What is the best method to monitor labor costs on a job?

Monitoring labor costs effectively is crucial for maintaining budget control on a project. The most reliable method involves figuring the hours from detailed time cards. This approach provides an accurate record of the actual hours worked by each employee on a job, allowing for precise calculation of labor costs.

Detailed time cards capture the specific hours worked, including start and end times, breaks, and additional overtime, which leads to a clear understanding of where labor resources are allocated. By tracking hours meticulously, contractors can evaluate productivity, identify any labor inefficiencies, and make necessary adjustments in real time, ultimately supporting better financial management.

In contrast, estimating labor costs based on previous jobs may not account for variations in project requirements, workforce efficiency, or changes in wage rates. While employee satisfaction surveys can provide insights into team morale, they do not yield direct data about labor costs. Using a flat rate for labor costs also lacks the granularity needed for precise cost tracking, potentially leading to inaccuracies if the actual hours worked change significantly from the initial estimate.