How to Calculate Man Hours Cost for a Construction Project.
A comprehensive guide for calculate man hours cost of a construction project, including overtime work calculation examples..
Tables to calculate times of labor on the construction project.
Table of contents
- Calculate Man Hours Cost of the Construction Project – Output Charts for Calculate Man Hours Cost
- How Calculate Man Hours Cost of the Construction Project – Overtime work
In order to provide a reliable calculation of the direct labor required to complete a job, it is necessary that:
- First, the person responsible for the estimation and the group involved in the labor team is diligent.
- Second, the group of estimators must have experienced personnel capable of defining the logical sequence of execution of each stage of construction.
- In addition, we recommended that, if necessary, they get advice on a project to quote.
- Finally, it is essential to have accurate information on the job performance to execute each task of the project.
Calculate Man Hours Cost of the Construction Project – Output Charts for Calculate Man Hours Cost
The process of measuring the consumption of man hours or fraction of labor hour that is necessary to perform a task; requires defining the conditions within which we accomplish the measuring.
The above ensures that duplication can support the measure.
They are defined as standard requirements.
We note that times of labor required to complete a task include both actual and normal non-contributory time.
How Calculate Man Hours Cost of a Construction Project – Standard conditions
How Calculate Man Hours Cost of the Construction Project – Standard conditions. The total number of hours worked using the records in the tables is valid only if we are running the project under conditions similar to those that existed at the time, we have taken the performance measures.
Because each project is different from the others, we must adjust the total number of hours of the mathematical calculation with factors that take into account the influence of the special conditions prevailing in each project.
First, the estimating team must have reliable records of the number of man hours required to complete each task.
Next, knowing the number and type of tasks to be performed on the project, we mathematically calculate the number of man-hours.
This is calculated by applying the performance recorded in the tables to each task.
Furthermore, estimators or their advisers must have complete information on the conditions under which we will carry out each project.
The proponent needs the above estimate to fit the mathematical calculation.
Features of each project to quote
We obtain basic information on the features of each project to quote for:
- The tender documents.
- The information gathered during the site visit.
- The consultations to the purchaser.
Then, in the next step, we must define the correction factors that we will apply to the total number of hours of job calculated mathematically.
We then assess the direct hours of work required for each specialty and with the data for the hours of work, we obtain the number of workers required.
In short, for this task, the estimator relies on the drawings, the calculation of materials, the tables with performance records, and especially on his experience and the contribution of the specialists. .
In general, each contractor has already established the hourly labor cost of the workers.
This cost varies depending on their specialty and includes labor clothing, safety features and a toolbox, where applicable.
How Calculate Man Hours Cost of the Construction Project – Overtime work
The extra work produces a significant increase in the cost of workers’ working times. We have to calculate that in the estimation.
Overtime work is gratifying for the worker, but we should note that the payment by the hour with a 50% surcharge does not increase the worker’s output by 50%.
On the contrary, the excessive length of the working day diminishes the average performance of the worker.
We find that the difference between hourly costs and performance is even more noticeable when the time is paid 100%.
Despite the above, in the construction industry, firms typically work more than 8 hours a day from Monday to Saturday.
In addition, they may work with all or part of their employees on Sundays and holidays.
Reasons for working overtime
We should note it that the employer plans to carry out the job with extended working time, mainly for two reasons:
First, to offer attractive salary compensation to the worker, considering that he has only assured his work continuity of that work and that in addition, the place of job is frequently far from his home.
Second, to balance the decrease in actual working hours every day due to operational issues such as.
- To counteract the time lost due to the daily mobilization and demobilization of the worker with his tools from workshop to site.
- The site is often away from the workshop or possibly above the ground, etc.
- To compensate for down time, work permits are approved, etc.
Other situations which lead to an extended working day are:
- Works with very short turnaround times and high penalties for noncompliance.
- Restoration or extension of existing job facilities with urgent turnaround times (generally in architectural and civil works)
- Work done with specialized staff that is not plentiful in the labor market, etc.
Picture of workers receiving their wages
The following image shows a group of workers waiting to collect their paycheck.
We should note that each country has its labor legislation which, among other things, defines the following issues:
- What is the number of man hours per week that the employer normally has to pay under the local labor law?
- What is the maximum number of authorized overtime hours per day, month and year?
- When do people pay 50% and 100% overtime work?
It should be noted that, regardless of labor legislation regulates what, it is usually the approved collective labor agreements of the trade unions that ultimately define how many man hours are worked per week and how overtime work is paid.
The conditions laid down in these agreements must meet the condition that they are more favorable to the worker than national legislation provides.
Man Hours Calculation
How to Calculate overtime infographic
How overtime affects the cost to calculate man hours.
Calculate man hours cost – Hypothetical Calculation of the effect of overtime
Hours Paid Weekly – Man Hours Calculation
- We assume that in the area known as X, the maximum number of standard hours per week is 40.
- Overtime, at 50%, is paid for each hour that exceeds the normal hours of Monday to Friday and Saturday until 1 p.m.
- Hours worked on Saturdays after 13:00, Sundays and public holidays pay 100%.
The percentage by which the incidence of overtime work increases the cost of the hour arises from the ratio of the cost of hours paid over the hours worked per week, multiplied by 100.
Therefore, if the workday starts at 8am. and we work 10 hours Monday through Saturday, we have:
Man hours calculation:
-1) From Monday to Friday, we work 10 hours per day for a total of 50 hours.
-2) This is 10 hours more than the normal 40 hours, so we paid at 50% that are 15 hours converted to normal, (we assumed that the normal maximum number of hours per week is 40).
-3) In Saturday work 10 hours, of which 5 we paid until 1 pm with a 50% surcharge and we must pay the remaining 5 hours with a 100% surcharge that is, 17.5 hours converted to normal.
-Total time paid: (sum of points 1 to 3), equals 40 + 15 + 17.5 = 72.5 hours.
Weekly Working Time
-Monday to Saturday = 10 hours * 6 days equals 60 hours worked.
The percentage increase in the cost of the workers’ hour is:
[72.5/60] * 100 = 20.83%
This represents an additional cost of 20.83 percent.
This is an important supplement to calculate and should be reported to the company’s accounting officer, who will ultimately set the cost of the hours of work for this project.
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How to Calculate Man Hours Cost for the Construction Project – Calculate Man Hours