Labour productivity measures an industry’s ability to produce goods or services, usually expressed as output per hour worked. The productivity levels are broken down into productivity per worker and productivity per hour worked. Productivity analysis is a productivity analysis that studies the productivity of a particular person, company, or industry.

Productivity analysis is very common in the construction industry as productivity levels affect how much a company can produce within a given amount of time. Productivity measures in the construction industry show up as outputs per hour worked and productivity per worker. Productivity analysis studies an individual’s productivity to help businesses reduce the average cost and see higher productivity outcomes.

Companies use productivity data to set targets for workers, which helps develop a strong workforce that can meet goals. The need for productivity measurement arises from the nature of the construction business, where significant amounts of capital have been invested in equipment and materials used on each job site over relatively long work periods. To compensate for this high investment, productivity must be efficiently increased during those periods so as not to lose profits due to idle capital.

Construction productivity is an essential subject as productivity is directly related to profitability and competitive advantage in the construction industry. Construction productivity measures how many person-hours (or machine hours) it takes to complete a unit or group of units, usually expressed per hour worked or per worker. It can be defined as productivity per person, per hour worked, or volume production.

The productivity measures are broken down into productivity per worker and productivity per hour worked. Loss of productivity often happens because workers do not work at their maximum capacity. If companies can track individual productivity rates, they can make adjustments to improve productivity levels and increase profit margins by reducing unnecessary costs such as labour costs and idle equipment time through training and supervision improvement programs for workers.

There are several labour efficiency measurement tools used in construction projects to measure productivity levels, including basic labour productivity measures, key performance indicators (KPI), and productivity-based management systems. These productivity measures for individuals or groups of workers are then recorded. These are usually assigned to one worker at a time but can also be measured by totalling productivity reports for a certain period of time.

The productivity measures are analyzed to determine productivity losses due to idle time, absenteeism, injuries, and worker turnover. The productivity analysis can also provide information about the company’s production output by productivity type so that managers can continuously improve productivity levels.

Several factors can impact the productivity levels of construction workers. These productivity factors include human factors, external factors, and management factors.

Human productivity has the most significant influence on construction project productivity and is measured based on the amount of productivity each individual contributes to a project or company. The productivity factor for individuals usually depends on the worker’s skill level and experience, but it could also depend on environmental conditions.

External productivity factors are productivity challenges that are beyond the control of workers, such as inclement weather conditions, lack of machinery or equipment, and poor road conditions.

Management productivity factors refer to productivity issues caused by ineffective management techniques. These productivity factors include inefficient work methods, inadequate tools, and scheduling problems.

There are two types of labour productivity: total factor and labour. Total factor productivity consists of the combined inputs such as labour, materials, resources, and equipment used by a business to complete a unit or group of units during a given production time frame.

Total labour productivity, the most common method used to measure construction labour productivity, measures labour input based on the number of workers employed with the number of hours worked. Let’s break them down through a simple formula.

Total Factor: Let’s say that the expectation of moving steel bars from the loading area to the construction site proper is at 300 steel bars in 8 working hours time. 12 workers are accomplishing the task. The formula for total factor productivity is:

Total Factor Productivity= 300 steel bars/(12×8)=3.13 steel bars moved per labour hour

On the other hand, if the only factor for consideration is the expected working hours among the 12 workers on the team, then the computation is simply:

Total labour productivity: 12 workers x 8 hours = 96 labour hours per day

Generally, the total factor productivity allows project managers and team leads to estimate how long a given task should take with the number of works available in relation to the task to be accomplished.

Labour productivity estimates the potential average time each worker will give and helps estimate wages. Computing for labour productivity also tells project managers the estimated number of employees they need if a particular task must be completed in a set time. In that case, simply change the number of workers to increase the number of steel bars moved per given working hour.

Computing for labour productivity goes beyond calculating the number of workers and their respective wages per diem. It also assists project leads, and managers plan their site layout and allocating the time required. With that, general terms and expectations are established in the contract, such as employment needs, contractor requirements, machinery, and technology required, and the skills workers should possess.

Monitoring the productivity of how much the labourers worked in a given timeframe proves to have practical importance in ensuring construction projects do not delay or overspend. The goal is to see substantial savings in both monetary and timely aspects. Keep in mind that more materials and a larger workforce do not necessarily translate to better productivity. In some cases, this can actually lead to more problems such as cost overruns.

The main goal of productivity analysis is to properly allocate resources where they will have the most significant impact on project completion. Meaning, a construction project can have a huge workforce, but if each worker does not put in the expected effort, the project is still likely to fail. With that in mind, it is important to account for measures that monitor labour productivity. Here are five methods in monitoring labour productivity.

A common way project planners and managers set productivity baselines and expectations is to compare them with similar past projects. Projects in the same industry, of the same size, with identical labour requirements, are often used to make projections. You can also use this method when summarizing labour productivity to estimate tasks that the project might require.

Labour productivity is also monitored in relation to the stipulations of the contract agreed upon by the contractor and client. Often, labour stipulations will be considered regarding labour wages per day or labour hours per project completion as a measurement for labour productivity. By monitoring labour productivity related to wage-related labour metrics.

Project planners and managers can also use labour productivity measures with labour standards set by local contractor licensing boards. These labour standards typically target foreseeing labour costs, wages per diem, hours worked per day, etc.

By monitoring labour productivity, project planners and managers can also use labour productivity measures concerning the labour costs employed for similar tasks or projects completed in the past. With that, it is important to consider labour cost inflation when using past labour costs as a basis.

In addition to setting baselines and expectations from similar projects, you can also monitor labour productivity by implementing labour metrics based on completed tasks. Gathering sufficient data in regards to labour productivity can help estimate how long it will take to complete tasks and how many labourers should dedicate their time to that task. It is important to note that labour productivity measures should only be used when related labour costs for the tasks in consideration are relatively similar and can be accurately estimated.

Understanding construction project labour productivity is crucial as it enables comparisons between projects and allows for labour costs associated with tasks to be estimated. Resources such as labour hours and labour wages can be used as a basis to improve labour productivity relative to construction resources. With that, monitoring labour productivity is improved when labour is monitored in relation to the labour resources available during a given project.

It is important to note labour productivity measurements should only be used as a basis for labour resource estimation when labour costs are relatively similar from one task to another. When labour costs vary significantly, other measures such as labour hours or labour rates would be more appropriate as a metric for labour productivity relative to construction resources. In addition, it is also essential to take into account labour costs related to labour inflation when using labour productivity measures as a basis for labour resource estimation.