Labor efficiency calculator
Compare the standard hours you earned by producing units with the actual labor hours spent.
Track efficiency every shift
Need to track efficiency over time? The OEE Tracker template for Excel and Google Sheets logs every shift and builds a dashboard of the losses.
How it is calculated
Standard hours earned = units produced × standard hours per unit. Labor efficiency = standard hours earned ÷ actual hours × 100 %.
Worked example
500 units at 0.2 standard hours each = 100 standard hours. With 125 actual hours: efficiency = 80 %.
Steps
- Enter the units produced in the shift or week.
- Enter the standard hours per unit from the routing.
- Enter the actual hours booked for the same work, then read the efficiency.
Frequently asked questions
What is a good labor efficiency?
Close to 100 % means the team is on standard. Values above 100 % mean faster than standard.
Should indirect labor count?
No. Count direct labor hours only, unless your standard includes indirect time.
Is this the same as OEE performance?
No. Labor efficiency compares people hours to the standard. OEE performance compares machine speed to the ideal cycle.
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References
Standard hours and efficiency measures as in standard cost accounting (Horngren, Cost Accounting) and industrial engineering labor standards.
Estimates for information only. Verify critical values with a qualified engineer or your supplier standards.