Understanding Man-Hours in Project Planning
When planning for a major business project or establishing annual goals, examining labor costs is essential to determine whether you can meet your financial objectives. Considering man-hours in terms of standard labor costs and overtime wages helps managers maintain accurate and on-track budgets. Calculating man-hours is often used in preparation for a contract bid, which is common in the construction industry.
For an annual budget, remove all non-working days from the work year. Do the same for a project planned to be completed over a shorter period.
Assume you have a 12-week project with employees working a 10-hour day, five days a week. There are two national holidays during this period when your employees will not work. There are five employees on the job.
Multiply the five-day workweek by 12 weeks: 12 * 5 = 60. Subtract the two holidays for 58 days. Multiply the number of workdays by 10 hours per day: 58 * 10 = 580 (these are the project hours per employee).
Multiply the per-employee man-hours by the number of employees on the job: 580 * 5 = 2,900. There are 2,900 total man-hours assigned to this project.