The 'Cost per Hour of Output' metric is designed to provide insight into the cost to complete an hour of Production Tasks.
There are 2 key inputs that impact the 'Cost per Hour of Output':
The fully-loaded rates you are paying the staff members completing the work
The Yield of Staff Members over the time-period you are running the report for.
For example, the table below illustrates the varying hourly rates and Yield performance across 3 teams:
Group | Team A | Team B | Team C |
Hourly rate | $45 | $16 | $45 |
Yield | 60% | 40% | 50% |
Cost per Hour of Output | $75 | $40 | $90 |
The 'Cost per Hour of Output' is a valuable tool to assess the relative cost of production across your organization. It should be used as a means to ensure that you have good workload balance across your staff. That is, if you have highly-skilled, highly-paid staff members completing simplistic tasks, this metric will help you uncover that.