Productivity growth is the main driver of rising living standards. For a business, output per hour is a better measure than output per employee because it accounts for part-time work and overtime.
How to use the Productivity Calculator
- Output this period (revenue or units)
- Hours worked this period
- Employees
- Output previous period
- Hours worked previous period
Results update as you type, and every field accepts the units shown in its menu.
How it works
Enter the output and total hours worked (and number of employees) for this period and a previous period.
Tips
- Use consistent periods (a year or a quarter) for flow figures and period-end values for balances.
- Average opening and closing balances when a ratio mixes a flow with a stock.
- Benchmark against competitors in the same industry.
- Read the ratio together with others – profitability, liquidity and efficiency tell different stories.
Common mistakes to avoid
- Using sales instead of cost of goods sold for inventory ratios.
- Mixing gross, operating and net profit.
- Ignoring one-off items that distort a single year.
Inputs explained
| Field | What to enter |
|---|---|
| Output this period (revenue or units) | Amount in your currency |
| Hours worked this period | A number |
| Employees | A number |
| Output previous period | Amount in your currency |
| Hours worked previous period | A number |
What each result means
- Output per hour = [Output this period (revenue or units)]÷[Hours worked this period]
- Output per employee = [Output this period (revenue or units)]÷[Employees]
- Output per hour – previous period = [Output previous period]÷[Hours worked previous period]
- Productivity growth = ([Output per hour]÷[Output per hour – previous period] – 1)×100
Example values
How the main result changes when Output this period changes and everything else stays at the example values above:
| Output this period (revenue or units) | Output per hour |
|---|---|
| 250,000 | 31.25 |
| 375,000 | 46.88 |
| 500,000 | 62.5 |
| 625,000 | 78.13 |
| 750,000 | 93.75 |
| 1,000,000 | 125 |
Formula
Labor productivity = output ÷ labor input (hours or employees)Productivity growth = (new productivity ÷ old productivity − 1) × 100Worked example
Inputs — Output this period (revenue or units): $500,000; Hours worked this period: 8,000; Employees: 5; Output previous period: $450,000; Hours worked previous period: 7,800.
Results — Output per hour = $62.50; Output per employee = $100,000.00; Output per hour – previous period = $57.69; Productivity growth = 8.33 %.
Frequently asked questions
How is productivity calculated?
Output ÷ input, usually per hour worked.
Should I use revenue or units?
Units avoid the effect of price changes; revenue is easier for mixed products.
How can productivity be improved?
Better tools, training, processes and less time on low-value tasks.
What formula does the Productivity Calculator use?
Labor productivity = output ÷ labor input (hours or employees).