Calculating True Labour Cost

There is a lot more to this than simply multiplying by a dollar figure. A competent estimator uses a Labour Unit Manual (either published or company created) which consists of historical data measured as benchmarks for completing individual tasks – this assists in calculating the labour required for the average electrician to perform these tasks under average conditions and forms the base labour hours for the job and this gives estimators consistency in their estimating. Professional estimators keep accurate records of job costs and monitor their company’s productivity and revise units to reflect current labour output.

Average conditions do not always exist and other factors which must be considered include; location of the job, degree of difficulty, time to get to the workface, access, security check points, height, confined space, heat, cold, material storage arrangements, lifting requirements, site induction, fast track construction and weather all require a percentage added to the base labour rate

A typical labour unit schedule and demonstrate the calculation for working at height:

P.V.C./P.V.C. MULTI CORE CABLES
3 Core & Earth & 4 Core & Earth

Labour units in hours per 100M installed, up to 3M working height

Courtesy: Electrical Estimators Labour Unit Manual
For working levels 3.5M - 5M add 10%
For working levels 5.5M – 7.5M add 25%

It can be seen from the above labour units that the installation of a 130 metre run of 4X35mm cable, laid on trays would be 23.07 hours under average conditions but if the installation was run at 7.0 metres above the floor then the hours would increase to 28.84. Further adjustments and percentages are added in accordance with the difficulty of the job.

When estimating the labour content for installations in factories, warehouses and any structure at a height above 3 metres can add considerable cost to the job.

Getting labour to the workface can also be a costly exercise and often underestimated, multi-storey buildings, large industrial plants, large building sites where the site sheds are located hundreds of metres from the workface, sites which have a security ritual to perform before gaining access can all run the labour up quite extensively.

As as a simplistic illustration; a 45 storey building with the worker’s site sheds located 100 metres from the building with a team of 30 electricians and an average of 3 trips to and from the workface per day on a project which runs for 60 weeks could look something like the following:

30 men, 3 trips per day @ average of 15 minutes per trip = 1 hr per day per man 60 weeks @ 1hr = 60 X 30 men = 1800 hrs @ base loaded rate $ 66.59 per hour = $119,862

Note: the “loaded rate” is the cost to employ an electrician and does not include any business overheads or profit. These figures are just for walking time and do not take into consideration the additional time incurred retrieving and moving materials which is also considerable on a large or multi storey site.

Many sites only have a small passenger capacity in the site lifts or on surface transport on a large industrial site and the time to the workface can increase dramatically when moving a large crew.

It is the estimator’s responsibility to have included in the final selling price of the tender all the cost associated with the labour to complete the job.  

 
Brian Seymour MBE, industry consultant, author of “Electrical Estimator’s Labour Unit Manual” and “Starting Out”, conducts regular industry training programs throughout Australia on behalf of the Electrical & Air-conditioning industries
[email protected]. www.moyseur-consulting.com