Introduction
In the present fast-paced highly industrialized age, many of the products in the market are increasingly being mass-produced in factories by machines. However, a building still remains as one of the few handcrafted products put together piece by piece by skilled and unskilled workers.
The construction industry, to which these workers belong, is one of the most non-automated or labor-intensive industries in the world. The labor cost element of a building construction project may vary from 30 to 50%, and sometimes can be as high as 60% of the total construction cost. Therefore, the labour component is considered a very important area in a construction project.
A building is a very complex product, made up of many different systems, such as the structural system, exterior enclosure system, interior finishes, plumbing, and HVAC system, etc. These systems can be separated into many other subsystems and sub-sub systems. For example, beam concreting can be divided into the formwork, reinforcements, and concreting. Again, reinforcement can be sub-sub divided into cutting, bending, placing in place, etc.
A building construction project can be divided into many work packages. A work package can then be allocated to and accomplished by an individual worker or a crew. A crew can be described as a group of workers. These workers may be from the same trade or may be from a combination of many different trades. Different tasks involved in the construction of a building need many types of craftsmen from various trades.
Labor’s production rates or Productivity
A production rate is defined as the number of units of work completed by a worker in a definite time period. Production rates may specify in the form of time in man-hours or man-days necessary to produce a specified number of units of work.
The time that a labor will consume in performing a unit of work varies between labors, between projects, with climatic conditions, job supervision, complexities of the operation, and due to many other factors. For example, it may require more time for erecting a shutter for stairs than for a beam.
Sometimes, the production rate is substituted by the term productivity. Productivity is the ratio between input and the respective output.
In construction, the labour input can be expressed as the work hours of a worker or a crew. For example, it may be 4 hours of bricklaying gang.
The output can be stated as the amount of work completed. For instance, it may be expressed as laying 500 bricks or may be expressed in square meters.
Accordingly, construction productivity is defined as the quantity of work produced in a particular time period by a worker or a specific crew. In other words, it is the quantity of construction output units produced in a given amount of time or a unit time.
The formula for productivity is presented as follows;
Construction productivity = quantity of work produced / time duration
Example – If a bricklaying crew can lay 560 bricks in 8 hours, then, the related construction productivity is 560 bricks divided by 8 hours, which are 70 bricks per bricklaying crew per hour.
With compared to most of the other items associated with monetary factors, labour productivity is highly variable. It can fluctuate widely. For accurate estimation, an estimator or a quantity surveyor must have good historical records of the output of his workers, require a lot of experience, in addition to theoretical knowledge.
Productivity sources
Productivity rates can also be determined from already published sources from different institutions, such as Construction Cost Data.
Sample norms of some common work items are given below;
| Description | Unit | Quantity | Skilled labour (days) | Unskilled labour (days) | Cement (50 kg bags) | Sand (m3) | Metal (20 mm) | Bricks (nr) | Small plants (days) |
| 1:2:4 (20 mm) concrete | m3 | 1.00 | 2.55 | 6.20 | 7.00 | 0.20 | 0.97 | – | 0.83 |
| Brick Work | m3 | 1.00 | 1.10 | 1.50 | 0.82 | 0.40 | – | 540 | – |
| Cement plaster | m2 | 1.00 | 0.11 | 0.16 | 0.15 | 0.02 | – | – | – |
Productivity must be presented in labor hours. Then, the record can be normalized. Therefore, it is not subjected to the variability in project locations and prevailing wage rates. In this way, unit labor costs for the contractor’s own operating area can be easily developed by multiplying local wage rates (which includes all other benefits) by the productivity rate.
Example – A contractor determines that the unit productivity for painting a wall is 0.55 hours per square meter. If the wage rate including other benefits is LKR 250 per hour, the unit labour cost become (0.55 hours per square meter x LKR 250 per hour) = LKR 137.50 per square meter.
Estimating work duration
Determining the total work duration for an activity or a task involves knowledge of the quantity of work required for the task and the production rate for the specific crew that will be performing the work. The quantity of work related to the material quantity can be determined by the quantity take-off. A better approach to the estimation of activity time duration is to maintain historical records of the particular activity, and rely on the average duration from the experience in making new duration estimates. Since the scope of activities is unlikely to be identical between different projects, unit production rates are typically employed for this purpose.
The duration of an activity may be estimated as shown below.
Work duration = quantity of work / number of crews × production rate
Example – Find the duration of interior and exterior painting activities with quantities of 550 m2 & 406 m2 respectively, using crews of 11 m2 / hours & 14 m2 / hours for the interior & exterior painting activities respectively. (Assume the same crew is used for both works).
Solution: Interior painting duration = 550 / 11 = 50 hours
Exterior painting duration = 406 / 14 = 29 hours
Total work hours = 79 hours
Usually, the quantity of work to be completed can be determined from the architectural drawings of the project. The number of crews working is decided by the planner/estimator or the quantity surveyor depending on resources available as well as the work programme.
In many cases, the number or amount of resources applied to particular activity may be modified after considering the resulting project plan and work schedule. Historical records in the particular construction organization can also provide data for the estimation of productivities.
Having defined the duration of a given work means that the planner/estimator or the quantity surveyor has already defined the number of resources that will be employed in a particular work. After knowing the activity time duration and resources to be employed, it is easy to estimate the direct cost of the activity. Then, the three elements of an activity, the time duration, type of resources, and cost of procuring resources for the activity form the construction method.
The Basic principle for estimating labor costs
Labor costs in construction are determined by two factors: monetary & productivity. The monetary factor is related to hourly wage rates plus other benefits. Estimating the constituents of the monetary factor is more difficult in construction than in other industries. This is due to the different types of work and skills involved in construction. Although the computational process of this component seems complex & tedious, it is only a matter of accounting as the needed numbers (such as wage rates, fringe benefits, etc.) are readily available.
The method for calculating the total cost of labor is relatively simple. It requires the knowledge of the total work hours or labor hours needed to perform all the tasks & then applying the corresponding wage rates.
The formula for calculating the total cost of labor is as follows:
Total cost of labor = total work hour × wage rate
Example – A welder works 10 hrs/day, 6 days/week. A basic salary of LKR 350 / hr is paid for all straight-time work, 8 hrs/day, 5 days/week. An overtime rate of one time & one-half is paid for all hours over 8 hrs/day, Monday through Friday, & double time is paid for all Saturday work. The meal allowance is LKR 200 per day. Calculate the average hourly cost to employ the welder.
Solution: Actual hours = 10 × 6 = 60 hrs
Pay hours = weekly straight time + weekly overtime + Saturday overtime
= (8 x 5 × 1) + (2 x 1.5 x 5) + (10 × 2)
= 75 hr
Average hourly pay = (75/60) × LKR 350 = LKR 437.50 / hr
Meal allowance = (LKR 200 x 6) / 60 = LKR 20 / hr
Then, the average hourly cost = LKR (437.50 + 20) / hr
= LKR 457.50 / hr
Example – Assume that a crew for a work item includes three bricklayers (masons) & two helpers. The crew works for three days (8 hrs/day) to complete the work package. The wage rate for each bricklayer is LKR 337.50 / hr & each helper is LKR 260.00 / hr. Find the total cost of the crew for the work item.
Solution:
Total cost = (3 × 3 × 8 × 337.50) + (2 × 3 × 8 × 260.00)
= LKR 36,780
Sometimes, the productivity of a specific work crew is stated in man-hours/unit, and not in units/day.
For example, if the productivity is said to be 0.5 Man-hours/cubic meters, this means how long it will take one labor to construct one unit. This way applied to any crew formation and work hours.
More Examples
Example – If the daily production rate for a crew that works in an activity is 175 units/day and the total crew cost per day is LKR 18,000.00. The material needed for daily work is 4.5 units at LKR 10,000.00 /unit.
a. Calculate the time and cost it takes the crew to finish 1400 units.
b. Calculate the total unit cost.
(Consider an eight hour work day).
Solution:
a) Duration = Quantity / (production per unit time x number of crews)
= 1400 / (175 x 1)
= 8 days
Cost (labour cost) = Duration (units of time) x Crew cost per unit of time
= 8 days x LKR 18,000 per day
= LKR 144,000
Total direct cost = LKR 144,000 + (4.5 units of material x LKR 10,000 per day x
8 days)
= LKR (144,000 + 360,000)
= LKR 504,000
b) Unit cost = total cost / quantity
= LKR 504,000.00 / 1400
= LKR 360.00 / unit
Sometimes the productivity of a specific crew expressed in man-hours per unit, not in units per day. For example, if the productivity is said to be 0.5 Man-hour/cubic meters, this means how long it will take one labor to construct one unit. This way, it can be applied to any crew formation and work hours.
Example – What is the duration in days to install 600 square meters of walls shuttering if:
a) Crew of 2 carpenters is used with output of 200 square meters/day.
b) Productivity is measured as 0.08 man-hour/square meter. Number of carpenters = 3, and number of working hours/day = 8 hours
Solution:
a) Duration = 600 / 200 = 3 days
b) Total man-hours needed = 600 × 0.08 = 48 man-hours
(if one man used)
Duration = 48 / 8 = 6 days (if one man used)
Duration using 3 men = 6 / 3 = 2 days
Example – (use of several resources) – What is the duration of an excavation activity with a quantity of 3000 m3 using an excavation crew consists of an excavator with a production rate of 200 m3/day, a loader of 250 m3/day and 3-trucks of 150 m3/day? Comment on this crew formation.
Solution:
– Using the excavator: Duration = 3000 / 200 = 15 days
– using the loader: Duration = 3000 / 250 = 12 days
– using the 3-trucks: Duration = 3000 / 150 = 20 days
The activity duration is governed by the lowest production rate = 20 days.
This is an unbalanced crew where the loader is not working with full capacity; the production rate of this crew could be adjusted by increasing the number of trucks to 4 of 5 trucks.
Then, for a balanced mix of resources, use 1 loader, 1 excavator and 4-trucks.
Accordingly, the activity duration = 3000 / 200 = 15 days.
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