Project Risk Assessment and Decision Support Tools

Search Timer

Reasons for High Direct Labor Hours per Unit

  • Implies: A higher workload/more complexity/re-work/strike/used improvised work arounds/used more hours than anticipated/emergency work  – done continuously/ stipulations delayed job/obstacles on-site/more specialized labor/ new labor contract/ non-standard work being performed/ additional new process steps/ unplanned/ emergency work or condition/ permit stipulations delayed job/ poor supervision/ poor employee performance/ additional testing/ monitoring/ too many people being employed at the time; staffing/ high sick/ vacation times/ equipment shortage requiring additional overtime on weekends/ holidays/ overnights/ improper coordination of organizations/ trades on-site/ delays loading and unloading resources/ adverse weather conditions/ equipment disabled or accident/ special events/ holidays/ higher priority work limited access to the project/ new regulations/ shortage of skilled workers
  • Less Efficient Workers: Perhaps training new/unskilled or inexperienced people; requirement to stand-by/idle-time making the jobs take longer to complete/doing work out of sequence, behind schedule/ too many people out sick/ labor shortage/ more work done on off-hours/ higher quality requirements/ higher rates due to seasonal operations/ inefficient work rules
  • Evaluate: Are paying a higher labor rate?  Are these non-recurring labor hours?  Any high-hour jobs skewing the results? Are overhead rates being properly applied? Incorrect materials being delivered (causing delays)? Maintenance? Unnecessary work being performed?  Culture-driven self-interest to “pad” job with unnecessary work/ improperly (overly) paid workers?
  • Reflects: Paying overtime, undertime (excessive people on the job)/shift/premium pay/mechanical  breakdowns/new hires/late material delivery/ material shortages/ nature of the task/more stringent requirements/timing differences where the hours were charged without a stroke count being assigned
  • Includes: Labor hours spent on mandated unfunded programs/travel time
  • Does Not Include: Overhead
  • Note: This is an unfavorable variance