How to calculate work hours?
How to calculate labor hours? The process of measuring the consumption of man-hours or fractions of man-hours required to perform a task requires defining the conditions under which we perform the measurement.
The above ensures that duplication can support the action.
They are defined as standard requests.
Note that the time required to complete a task includes both actual work time and normal noncontributory time.
Typically, each company has accurate historical records of the man-hours required to perform each task under standard conditions.
Calculation of man-hour costs for construction projects – standard conditions
Standard Conditions. The total labor hours calculated for each project from the historical records in the tables are valid only if the project is performed under certain conditions (which we call standard conditions).
Because every project is different, we need to adjust the total number of hours for mathematical calculations. We use factors that take into account the influence of the specific conditions of each project.
Summarizing:
First, the estimating team needs to have a reliable record of the number of man-hours that will be required to complete each task.
Next, we mathematically calculate the number of labor hours based on the number and type of tasks to be performed on the project. This calculation is carried out by applying to each of the tasks the effort that is recorded in the tables.
Estimators, or those they consult, also need to be fully informed about the conditions under which each project is going to be carried out.
The applicant needs the above estimate for mathematical calculations.
Project Cost Control Features
Project Cost Control Features. We’ll provide you with essential information about the features of the Project. These features include
- The tender documents.
- The information gathered during the site visit.
- Consultation with the purchaser.
Then, in the next step, we need to define the correction factors that we will apply to the total number of working hours mathematically calculated for each job.
We then estimate the direct labor hours required for each specialty and use the labor hour data to determine the number of workers needed.
In summary, the estimator relies on drawings, material calculations, performance record tables, and most importantly, his or her experience and input from specialists.
Typically, each contractor has already determined the cost of labor hours for the normal time of each worker category.
This cost varies by specialty and includes work clothing, safety equipment and a toolbox, if applicable.
Calculate hours and overtime
Calculate hours and overtime. Overtime results in a significant increase in direct labor costs. We must take this into account in the estimate.
Working overtime can be gratifying for the employee, but it is important to note that being paid by the hour with a 50% premium does not necessarily increase the employee’s output by 50%. In fact, the excessive length of the work day can actually reduce the average output of the employee.
For hours paid at 100%, the difference above is even more pronounced.
In spite of the above, it is common for companies in the construction industry to work more than 8 hours a day, Monday through Saturday. In addition, they may have work requirements for some or all of their employees on Sundays and holidays.
Overtime reasons – Man-hours Calculation
Reasons for working overtime: Calculate time worked. There are two main reasons why the employer plans to work overtime:
First, the employer must offer the worker an attractive salary. Second, the worker’s job continuity is only guaranteed in the project he or she joins. In addition, the location of the project is often far away from the home of the worker.
Second, the employer must increase the number of hours calculated for the performance of duties because of the reduction in the effective working hours that occur on a daily basis due to operational issues such as:
- Elimination of the time loss due to the daily mobilization and demobilization of the worker and his tools from the workshop to the construction site.
- The construction site is often a long way away from the workshop, or it may be located above the ground, etc.
- To compensate for the downtime that occurs while approving work permits, etc.
Other situations that may result in additional hours beyond the calculated task completion time are
- On jobs where there are significant penalties for missing construction deadlines, it is often necessary to work overtime to ensure timely completion and avoid penalties.
- Restoration or expansion of existing work facilities with urgent delivery schedules (generally in architecture and construction) require piecework until completion. The hourly cost of overtime is higher than the calculated rate.
- Jobs that require specialized personnel that are difficult to find in the labor market are often a challenge. When there are fewer workers available for a job than originally planned, it becomes necessary to work more overtime than anticipated in order to meet construction deadlines.
An image of workers receiving their wages
Photo of workers receiving their wages. The image below depicts a group of workers patiently waiting to receive their paychecks.
It is important to note that each country has its own labor laws. These laws include the following:
- What is the standard number of hours per week that the employer is required to pay under local labor law?
- What is the daily, monthly, and yearly maximum overtime allowed?
- When do you pay 50% overtime and when do you pay 100% overtime?
It should be noted that, regardless of labor laws, it is usually union collective bargaining agreements that ultimately determine the number of hours per week and how overtime is paid.
The conditions established in these agreements must be more favorable to workers than those provided by national law.
Man-hours Calculation for Construction Projects: Plan & Optimize Your Time
How to calculate hours worked and overtime paid
Overtime cost calculator: See how overtime affects your man-hour costs. Weekly hours calculator.
Calculate Hours Worked – Hypothetical Calculation of the Effect of Overtime
Hours Paid Weekly—Weekly Hours Calculator
Hours Paid Weekly—Weekly Hours Calculator. Assumptions for the weekly hour’s calculator:
- Calculate the weekly hours worked. We will assume that the maximum number of regular hours worked per week in the region known as X is 40.
- Weekly Hours Calculator: Overtime is paid at the rate of 50% for each hour worked over regular hours Monday through Friday and until 1:00 pm on Saturday.
- Weekly Hours Calculator: Saturdays after 13:00, Sundays and holidays are 100% time.
The ratio of the cost of hours paid to hours worked per week multiplied by 100 is the percentage increase in the incidence of overtime at hourly cost.
So if the workday starts at 8 a.m. and we work 10 hours Monday through Saturday, we have
Weekly Hours Calculator:
- 1) We work 10 hours a day for a total of 50 hours from Monday through Friday.
- 2) This is 10 hours more than the normal 40 hours. Therefore, we paid 50% for the extra 10 hours, which is equivalent to 15 hours in normal time (assuming the normal maximum number of hours worked per week is 40).
- 3) On Saturday, our working time was 10 hours. We have paid for 5 hours of work until 13:00 at 50% overtime. We must pay the remaining 5 hours at 100% overtime, which, converted to regular hours, totals 17.5 hours.
- Total time remunerated: (sum of points 1 to 3), equal to 40 + 15 + 17.5 = 72.5 hours.
Weekly Hours Calculator
Number of hours worked per week: Monday through Saturday = 10 hours * 6 days = 60 hours of work.
Total paid time: 72.5 hours.
The percentage increase in the cost of man-hours for the employee is as follows:
[72.5/60] * 100 = 120.83%
The additional cost for overtime is 20.83 percent.
This is a substantial addition. It should be reported to the company’s accountant. The accountant will determine the direct labor cost for this project.
Read the following article about how to reliably assess the equipment chosen for project cost management.
Check the next post How to calculate direct hours worked.
Man-hours Calculation and overtime paid