
| Sales per labor hour | Sales ÷ labor hours | How productive is each hour? |
| Labor cost percentage | Labor cost ÷ sales | What share of sales goes to labor? |
Labor cost percentage moves when pay rates move. Raise wages and the percentage climbs even if nothing changed on the floor. SPLH ignores pay, so it shows productivity on its own. You want both: SPLH to judge how well hours are used, and labor cost percentage to judge what you can afford.
Here is how they can disagree. Say a store with a $200 SPLH pays an average of $20 an hour. Labor is 10% of sales. A second store has a $250 SPLH and pays $30 an hour. Labor is 12% of sales. The second store is more productive per hour and more expensive as a share of sales. Which is better depends on margin and on the local labor market.
SPLH by hour shows you where to move people
Store-wide numbers tell you whether you have a problem. Hourly numbers tell you where.
Plot sales per labor hour across a day for a few weeks. Look for two patterns:
- Very high numbers often mean you are short. Sales are coming in, but customers may be walking out because nobody is free. The real number could be higher with another person on.
- Very low numbers mean you may have more people on than the hour needs.
That is the core move: take an hour from where it does little and give it to where it can do a lot. Total hours can stay the same, and only their placement changes.
The trap: more SPLH is not always better
You can always raise SPLH by cutting hours. For a while, sales hold up and the number looks great. Then the waits get longer, customers leave, stock goes unfilled and good people quit. Treating SPLH as a score to maximize tends to end there.
Read it alongside something that shows the cost of running thin:
- Conversion rate, if you count visitors. Falling conversion on a high-SPLH hour suggests you are understaffed.
- Average ticket. Rushed sales are often smaller sales.
- Staff turnover. A thin floor wears people out.
From store SPLH to individual sales per hour
SPLH looks at a whole store. Sales per hour worked looks at one person: their sales divided by their hours on the floor. The sums are the same, but the use differs. One helps you decide how many hours belong in a block. The other helps you decide who should work them.
The person-level number needs some care:
- Credit. If two people work a sale, decide who gets it, and be consistent.
- Opportunity. People on quiet shifts have fewer chances to sell.
- Sample size. Wait until someone has enough hours for the number to mean something.
Our guide to scheduling by sales per hour walks through using it week by week.
A simple monthly routine
- Pull sales and labor hours by hour for each store.
- Mark the five highest and five lowest SPLH blocks of the week.
- For each high block, ask whether customers were being missed.
- For each low block, ask whether a required task justified the hours.
- Move a small number of hours, then watch the same blocks for the next four weeks.
Change only a little at a time. If you move everything at once, you will not know what worked.
What to take from this
SPLH is a lens, not a verdict. Use it to find the hours to look at, then use your judgment on what is happening in them. The goal is not the highest possible number. It is the right people, in enough numbers, on the hours that decide your week.