I recently read a discussion about using National Electrical Contractors Association (NECA) labor units. People had differing opinions as to when and how they should be used. There were also a few opinions on who performed electrical work faster.
Let’s make this clear: There is no simple answer to the questions of which labor units to use and who is faster. Period. The proper application and adjusting of labor units depends on dozens of factors and is the most difficult part of estimating. Labor factoring is often said to be the “art” in the art of estimating. Before we get to the many factors, let’s cover labor units and columns.
I have been exposed to quite a few collections of labor units during my career, including six different estimating systems, four employers’ in-house labor units, and the NECA Manual of Labor Units (MLU).
If you intend to use the NECA MLU, it is important to actually read and understand the introduction in the beginning of the manual. There is also important information in the front of each section. The manual is organized into three labor columns, labeled “Normal,” “Difficult” and “Very Difficult.” The manual includes a Labor Factor Score Sheet, which can be used to select the labor column for your project. Remember when I wrote there are dozens of factors? There are more than 30 factors in this list alone.
For those that don’t know, a labor factor is something that affects how long it takes to complete an installation. A common factor is height. It takes a lot longer to install something 50 feet up, compared to installing it when you’re standing on the floor. Within the score sheet, you will give each labor condition a score between 1 and 5. The labor column you use will be selected based on the total score. If you use the score sheet often, you may want to turn it into an electronic spreadsheet, so you can automate the math. As exacting as this process is, there are many reasons why labor hours may be adjusted. There is another reason to modify the results dictated by the Labor Factor Score Sheet: productivity.
Most electrical estimating programs have a labor column that is more competitive than those in the MLU. I have observed that the competitive labor in the estimating programs is very similar to those my earliest employers used in their manual estimating systems. Many of the electrical estimating programs also have three more labor columns that approximate the NECA columns. Some systems provide extra columns where you can input your own or your company’s labor units. As you can see, there are many labor units to choose from. It can be quite confusing.
I will try to simplify it, but first, let’s cover how fast an electrician makes installations, also known as productivity. The labor units in the MLU are created for a journeyman with average productivity. First, when it comes to productivity, training is only part of the picture. Yes, training is very important. However, motivation is just as important. I’ll take a highly motivated, partially trained candidate over a slothful, fully trained electrician every time. Motivation isn’t just about individuals. The working climate created by a company and the company’s supervision plays a big part in how productive their field personnel can be. A demoralized crew is simply not going to work hard.
Poor project management is another productivity killer. Your field cannot do their best without timely delivery of tools, material and information. That said, every labor pool will have a large variety of electricians. Some will be more desirable than others, for reasons including productivity, skill set and personality traits.
OK, it’s time to simplify picking which labor units to use. I begin by stating, with one exception, all of my employers used the competitive labor units that came with an electrical estimating program. The one exception used NECA MLU but then discounted it. Now, this is important—the competitive labor units worked with our available labor pool. They may not work with the available labor and conditions in your area. I currently have customers that regularly bid work using NECA columns 1, 2 and sometimes 3. You must know how productive your men and women are before using the most competitive of labor units.
My earlier employers rarely factored labor, because most projects we bid on were what is defined as normal conditions. There were no reasons to raise the labor. As my career progressed, I got into more complex projects, and had to start thinking about factoring labor. Now, adjusting labor for various factors is required on many of the projects I estimate.