Manhours are an important part of making a lucrative project offer and determining the cost of the work completed. Since workforce makes up a large portion of most contract work, accurately estimating and reporting labor hours is critical to the success of your business.
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Part 1 of 2: Estimating Working Hours for Project Bidding
Step 1. Divide the project into components
The first part of calculating the hours worked for a job is dividing the project into smaller components. Then, estimate the number of hours it will take to complete each component. These components should be designated according to the type of workforce involved. If you are building an apartment complex, you will need labor in excavation, construction, electricity, plumbing, and so on. Make sure you estimate each component that is part of the project.
Step 2. Determine the type of workforce needed
The type of workforce is highly dependent on the tasks that need to be completed. You don't need a foreman for every job. Simple tasks can be performed by assistants or interns. This determination process is more difficult for jobs that involve a mix of different types of workforce, ranging from simple to complex.
Step 3. Estimate the time required to complete each component
Once you have determined the components and the type of labor for each component, estimate the total number of man-hours required to complete each stage from start to finish. Don't include breaks. The number of hours worked should reflect the length of time labor is devoted to completing a stage.
- If you know the type of work for each stage well, try using past projects as a reference for estimating work time. For example, if you know that it takes ten hours for one worker to install four new windows, or 2.5 hours per window, your current project may not be much different.
- If a stage in your project involves a different type of workforce, no once you get acquainted, do some research to prepare your estimated working hours. depending on the project, you may find valuable information on the internet or other contractors. You can also use the services of a consultant who is familiar with the type of workforce you need. A consultant can help you estimate the working hours needed to complete a particular stage.
- Also consider factors such as the degree of difficulty of the work when making estimates. If the window in your future project is on the 7th floor, and the window worked on in the previous project is on the first floor, increase the hours-per-window ratio to account for this difference.
- Include estimates for time spent on administrative tasks required by the contract.
Step 4. Include the supervisor's hours
You can also include project hours for the foreman or manager, who will lead a team of workers and manage detailed reporting and project schedule compliance. Some projects may employ more than one supervisor or foreman and manage the different components of the project. Other projects may use several different levels of supervision. You may have a foreman to manage workers across different components of a project and a primary supervisor who manages all foremen.
Step 5. Use your estimates to prepare a project timeline
Your client will determine the project completion time. Perhaps the client will ask you to specify how long it will take you to complete the project. You can use calculated stages and hours to develop a project timeline. Determine components that can be completed simultaneously, and components that must be completed in stages (the output of one process becomes the input of the next process). If you know when each stage needs to be completed, you can divide the number of hours it takes to complete one stage by the 8-hour workday over the project time period. You may be able to lengthen or shorten the project timeline by adding or reducing the workforce. The more workers you have, the faster a stage can be completed.
- Some projects require more than 8 hours a day or 40 hours a week to complete stages on schedule. They need overtime which must be incentivized.
- For example, if you have one month to build the foundation of a new house, and you know building the foundation requires 1,000 hours per labor, divide 1,000 by the 8-hour workday in a month to determine the amount of labor required to complete that stage at the exact time. time (1000 project work hours / 20 working days in a month = 50 hours per day; 50 hours per day / 8 hours per labor = 6.25 labor required.)
- Be realistic about the number of workers employed in the specified time period. It would be unrealistic to need 7 electricians to complete the circuit installation in a week, depending on the availability of electricians in your area. You may need to extend the timeline to meet workforce availability for your project.
- If you plan to complete several stages at the same time, you will need to divide the workforce to complete each stage.
Step 6. Prepare and submit your offer
Add the hours worked for each workforce needed so you have the total hours worked for each type of workforce. If you only need one type of workforce, please combine all project hours into a single number. If you require different types of workforce, your offer should specify the number of hours worked for each type of workforce. We recommend that you include all labor costs including taxes and benefits. Some contracts may specify a minimum wage rate for each type of workforce. Also, include any markup (profit portion) you want to charge.
For example, let's say you were selected to install a new kitchen for a medium-sized house. You should divide the project into several stages, consisting of plumbing, electrical, and general construction work. Your offer should reflect the total hours worked for electrician, plumber, and general construction work, as well as salary rates for each type of workforce
Step 7. Adjust the estimated working hours as the project progresses
Since the time estimates are only estimates, you should update the estimates as the project progresses. You may have to bill the client based on the team's actual hours worked so you should periodically provide up-to-date estimates of hours worked. This prevents the client from being surprised by the overexploitation of working hours.
- Include a "fudge factor," which is the increase in approximate time due to the unknown. The amount of fudge factor depends on the complexity of the work, availability of labor, dependence on external agents, and the relationship of one process to another.
- Most contractors explain that their bids are estimates. Actual hours worked will vary, and clients will pay according to actual hours worked as the project progresses. However, it is possible that the client will want to pay a lump sum based on estimates and not pay for actual hours worked. Pay close attention to all contract language that indicates this agreement because in an agreement like this, the contractor must estimate costs carefully.
- If the client is going to pay based on actual hours worked, don't forget that your offer reflects estimates, and you shouldn't charge significantly higher hours worked unless there is a compelling and provable reason. If you encounter a problem and it is confirmed that you exceed your estimated working hours, inform the client to prevent misunderstandings
- Make a written agreement that states the work that is most likely to appear and is outside the scope of work. Include processes for the identification and approval of these changes, such as permits and required documentation.
Part 2 of 2: Reporting Working hours for Contract Work
Step 1. Gather information on your workforce
Make sure the employee files for all workforce on your project are accurate, and maintain them. This includes payroll records and all legal documents. If you use engineers, electrical technicians, plumbers, or other licensed workers, you will need to keep proof of their active certification files. It is required for most engineering and construction jobs to find out whether labor is contracted by the state. You have a responsibility to ensure that everyone who works for you is properly certified, including subcontractors.
- You may pay a non-employee salary to work on a project. These subcontractors work for you, the contractor, and you charge the client their salaries. Even if the subcontractor is not your employee, their certification information must be collected and kept on file. As a contractor, it is your responsibility to ensure that everyone working on the project has the appropriate qualifications, unless stated in the contract.
- Government contracts usually require additional employee and subcontractor information to ensure compliance with the Act. This includes reporting on ethnicity and salary rates to ensure that there are no discriminatory practices. If you have a government contract, carefully read and follow all instructions regarding recruitment and reporting to prevent salary problems.
Step 2. Monitor labor time
In order to be able to produce accurate reports to clients, you need a method of monitoring the working hours of the employees working on the project. You can use a time clock or time sheet, but these records must be verified to ensure accuracy. Depending on the agreed contract, you may be required to conduct periodic audits and prove the validity of the reported number of hours worked
- One way to ensure the accuracy of working time reporting is to place a supervisor on each employee or group of employees. At the end of each week when the employee submits the time card, the supervisor can review and sign the card, to prove it is correct. This prevents employees from adding fictitious hours worked.
- You can also try using an electric work time card system to monitor employee work time. Make sure the system is well controlled to prevent misuse. If the hours worked report is questionable, you must be able to prove it.
- Government clients are required by law to collect all information before paying contractors because wages are paid from taxes. The level of oversight when reporting government project timelines will be very high. Follow all reporting instructions carefully and in detail as agreed.
Step 3. Send labor wage reports to clients on a regular basis
Your contract should specify how often you must report the number of hours worked to the client in order to receive a salary. When submitting this report, you will transfer information from your payslips and clocking documents to a client-specific report that compares the number of hours billed with the estimated hours worked at the time of bidding. If there is a large discrepancy between the estimated and actual number of hours worked, you must be able to give the client a solid explanation.
Step 4. Use notes to prepare estimates for your next project
At the end of the project, your working hours monitoring information will be invaluable as it provides details on the length of time specific jobs are completed. You can use this data to make estimates, such as the number of hours worked per number of tiles installed or the waiting time after leveling wet cement. This information will improve your future offerings and keep your business profitable.
