The Secret to Estimating Labor More Effectively
“Neither snow nor rain nor heat nor gloom of night stays these couriers from the swift completion of their appointed rounds,” or so goes the saying engraved on the front of the James Farley Post Office building in New York. But just because heat or rain doesn't stop the mail from being delivered, it just might take the postal carrier longer to complete his route. The same premise often holds true for electrical estimators, who frequently find themselves in a strangely similar situation.
Many factors, including weather, environmental conditions, and abnormal working hours — just to name a few — can affect labor units (What is a Labor Unit on page C14) on an electrical project. The good news is you can manage these variables, as long as you factor them into your estimate and ultimate layout of the job. Failure to do so, however, may not only result in an overage of hours on your project, but also cause burnout of you or your crew — not to mention the little to no profits that may be in store for you. Typically, you can anticipate the effects of various factors related to work conditions on a new project in advance (Photo 1). Let's examine some of the variables that can affect your labor efficiency and therefore job profits.
Building size and shape
The larger the building size and/or the more spread out a project is, the less efficient your labor force will be. In fact, on very large construction projects, labor productivity decreases as the job size and complexity increases.
Building height — Labor units for buildings over four stories should be adjusted by a factor of 1% to 3% per floor (Photo 2). Either electricians will spend time waiting to enter the aerial lifts, or they'll have to take time to walk up to the designated floor. This applies not only to the start and end of the day, but also for designated breaks, lunch, and trips to the storage trailer for tools or material. On buildings with fewer than 10 stories, the general contractor may not provide an aerial lift.
Getting material where it needs to be is more challenging with taller buildings. There may be a schedule for each trade for usage of the lift to hoist materials and tools to the work area. Cranes will be used to hoist large switchgear into place and unload it at the work level. This coordination may take longer than you carried out in your estimate. And don't forget the “cost” for picks or lifts — that $50 or $100 tip to the crane operator and his crew will prove to be well worth it in terms of worker productivity.
Expansive project — If your project is spread out over a large surface area, moving around the site will take your crew more time. Because material and tool storage may not be adjacent to the work area, it may make sense to rent golf carts or gators. In these instances, the productivity gains will far outweigh the cost of the rentals in the end. Some contractors use a site truck, which is usually an unregistered pickup truck that moves from site to site, for this purpose. On larger projects, an electrical contractor should also consider the added cost of security/theft protection, debris/trash removal, and access to materials. Although these factors may not seem to outwardly affect labor productivity, you'll quickly realize they do so indirectly upon the project's completion.
Accessibility and location
Another area electrical estimators can't afford to underestimate when trying to identify the true cost of a project is logistics. If workers have to park in a remote area or need to take an aerial lift, for example, this will take time away from work, thereby reducing productivity.
Number of trades on the job site — The larger the project, the more condensed the schedule and the more tradesmen on the job — all with their own lifts, materials, and tools. Consequently, restrictive working conditions will ensue due to cramped working space.
Location — Is your project in an urban, suburban, or rural setting? Job location can pose issues that affect job productivity. For example, working in a city typically introduces parking and material storage challenges. Remote parking areas and material storage will mean increased costs for transportation to the job site. Although suburban projects typically pose fewer issues, job-site parking often becomes problematic. This is dependent on the size of the project site versus where work is being performed. Even in rural areas, accessibility may again be an issue. Although there may be space to park, is it paved? If not, then snow, mud, and rain may quickly become your enemies.
Occupied premises — When a project involves occupied spaces, labor inefficiencies result. Although it's certainly not the norm to work around an open store or an operational medical facility, sometimes it's unavoidable. When bidding a project involving an occupied premises, a labor adjustment factor of 30% to 50% should be considered to cover these inefficiencies. In occupied spaces, much of the work must be done during “off hours.” As such, shift differentials should be carried in your estimate. These situations usually warrant the work being done and then “cleaned up” at the end of the shift, before the building is occupied the next day.
Renovations — Renovation projects are comparable to Forrest Gump's box of chocolates — you never know what you're going to get. Similarly, as-built drawings may not have been updated, and site conditions may not be what you expect. Therefore, allow for some rework on these projects, and be aware that your labor force will not be as efficient on renovation work as it is with new construction. Make sure special challenges of a renovation also are covered in your estimate.
Work schedule and labor availability
Although this category seems like a no-brainer, mastering the art of anticipating changes in the schedule and adapting to changes in the labor pool separate the good estimators from the great ones.
Scheduled overtime — Whenever an employee works overtime, productivity loss occurs. When more hours per day and days per week are worked, loss of productivity becomes even higher. For example, according to the NECA Manual of Labor Units, working 10-hr days, five days a week can result in a productivity loss of 15% to 20% after six weeks, while 12-hr days during the same time period translates into a loss of as high as 35% to 40%. Working seven 10-hr days can result in nearly 20% productivity loss in the first week and 40% to 45% by week six. Some sources say working that seventh day is totally counterproductive, so why do it?
Worker fatigue sets in after six days are worked and/or after a worker has worked the “normal” hours of a typical work week. One way contractors can combat this issue is to rotate the overtime required among workers, if possible.
Abnormal project durations — When the actual progress of work differs from the schedule provided in the bidding documents, the contractor experiences lower productivity. Electrical contractors have very little control over project schedules, because their work cannot be started or completed until work by other trades has been performed. Sometimes, bid documents don't detail the work schedule. Ideal efficiency is achieved when the contractor has time to ramp up man power and tools to the time when the peak workforce is achieved — and maintained until the electrical work is substantially completed. Oftentimes, however, scheduled target dates are missed, causing increased costs for the electrical contractor. Your project manager should document each of these occurrences and make sure he has a signed change-order for you to recoup your costs on these items.
Before you sign a contract, obtain a copy of the schedule. Is it feasible? Does it fall in line with the way you estimated the project? What's your experience with the general contractor? Does he or she have a reputation for missing target dates? Every community has a general contractor that is notorious for antics that can cost electrical contractors time, money, and their sense of humor. Learn how to work with these contractors or avoid them — just don't think you can change them.
Abnormal work schedules — Basic labor units are based on working 8-hr days, five days a week during daylight hours (Photo 3). Any deviation from this standard schedule will impact labor productivity.
Project management scheduling — When an excess number of electricians are working on a construction project, there is a loss of productivity. When a job is not staffed properly, the contractor may not meet the completion date for the project, possibly resulting in penalties. In order to maintain a satisfactory level of productivity and to complete the project on schedule, the optimum number of workers is required on each project. Man-loading your project to your schedule will ensure you know what your staffing requirements are for that particular job.
Gantt Charts can assist you in scheduling complex projects. Not only can they help you plan the tasks that need to be completed, but they also can give you a basis for scheduling when these tasks will be carried out, allowing you to plan the allocation of resources needed to complete the project. When a project is underway, Gantt Charts help you to monitor whether or not the project is on schedule so you can adjust your workforce accordingly. Successful business managers realize that worker productivity is the key to success. Workers who are not using their time and resources effectively cost the company money.
In order to complete a man-loading chart, you must determine the duration of the project, rate of man power usage, and peak workforce. On a typical job, this chart would follow a simple bell curve, whereby you start the project with a few electricians, ramp up to your peak, and then ramp back down to completion. But what happens when you start slow and get delayed? In order to complete the job on time, you may have to use a peak workforce at the end of the project to finish on time. What does this do to your costs? You should never sign a contract on a job unless you have a construction schedule.
Temperature and humidity
Temperature, humidity, precipitation, and wind velocity all affect a worker's productivity. According to actual laboratory studies, 100% efficiency of workers can be achieved only when the temperature is between 40°F and 70°F and the relative humidity is below 80% — the “10 best” days of the year.
What happens during the other 355 days? Work decreases above 80°F and below 40°F. Humidity becomes a factor at higher temperatures. If you are bidding a job in a very humid area — and it's scheduled to start in June and end in September — you should adjust your labor factor an average of 15% to compensate for the effects of heat and humidity on your workforce. The same holds true if you're bidding a job in a cold climate that's scheduled to start in November and end in February. You'll have a labor adjustment for extremely cold temperatures (and possibly snow and wind). In this case, a 20% adjustment factor should compensate.
A wise contractor would think that if he factors in any or all of these items, he'll never get a job. However, the whole point of estimating is to determine all your project costs before submitting a bid. The price you put on the job ultimately comes down to strategy. So the more you know about your job before submitting your price, the better off you'll be in the long run.
Using a system of job cost controls and historical data will help you arrive at an accurate cost estimate. Traditionally, far too little attention has been given by contractors to the effect of job conditions. Ignoring these job factors will result in bidding a job at or below your cost. Although no perfect labor adjustment exists for all jobs, with experience and your historical data, you'll learn how to apply this information effectively into estimating and project management.
Candels is president of Candels Consulting, an electrical estimating consulting firm located in Niantic, Conn. She can be reached at [email protected].
Sidebar: What is a Labor Unit?
A labor unit represents the amount of time it takes to install any piece of a construction project — be it a length of conduit or wire, light fixtures, feeders, etc. A quantitative take-off will detail the material and labor unit required to install each item. The actual installation time, however, accounts for only 68% of a labor unit. The balance is comprised of time to lay out the job, study plans, receive material, mobilize, clean up, take coffee breaks, and other non-productive time.
