What is Labour Recovery and why is it important?

What is Labour Recovery?

To boil it down, if you pay someone one hour, you want to recover as much of that as possible. So, it is how much you pay a member of staff versus how much you are able to charge or recover for that time period.

For example, in a given 40-hour week, if you were to recover 30 hours, that would mean you have a labour recovery rate of around 75%. It's important to measure labour recovery so we can ensure that your staff and the workplace as a whole is performing well.

Why is Labour Recovery so important?

The reason that labour recovery is so important in a service based business is because labour is the main thing you sell, so it is typically our highest cost and it is also what earns us the most money. Quite often business owners don't actually know how much labour they are recovering, so once you know where you are, then you are able to manage it and you can make sure that you improve and get a better labour recovery, which will lead to better profitability.