Labor Productivity Analysis

Document Type: Guide
Version: 1.0
Last Updated: February 2026
Distribute To: CFO, Controller, Operations Manager, Project Managers

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Purpose

Establish procedures for measuring, analyzing, and improving labor productivity to enhance profitability, improve estimates, and optimize workforce management.

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Why Labor Productivity Matters

Construction Labor Reality:

• Labor typically 30-50% of project cost
• Small productivity changes = big profit impact
• Productivity varies widely (up to 50% between crews)
• Measurement enables improvement

Impact Example:

10% productivity improvement on $1M labor budget:
= $100,000 savings
= Direct contribution to profit
= Often makes difference between profit and loss

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Productivity Metrics

Basic Productivity Formula:

Productivity = Output ÷ Input

Construction examples:
- Linear feet of pipe per hour
- Square feet of drywall per hour  
- Cubic yards of concrete per hour
- Units installed per hour

Key Metrics:

Metric	Formula	Use
Labor Factor	Actual Hours ÷ Budget Hours	Overall efficiency
Unit Rate	Hours ÷ Units Installed	Specific activity
Cost per Unit	Labor $ ÷ Units Installed	Cost tracking
Revenue per Hour	Revenue ÷ Labor Hours	Company-wide

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Measuring Productivity

Daily Production Report:

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         DAILY PRODUCTION REPORT
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Project: _______________________  Date: _______________
Foreman/Super: _______________________

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LABOR:

| Employee | Classification | Hours | Cost Code |
|----------|----------------|-------|-----------|
|          |                |       |           |
|          |                |       |           |
|          |                |       |           |

Total crew size: _____
Total hours: _____

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PRODUCTION:

| Activity | Cost Code | Units | Unit Type | Hours |
|----------|-----------|-------|-----------|-------|
|          |           |       |           |       |
|          |           |       |           |       |

Productivity: _____ units/hour

Budget productivity: _____ units/hour

Performance: _____% of budget

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CONDITIONS:

Weather: ☐ Normal  ☐ Hot  ☐ Cold  ☐ Rain  ☐ Wind
Site access: ☐ Good  ☐ Limited  ☐ Poor
Material availability: ☐ Good  ☐ Some delays  ☐ Waiting
Equipment availability: ☐ Good  ☐ Issues: _________________
Coordination with others: ☐ Good  ☐ Conflicts

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ISSUES/DELAYS:

| Issue | Hours Lost | Impact |
|-------|------------|--------|
|       |            |        |

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TOMORROW'S PLAN:

Activity: _______________________
Target production: _______________________
Resources needed: _______________________

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Weekly Productivity Summary:

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         WEEKLY PRODUCTIVITY SUMMARY
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Project: _______________________  Week Ending: _______________

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LABOR SUMMARY:

| Cost Code | Description | Budget | Actual | Variance | % |
|-----------|-------------|--------|--------|----------|---|
|           |             |        |        |          |   |
|           |             |        |        |          |   |
| TOTAL     |             |        |        |          |   |

Overall labor factor: _____
  over 1.0 = Using more hours than budget (inefficient)
  under 1.0 = Using fewer hours than budget (efficient)

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PRODUCTION BY ACTIVITY:

| Activity | Units | Hours | Unit/Hr | Budget | % Budget |
|----------|-------|-------|---------|--------|----------|
|          |       |       |         |        |          |

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PRODUCTIVITY TREND:

| Week | Labor Factor | Best Day | Worst Day |
|------|--------------|----------|-----------|
| -4   |              |          |           |
| -3   |              |          |           |
| -2   |              |          |           |
| -1   |              |          |           |
| This |              |          |           |

Trend: ☐ Improving  ☐ Stable  ☐ Declining

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Productivity Analysis

Labor Factor Analysis:

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         LABOR FACTOR ANALYSIS
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Project: _______________________  Through: _______________

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BY COST CODE:

| Cost Code | Description | Budget Hrs | Actual Hrs | Factor |
|-----------|-------------|------------|------------|--------|
|           |             |            |            |        |
|           |             |            |            |        |
| PROJECT   |             |            |            |        |

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BEST PERFORMING (Factor < 0.95):

| Cost Code | Factor | Reason for Good Performance |
|-----------|--------|----------------------------|
|           |        |                            |

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WORST PERFORMING (Factor > 1.05):

| Cost Code | Factor | Reason | Corrective Action |
|-----------|--------|--------|-------------------|
|           |        |        |                   |

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ROOT CAUSE ANALYSIS:

High labor factors typically caused by:
☐ Estimating error (budget too low)
☐ Scope creep (more work than estimated)
☐ Rework/quality issues
☐ Material/equipment delays
☐ Crew inexperience
☐ Supervision gaps
☐ Site conditions
☐ Weather impacts
☐ Coordination issues
☐ Other: _______________________________

Action plan:
___________________________________________________________

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Productivity by Crew:

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         CREW PRODUCTIVITY COMPARISON
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Project: _______________________  Activity: _______________

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| Crew/Foreman | Hours | Units | Productivity | % of Best |
|--------------|-------|-------|--------------|-----------|
| Crew A       |       |       |              |           |
| Crew B       |       |       |              |           |
| Crew C       |       |       |              |           |
| AVERAGE      |       |       |              |           |

Best crew: _______________________
Gap from best to worst: _____% 

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ANALYSIS:

What makes the best crew more productive?
☐ Experience level
☐ Crew composition
☐ Leadership/supervision
☐ Planning/organization
☐ Tool/equipment management
☐ Work habits
☐ Other: _______________________________

Improvement opportunity if all crews matched best:
  Hours saved: _____
  Dollar savings: $_________________

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Productivity Factors

Factors Affecting Productivity:

Factor	Impact Range	Controllable?
Crew experience	±30%	Partially
Supervision quality	±25%	Yes
Planning/scheduling	±20%	Yes
Material availability	±20%	Yes
Tool/equipment	±15%	Yes
Weather	±15%	No
Site conditions	±15%	Partially
Overtime fatigue	-10-25%	Yes
Learning curve	-20% initial	Expected
Rework	-5-15%	Yes

Adjustment Factors:

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         PRODUCTIVITY ADJUSTMENT FACTORS
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Standard productivity rate: _____ units/hour

ADJUSTMENT FOR CONDITIONS:

| Condition | Factor | Adjusted Rate |
|-----------|--------|---------------|
| Overtime (over 40 hrs/wk) | 0.90 | |
| Overtime (over 50 hrs/wk) | 0.80 | |
| Hot weather (over 95°F) | 0.85 | |
| Cold weather (under 32°F) | 0.85 | |
| Confined space | 0.75 | |
| Heights (over 30 ft) | 0.85 | |
| Occupied building | 0.85 | |
| Remote location | 0.90 | |
| Night shift | 0.90 | |
| New crew/learning | 0.75 | |

Applied adjustment: _____
Adjusted productivity: _____ units/hour

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Improving Productivity

Productivity Improvement Plan:

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         PRODUCTIVITY IMPROVEMENT PLAN
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Project: _______________________  Prepared: _______________

Current overall labor factor: _____
Target labor factor: _____
Improvement needed: _____% 

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IMPROVEMENT INITIATIVES:

1. PLANNING & SCHEDULING:
   ☐ Detailed daily work plans
   ☐ Look-ahead scheduling
   ☐ Pre-task briefings
   Expected impact: _____% improvement

2. MATERIAL MANAGEMENT:
   ☐ Material staged before work
   ☐ Just-in-time delivery
   ☐ Kitting/pre-assembly
   Expected impact: _____% improvement

3. TOOL & EQUIPMENT:
   ☐ Right tools available
   ☐ Equipment maintained
   ☐ Specialized tools where needed
   Expected impact: _____% improvement

4. CREW OPTIMIZATION:
   ☐ Right crew size
   ☐ Skill matching to work
   ☐ Consistent crew assignments
   Expected impact: _____% improvement

5. SUPERVISION:
   ☐ Adequate span of control
   ☐ Clear expectations
   ☐ Regular feedback
   Expected impact: _____% improvement

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IMPLEMENTATION:

| Initiative | Owner | Start Date | Target Improvement |
|------------|-------|------------|-------------------|
|            |       |            |                   |

Measurement: Weekly labor factor tracking
Review: Weekly PM review

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Quick Productivity Wins:

Action	Typical Impact	Implementation
Start on time	3-5%	Enforce start times
Reduce travel time	2-4%	Stage materials nearby
Pre-task planning	5-10%	Morning briefings
Tool organization	2-3%	Job boxes, shadow boards
Material staging	5-8%	Night/early delivery
Reduce rework	5-10%	Quality checks
Minimize overtime	5-15%	Better planning

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Estimating Feedback

Productivity Database Update:

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         PRODUCTIVITY DATA UPDATE
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Activity: _______________________
Project: _______________________

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HISTORICAL DATA:

| Project | Year | Units | Hours | Productivity | Conditions |
|---------|------|-------|-------|--------------|------------|
|         |      |       |       |              |            |
|         |      |       |       |              |            |
|         |      |       |       |              |            |

Historical average: _____ units/hour
Standard deviation: _____

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THIS PROJECT:

Units: _____
Hours: _____
Productivity: _____ units/hour

Conditions: _______________________

Variance from average: _____% 

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DATABASE UPDATE:

☐ Update estimating database
☐ Update crew planning
☐ Document lessons learned

New recommended rate: _____ units/hour

Approved by: _______________________

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Reporting

Monthly Productivity Report:

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         MONTHLY PRODUCTIVITY REPORT
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Month: _______________

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COMPANY SUMMARY:

Revenue: $_________________
Total labor hours: _____
Revenue per labor hour: $_____
Target: $_____
Variance: $_____

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BY PROJECT:

| Project | Labor Factor | This Month | YTD | Trend |
|---------|--------------|------------|-----|-------|
|         |              |            |     | ↑↓→   |
|         |              |            |     | ↑↓→   |
| AVERAGE |              |            |     |       |

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TOP PERFORMERS:

| Project | Labor Factor | Key Success Factors |
|---------|--------------|---------------------|
|         |              |                     |

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NEEDS IMPROVEMENT:

| Project | Labor Factor | Issues | Action Plan |
|---------|--------------|--------|-------------|
|         |              |        |             |

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PRODUCTIVITY INITIATIVES:

| Initiative | Status | Measured Impact |
|------------|--------|-----------------|
|            |        |                 |

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Software Integration

BLDR Time Integration:

• Real-time labor hour capture
• GPS verification of on-site time
• Cost code allocation
• Automatic productivity calculation
• Dashboard visibility

Benefits:

• Accurate data
• Less administrative burden
• Real-time visibility
• Trend analysis
• Crew comparisons

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Related Documents

• Job Costing Procedures
• Time Tracking Procedures
• Estimating Standards
• Cost Control Procedures

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Template provided by support.construction. Productivity is the hidden profit driver—measure it, manage it, improve it.