Let Labor Hours Lead the Way

Find out why using labor-units to estimate labor hours on any electrical wiring project is a skill that combines both art and science. For many electrical contractors, determining the labor hours required to complete a job can be very intimidating. Before you can estimate a job with a fair degree of accuracy, you must gain confidence in how to determine the expected labor hours and their related costs.

Find out why using labor-units to estimate labor hours on any electrical wiring project is a skill that combines both art and science.

For many electrical contractors, determining the labor hours required to complete a job can be very intimidating. Before you can estimate a job with a fair degree of accuracy, you must gain confidence in how to determine the expected labor hours and their related costs. There are basically two methods you can use to do this: using your personal work experience or relying on standard labor-units. Let's examine each of these methods in more detail.

Personal experience. Using your personal experience is fine for smaller job, as long as you keep detailed records from previous jobs. By using your experience and historical data, you can typically get reasonably close on the estimated time to complete a similar job.

However, most contractors do not keep records on the actual time it took to complete past jobs. Without historical data, most of us underestimate the time it actually took to complete the work. In addition, many new contractors figure the time it would take them (a highly motivated worker) to complete the job, not the time it takes less skilled and less motivated employees to complete the same tasks.

Labor-units. Using labor-units to determine the labor hours necessary to complete a job is a skill that combines both science and art. It is a science in the sense that the labor required to complete a task is a function of the material you're required to install. With labor-units, you can determine the total labor required, even if you don't have experience with that particular type of job. You just need to know the quantity of each material item required. Estimating with labor-units also requires creativity because you must adjust the labor-units for specific job conditions and changing circumstances.

Why are many electrical professionals leery of using labor-units to estimate a job? Because they think if the total labor hours looks too high to prospective clients, they won't win the bid. This is not necessarily true. Once you understand how to use labor-units, you'll see how much control you gain in properly estimating any electrical wiring project.

What exactly is a labor-unit? A labor-unit represents the estimated time required to install an electrical product, component, or piece of equipment. We base labor-units on the assumption that a skilled and motivated electrician will complete the task under standard conditions with the proper tools and training.

A labor-unit consists of six major components, including installation, job layout, material handling and cleanup, nonproductive labor, supervision, and tool handling. Let's take a closer look at each.

Installation. The actual time you expect it will take to install an electrical product represents about 50% of the labor-unit. This covers items such as boxes, raceway fittings, wire, devices, fixtures, switchgear, disconnects, panels, and breakers.

Job layout. The layout of the work you must install represents about 15% of the labor-unit. This includes measuring and determining the type, size, and location of the conduit, wire, box, or fixture you're installing.

Material handling and cleanup. This step represents 10% of the labor-unit. You must purchase, receive, unload, unpack, count, and store material. Included in this percentage is the time it takes to you get material to the installation location. In addition, this portion of the labor-unit represents the labor required to cleanup and dispose of the shipping containers.

Nonproductive labor. Although all jobs have nonproductive labor, it should not exceed 5% of the labor-unit. Watch out for early quitting time, which is often linked with late starting time. You know how it goes: Two people look at their watches: One watch indicates 8 a.m.; the other shows 7:55 a.m. The crew waits 5 min to start the job. The opposite is true at the end of the day. This game results in a loss of 10 min a day per electrician and calculates out to approximately $1500 per year per electrician (labor rate, labor burden, and overhead). You arrive at this figure by taking 10 min x 5 days per week x 50 weeks per yr = 42,500 min / 60 min per hr = 42 hr x $35 per labor-hour.

Supervision. Supervision of labor (job foreman) represents about 10% of the labor-unit. It includes the review of the blueprints and specifications, ordering of material, working out installation problems, and coordinating the installation with other trades and subcontractors. Supervision also includes inspection tours, crew makeup decisions, record keeping of material, job progress reports, and time cards, as well as many other management duties.

Tool handling. The management, handling, and layout of tools represent about 10% of the labor-unit. You must order, receive, uncrate, and store tools. In addition, you must move tools to the work area, set up, as well as return them for storage, repair, and cleanup.

What type of labor is not included in a labor-unit? Assembly of fixtures, switchboards, panelboards, or other equipment. Be careful with owner-supplied equipment. The owner might have gotten a great deal on the fixtures, because the products came in a bag with assembly instructions. Other actions not included in a labor-unit are:

• Cutting holes or openings;

• Excavation, drilling, or blasting;

• Heavy equipment (operator's time);

• Hoisting material and tools above three floors;

• Maintenance of temporary equipment;

• Painting of raceways; and

• Testing and/or extensive inspection tours.

At times, you'll need to determine the labor required for a task you have absolutely no idea how to handle. The first step is to break the task down into as many small individual labor segments as possible. Try to establish a labor-unit for each segment, by comparing the individual segments to similar tasks you have labor-units on.

The "Manual of Labor Units," published by the National Electrical Contractors Association (NECA), is one of the finest labor-unit manuals available. This comprehensive labor reference lists the national average direct labor time required to install electrical materials, under varying degrees of difficulty. It also includes condensed versions of publications related to overtime, labor productivity, and industry average statistics related to normal project duration, project peak workforce, and the normal rate of manpower consumption.

The NECA labor-unit manual bases labor-units on a single building of no more than three stories not exceeding 100,000 sq ft, located near a metropolitan area, with a job schedule of no more than 8 hr per day and 40 hr per week. The manual is available in both printed and electronic versions.

A few examples. We express labor-units in units of decimal hours, such as (E) for each, (C) for hundreds, and (M) for thousands. Here are a few examples to illustrate this concept.

Example No. 1: The labor unit for a 15A duplex receptacle is 18/C. This means you could install 100 receptacles in 18 hr, or one receptacle in .18 hr. This works out to be 11 min per receptacle (60 min2.18 hr each).

Example No. 2: The labor unit for a No. 12 THHN is 4.25/M. This means you could install 1000 ft of No. 12 wire in 4.25 hr, or 200 ft (100 ft pull) in .85 hr. This works out to be 51 min (60 min2.85 hr each).

You might be thinking 11 min to install a receptacle or 51 min to pull a 100-ft run of No. 12 wire is too much time. I'll never get a job based on these time factors, right? Wrong.

When you consider supervision, job layout, tool management, material handling, nonproductive time, and other job site conditions, this number becomes much more realistic. It's better to offer a realistic estimate than fail to meet expected goals.

Whether you choose to let personal work experience be your guide or use labor-units to establish total labor hours on your next estimating project, remember to keep your feet on the ground. It won't matter how many bids you secure in the end if you continuously fail to meet proposed labor goals. Although there is an art to estimating and you'll inevitably get better with time, the science behind using labor-units makes sense. That's why combining the two approaches leads to more accurate estimates every time.

Sidebar: Time Savers

Whenever possible, purchase pre-assembled equipment or equipment that is installer friendly, such as fluorescent lay-in fixtures that are pre-lamped and pre-whipped. Equipment that is not pre-assembled is actually more costly than pre-assembled and user-friendly equipment, once you include labor cost, burden, and overhead.

For larger installations, order the wire precut, in triplex or quadplex on reels. This is a real time saver because the wire is already together, and you are only pulling from one reel. The cost of triplex or quadplex might be slightly greater, but the labor savings can exceed the increased material cost.

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