Question

What can a project manager do to enable the reporting of the labor charges accurately?

Why does a project manager need to collect Actual costs?

Answer 1

Labor cost is wages or payment which is related to the manufacturing of product. Labor charges are depend on the Task assigned, risk, Efficiency, location etc. Labor cost is important factor of the total cost of production. pay is calculated as per the work performed in the project.

As the labor charges or cost is the part of total production cost so it is important to calculate it correctly. Project manager can track the timing and hours workers are spending on the manufacturing of products. Different equipment can be used to mark the attendence or in and out time of the worker. Project manager can appoint the team of supervisor to monitor workers break and leaves. This will help to know the actual working hours. The pay or wages of each and every worker is depend on the skillset, area of expertise, risk factor, responsiblity assigned. Project manager can calculate the exact labor charges by employees labor cost per hour plus gross wages including taxes.

Project manager need to collect actual cost so that he can calculate correct total cost. The profit percentage of an organisation is depend on the total sales less the total cost. If total cost calculates incorrectly, it will affect the profit margin also. Another point is, calculating labor cost correctly, will help workers to get their wages correctly as per the working hours they performed. This will help to avoid injustice among the workers and improve the employee satisfaction.