Mike Holt Business Newlsetter Series
Mike Holt
Estimating is a skill that can make or break a career or company. Understanding the estimating and bidding processes is essential for your business to remain profitable. In this electrical estimating series I explain how to determine the material cost, labor cost, and calculate direct job costs, overhead and profit. You'll have the knowledge to anticipate and avoid losses - which in some cases might mean not taking the job!

This is newsletter #18 in the series. If you have missed prior newsletters, and are enjoying the series, we encourage you to take advantage of the discount offer for the complete Electrical Estimating Program. Click on the coupon at the bottom of this page.

Adjusting Labor Units for Job Conditions

Following are some of the many factors that you will need to consider when adjusting labor units for job conditions.

Ladder and Scaffold Work
Ladder. Any portion of a job that requires working on a ladder will result in an increase in labor as compared to a job at grade level. Working is more difficult and tiring on a ladder, and there is an increased risk of injury from falls. The following labor-unit adjustments for ladder work should be considered for any portion of the job that is not at grade level.

Ladder Labor-Unit Adjustments

12 ft

3%

13 ft

5%

14 ft

8%

15 ft

10%

16 ft

13%

17 ft

16%

18 ft

19%

19 ft

22%

20 ft

25%

Scaffold. If you are performing work from a scaffold, you need to consider the labor required to set up, move, and dismantle it. Do not forget you have to somehow get tools and material up to the working platform, then before the scaffold can be moved, all tools, equipment, and material must be brought back down. If in moving the scaffold you encounter a large obstruction (like a doorway), it might have to be disassembled and reassembled. For safety and efficiency, you will need one electrician at the bottom of the scaffold at all times.

How much do you increase the labor unit for work performed on a scaffold? This is a tough one, but figure at least a 40 to 50 percent increase in labor units, plus the time to wrestle with it (setup time, take-down, and the time needed to return the scaffold). If the work can be performed from motorized platform lifts, this adjustment can be significantly reduced.

Management
Proper job management ensures a well-trained and motivated quality workforce that has the material, tools, and information needed to get the job done right the first time with the least amount of effort. If properly trained, equipped, and motivated, your work force will be content and proud to work for your company; and that means they will give their best. If you (the manager or owner) are not organized, you can be sure that all of those below you are not organized either and will have difficulty competing in today’s market.

The most efficient method of having a productive labor force is for them to be happy. Of course, everybody wants a bigger paycheck but that is not all there is to being happy. What people desire is to feel valued and believe they are part of something special.

Successful contractors hire the right people, pay them fairly, provide them with benefits, give them continuing education, and let them know that they are important—but that is just the beginning. Be sure all of your management staff follows your lead. Do not forget to provide supervisory training for them in all aspects of their responsibility including people skills, job budgeting, project management, and time management.

Make sure that you have a high level of communication from the office to the supervisor about the project at hand and about how the job was estimated. Be sure you have meetings between the office and field personnel to review job progress on a regular basis.

Material
Planning your material orders is critical to ensure the electricians are not held up due to material shortages. There are hundreds of minor items that your workers can run out of, and any one of them can stop a job in its tracks and cost you money while someone makes a parts run. Remember that if the material is not delivered to the job on time, you will be losing money you did not need to lose. Running out of material on a job destroys continuity and motivation on the job; not to mention the cost of inefficiency.

Overtime
Labor units are based on normal work schedules of 8 daylight hours per day, five days per week, and 40 total hours per week, with a minimum amount of overtime once or twice a month. When overtime is required for any reason, there is a substantial loss of productivity during the overtime hours worked, as well as the normal hours preceding overtime.

As overtime increases in magnitude and duration, productivity losses also increase. Overtime interrupts established life patterns and causes fatigue, reduced motivation, and lower productivity. Workers have a tendency to forget safety procedures, which can result in serious accidents and possible fatalities. Consider the following adjustments:

Overtime Adjustments

Six 8-Hour Days

One Week:

+ 15% for the 6th day

Every Week:

+ 15% all labor for week

Saturdays and Sundays after Five Days

One Weekend:

+ 30% for weekend hours

Every Weekend:

+ 30% all labor for week

Extended Regular Hours

Six 10-hour days:

+ 18% all labor

Seven 10-hour days:

+ 30% all labor

Author’s Comment: NECAnet.org has a research report entitled Overtime and Productivity in Electrical Construction.

Remodel (Old Work)
The only way you can know what adjustments to apply for remodel work, with any degree of accuracy, is to track the labor of every remodel job you do and compare the actual hours against the labor unit for future reference. Once you have some experience and job history, you will be better prepared to adjust the labor for future projects. But doubling the labor unit for fishing and cutting in boxes is not a bad place to start.

• • •

We'd love to hear from you about this series, and the ways you're using it. Send us your comments and feedback by clicking on Post a Comment below. Look out for the next part in this series a month from now, and please share with your colleagues.
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