Metrics & KPIsLabor Multiplier
Definition
Labor Revenue divided by Direct Labor Cost Used to monitor rate schedule efficacy, WIP write-offs, and A/R write-offs as they affect profitability on the income statement.
Use Case / Interpretation
A Labor Multiplier of at least 2.5, but optimally 3.0 is necessary for sustainability.
Tags
profit, WIP, work in progress, income, revenue, cost, schedule