TRACKING LABOR PRODUCTIVITY IN CONSTRUCTION — UNITS PER HOUR, COST PER UNIT, EARNED VS BURNED.
Labor productivity tracking is the bridge between what happens in the field and what shows up in the financial statements. A crew running at 65 CY/hour against an 80 CY/hour estimate is an operational problem. A job closing 18% over on labor cost is a financial problem. They are the same problem — but the operational version is visible three weeks earlier. Three weeks is the difference between catching a labor trend while 60% of the scope remains and discovering it at closeout when 5% remains.
SPM builds labor productivity tracking into the job profitability system for field-intensive trades. Units per hour, labor cost per unit, and earned vs burned are tracked monthly from closed books and foreman daily logs.
THE THREE METRICS THAT MATTER AND HOW TO CALCULATE EACH ONE.
Units Per Hour — The Production Rate
Units per hour is the foundational labor productivity metric. For any work type where the output is measurable — cubic yards placed, linear feet installed, square feet completed — units per hour is actual output divided by actual hours worked. Compare to the estimated units per hour from the bid. A grading crew estimated at 80 CY/hour running at 65 CY/hour is 19% below target. A concrete crew estimated at 22 CY/placement hour running at 26 CY/hour is 18% above target. The number does not require software. It requires daily production counts from the foreman and weekly timecard hours by work type.
Labor Cost Per Unit — The Financial Translation
Units per hour tells you about production efficiency. Labor cost per unit translates that into financial impact. Fully burdened labor cost divided by units produced equals cost per unit. Compare to the estimated cost per unit from the bid. A concrete contractor estimated at $19/CY running at $24/CY is incurring 26% more labor cost per yard than estimated. On a 2,000 CY pour, that is $10,000 in excess labor cost. Caught at 500 CY — 25% through — there are 1,500 CY remaining to correct the trend. Caught at 1,800 CY, there are 200 CY remaining and the overrun is essentially locked in.
Earned Hours vs Burned Hours — The Efficiency Ratio
Earned hours is the labor hours the project should have taken based on physical completion and estimated labor rates. Burned hours is the actual hours worked. Earned hours divided by burned hours is the labor efficiency ratio. A ratio above 1.0 means the crew is performing faster than estimated. Below 1.0 means they are slower. A ratio of 0.85 means for every hour of estimated labor, 1.18 actual hours are being consumed. That 18% inefficiency compounds across the remaining scope. At 40% physical completion with an 0.85 efficiency ratio, the projected final labor cost is approximately 18% above the estimate.
HOW TO IMPLEMENT LABOR PRODUCTIVITY TRACKING IN 30 DAYS.
The foreman connection: Foremen who see their production numbers daily and know what the target is perform differently than foremen who do not. Not because of pressure — because they have context. A foreman who knows the crew placed 68 CY/hour yesterday against a 80 CY/hour target knows where they need to improve before the PM has the conversation. The daily log is not a surveillance tool. It is a performance feedback system.
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