Measuring productivity for construction workers has never been an easy task. Yet, it is important to track construction labor productivity as it can make the difference between a project being profitable or a project destined to create a loss.
Benefits of Calculating Man-hour Productivity in Construction
In the construction industry, knowing how much a worker contributes to a project has a major influence over how a project progresses. What an employee costs per hour, day, week, or other period is easily calculated by taking the hourly salary and value of benefits for the selected period and comparing it to the total value of the work produced. If labor costs exceed production value, the project management team can strategically change employee’s schedules, assignments, and roles in the most efficient way.
How to Measure Labor Productivity in Construction
To come up with the productivity of labor crews in construction projects takes three calculation. They are:
- Calculate expected income
- Gauge man hours
- Compute Man-hour productivity
Calculate Expected Income
The United States Bureau of Labor Statistics defines labor-hours productivity as the ability for labor to generate more business income from their work than they are paid in wages. So, calculate your expected project income for an individual project or total expected earnings in a given time frame. This number is where you begin to calculate man-hour productivity.
Gauge Man Hours
Let’s assume you want to calculate the man hours over a one-week period. Just multiply the number of employees working during the week by the hours they worked. For instance, you have 10 employees that work 40 hours each in one week. Multiply the number of employees (10) by the number of hours worked (40) and you find that your crew worked 400 hours in one week.
Compute Man-Hour Productivity
First, figure your total man-hour costs for the selected period. To do this, use the following formula:
Productivity measure/expected revenue = labor-hours productivity
If for the one week of work you will earn a total of $12,000 and each worker earns $15 per hour, your total labor expense is 400*$15=$6000. This means, from the standpoint of labor productivity your profit is $6000. As labor expense goes up and productivity remains the same, profits are diminished.
To calculate man-hour productivity and other metrics of profit and loss requires data that is current, correct, and easily available.
Assignar is a Software as a Service (SaaS) for the construction industry and other business’ that are highly regulated. It gets the right workers paired up with the right equipment to get projects completed as scheduled. It also keeps track of hours worked, equipment maintenance, and much more. All the data needed to determine workforce productivity and project profit and loss are easily retrievable using Assignar.
