Labor costs in construction cannot be taken lightly since they are one of the major expenses in the entire budget. One of the reasons is that a construction project cannot be executed without these people. There are different types of labor working on a project, and they perform different tasks. Some are general laborers who are mostly doing the physical work. And others are professionals in their fields, such as an electrician. This article will discuss the importance of these people and help you learn some basics of estimating labor costs. 

Why Labor Costs Matter?

If you were thinking that labor is just the ones who are doing heavy weight lifting and physical work on the site, you are half wrong. When labor is mentioned in construction, all of these are referred to:

• General labor

• Electricians 

• Welders

• Plumbers

• Masons

• Machinery operators 

This list mentions a few of them who are present on a site. Every member of the project is doing a different and important job. They are paid differently by different contractors. For example, they can get a daily wage or maybe after some part of the project is done. It depends on the contractor or the choice of the majority of laborers.

What if the Budget is not planned?

If the budget for labor is not properly planned, certain issues can occur during the construction. It is better to look into them during the planning phase. Look at these issues:

• Due to a shortage of funds, the contractor has reduced the number of workers. 

• Fewer workers means the work quality is affected.

• Laborers have refused to do any further work due to late wages. 

• The labor is overestimated, and funds are being wasted. 

This is exactly why contractors get services from a construction estimating company to deal with costing. They calculate the cost of the entire project, along with labor costs. They help the contractor divide labor costs across different stages in the project. They divide the cost according to different types of labor and for different stages. 

Estimation of Labor Costs

Although cost estimating companies use software for this process, if you want to do it manually, here are the steps to calculate the average cost. 

1. Listing Tasks:

Before calculating the cost, a list of tasks is made. So you make a detailed list of everything that is going to cost you money during construction.

2. Estimating Hours

Next, you need to list down the time each task will take. For example, the foundation can take 1 week. You need to know how many people are needed to make this happen and in what time. How many hours in a day will they take? 

3. Calculating Wages

When the hours are estimated, it is multiplied by the hourly wage. Different trade workers are paid differently. General labor has lower pay than a skilled professional. 

4. Adding Overheads

Labor costs do not only include the wages they are being paid. It also includes the cost of safety gear and transportation. Sometimes their meals are also covered. But it depends on the project.

5. Adding Contingencies

It is almost impossible to keep the project within budget. Certain situations, such as project delay due to weather, and then labor doing extra hours. The laborers have to be paid for their overtime. This is why at least ten or fifteen percent of the total labor cost should be kept aside in the name of a contingency fund.

A cost estimating firm can also help in calculating and managing the budget. But their scope is wider compared to a company that specifically works in construction. But it does not mean that they are not suitable for your task. If your construction project is large, then they will be more suitable for your project. 

 Factors Affecting Labor Costs

1. If the project is small, the cost can be low, but sometimes, even with a small piece of land, the cost can be high. This happens when there are more floors in the building. 

2. Sometimes the cost depends on the area where the land is. Urban areas are expensive as compared to rural ones.

3. Long projects cost more because labor costs keep being a large part of the total budget.

Conclusion

Hiring skilled labor is not an expense, but it is an investment that you make in your project. It is important to understand that labor can make or break your project. Faulty work is not going to help you if your aim is to build a house that has a long life. You can find an average cost by following the above directions. But this task is pretty detail-oriented, so hiring a professional can be better.