Category: Estimating

Webinar #22: How to Estimate the Impacts of Overtime on Labor Productivity – John Koontz

People are not machines. Running an engine for 16 hours will result in twice the output achieved by running it for 8 hours… but the same math does not apply to our workforce. It is a well-known fact that working longer hours each day, and more days per week, results in reduced worker productivity. However, while it is easy to calculate the difference between overtime premiums and straight time labor costs on a spreadsheet, calculating the real costs of productivity impacts caused by extended periods of overtime work is less clear-cut. So how do we explain, estimate, and account for this lost productivity? In this webinar, John Koontz explains the three types of overtime typically found in construction and talks about the three universally accepted methods of calculating overtime impact costs. Most importantly, he covers the preferred and most effective method of OT impact calculation, which incorporates all three methods. We can’t always avoid overtime, and we certainly can’t avoid the productivity impacts that result from working extended hours – but we can learn to use the information contained in the 2020 Edition of the MCAA Change Orders-Productivity-Overtime Primer to make a solid case for recouping impact costs associated with working overtime.

Additional Resources:

This webinar was recorded June 23, 2020.

Get Your Copy of the New Tool and Equipment Rental Guide

MCAA has released the 2016-2017 edition of its Tool and Equipment Rental Guide. The guide puts the latest comprehensive cost recovery information for commonly used tools and equipment at your fingertips. The single download includes both a PDF version and an Excel spreadsheet. The guide is free as a member benefit.

The rental rates are based on ownership and operating costs for contractor-owned equipment and are derived from formulas and data developed by the experts at EquipmentWatch and from analytic methods used in the construction industry.

Generally, these methods consider the purchase price, depreciation, maintenance and overhaul costs, indirect equipment costs and average annual use hours.

Profit, project overhead and general company overhead costs such as office facilities and supplies are not included in the rates.

Download your copy here.