Labour Management Calculator Explained:
(a) What is this? This calculator shows you the two most frequently used measures of wages in a retail business.
(b) What does this tell me? There are two key wage measures in this calculator: Gross Margin Return On Labour (GMROL) which shows you the wages cost as a percentage of GP$, and Wages % shows you the wages as a percentage of Sales.
(c) Why should I use it? To help you manage and contain your costs. By showing both the key measures (GMROL and Wages %) you can track your wages costs more carefully. If the percentages are low it can often mean a stressed staff, missed sales or that you have improved efficiencies. Higher percentages might mean reduced profit by employing too many staff.
(d) Caution: You should be aware that sometimes a higher wages % can be good, or bad depending on the situation and lower wages % can be a good or bad thing depending on the situation. Any changes to the wages % is a business decision, this calculator simply provides you with the data.