Labor management systems come in two kinds that share a name. The warehouse LMS measures associates against engineered standards and is sold by enterprise vendors to distribution operations; this site is not for that buyer. The labor management system software a small employer needs does three smaller things: it holds a loaded hourly rate per person, reads loaded labor as a share of revenue against the employer's own target, and prices a crew's hours on a job at the loaded rate with a markup, then keeps the job's tracked labor against its price. The free calculators on this site do the arithmetic from your own payroll and publish no rate.
Two products, one name
An LMS labor management system in a warehouse tracks picks per hour against a standard and ranks people. The labor management system LMS a contractor, cleaner or restaurant owner searches for is the record of what an hour costs loaded, what labor is as a share of sales this week, and what the crew's hours on a job cost against what the job was priced at. Buying the first when you needed the second is the commonest mistake the name causes.
The loaded rate is the foundation
Every figure in a small employer's labor management system starts from the loaded hourly rate: the wage plus the employer share of payroll taxes, benefits and insurance per hour actually worked, and whatever else rides on the hour. The labor burden calculator on this site works it from your own payroll figures; the software keeps a dated rate per person so a job priced in March is compared at March's rate.
Labor against revenue, labor against the job
Labor management system software for a small business reads two comparisons. The period one: loaded labor as a share of revenue against the target you set, the restaurant owner's Monday figure. The job one: crew hours at the loaded rate against the labor price on the bid. On the construction labor calculator's worked example, four people at 40 hours each are 160 crew hours, $5,040 of labor cost at a $31.50 loaded rate, and a $6,048 labor price once the employer's own markup is added.
What it should cost and what it should not do
Warehouse systems are enterprise-priced and per associate; time clocks, scheduling and payroll filing are separate products this system does not replace. BurdenRateLedger Pro is $49 per month for the whole crew, with no per-seat and no per-job fee, and every calculator on this site computes free with no account.
Questions people ask about labor management systems
Are labor management systems only for warehouses?
No. The name is shared, but the small employer's version is a loaded rate per person, labor as a share of revenue and a job's labor against its price. The warehouse LMS is a different product for a different buyer.
What should labor management system software do for a contractor?
Hold a loaded rate per employee, price a crew's hours on a job with your markup, and compare the tracked labor with the price. The construction labor calculator on this site does the pricing free.
Does an LMS labor management system replace my time clock or payroll?
No. It reads the hours the clock records and the wages payroll pays, and turns them into loaded cost against revenue and against the job.