Labor efficiency

Labor efficiency measures how effectively a company's workforce is producing goods or services relative to the time and effort invested. It compares the actual output achieved with the potential or standard output expected from the labor hours used. High labor efficiency indicates employees are working productively and getting more done in less time, while low efficiency suggests room for improvement in processes or training. Improving labor efficiency helps businesses reduce costs, increase profitability, and stay competitive by making better use of their human resources.