Calculating Loss of Productivity Due to Overtime

Using Published Charts – Fact or Fiction

By Regula Brunies, FPMI, CCC, CQS and Zey Emir, P.Eng, MBA

Revay and Associates Limited

INTRODUCTION

In simple terms, productivity is defined as the measure of output

(the work produced in units) per unit of input (hours required or

cost incurred). Other frequently used productivity measurements

include:

$ revenues $ revenues hours earned ——————— ——————— ——————— hours worked $ actual cost hours worked

The most convincing method of measuring loss of productivity is

undoubtedly the “measured mile” approach. It compares productivity achieved during unimpacted periods or “normal periods” with the productivity achieved during periods affected by

the causes alleged. It is based on actual data and inherently

accounts for contractor inefficiencies and/or estimating errors.

The damages are calculated based on the difference in productivity rates.

Unfortunately this method is of no help if:

1. the required data for a detailed productivity analysis are not

available or are unreliable;

2. several causes contributed to the productivity loss, but only

one cause is compensable;

3. the productivity loss has to be included in a change order

quantification prior to the execution of the change (forward

costing).

Short of “guesstimating”, the only alternate method for quantifying a distinct productivity loss may be the use of published studies for the cause in question, but not without the greatest caution.

Contractors and their claims consultants often rely on studies

which have very little to do with the specific situation under

scrutiny. In fact, they may have never examined the actual study

and simply relied on a single chart reproduced in a book or by a

trade association.

This article examines the numerous studies available for loss of

productivity due to overtime. The objective is to inform the user

of their often limited application and the pitfalls of erroneous

application.

LOSS OF PRODUCTIVITY DUE TO OVERTIME

Overtime in construction is usually defined as work performed

over 40 hours per week, or in some instances, more than eight

hours in one day.

The most cited factor affecting productivity during scheduled

overtime is physical and mental fatigue. Other factors which may

contribute to a productivity loss include:

• absenteeism, accidents;

• reduced supervision effectiveness;

• shortage of materials, consumables or tools due to accelerated pace; and

• tardy processing of engineering questions and requests for

clarifications due to greater demand within a given period.

Whenever loss of productivity due to overtime is quantified, the

surrounding circumstances must be clearly understood.

Bureau of Labor Statistics

The oldest study on overtime, widely cited as a reliable source,

dates back to the 1940s. This study by the Bureau of Labour Statistics of the U.S. Army Department of Labor (BLS) is based on 78

individual cases covering 2,455 men and 1,060 women working in

a wide variety of manufacturing industries with the work being

mostly highly repetitive, machine paced, performed indoors and

requiring little decision making. Moreover, this work was performed by incentive wage employees during wartime, on prolonged overtime schedules. According to the BLS study, average

productivity for 50-hour, 60-hour and 70-hour weeks were 92%,

82% and 78% respectively. 

Notwithstanding the fact that this study was limited to the manufacturing sector, the Mechanical Contractors Association of America (MCAA) relied on these BLS data when it issued its Bulletins

no. 18A and 20 in 1968, to assist contractors in the preparation of

claims and change orders relative to loss of productivity due to

overtime. In 1994 the MCAA, in its M3 publication entitled

“Change Orders, Overtime and Productivity”, still included the

same BLS information as a reliable source to prove overtime inefficiency. Since the BLS data were gathered in a very specific environment in the manufacturing sector, the BLS results and the

MCAA charts are of little use for quantifying loss of productivity

in construction.

Foster Wheeler

L.V. O’Connor, Director of Construction of the Foster Wheeler Corporation published a paper in 1969 entitled “Overcoming the

problems of Construction Scheduling on Large Central Station

The Revay Report

Volume 20 Published by Construction Consultants

Number 3 Revay and Associates and

November 2001 Limited Claims Specialists
Boilers”. The paper describes Foster Wheeler’s research conducted from 1963 to 1968. Figure 1 shows Foster Wheeler’s overtime

inefficiency curves derived from its own data. The paper does not

disclose how and under what circumstances the data were

obtained. Although not explicitly stated, it is presumed that the

findings are based on the boilermaker trade. Average productivity for 5-10 hour days and 6-10 hour days were 87% and 73%

respectively.

Figures 3a and 3b reflect the ratios of productive return to overtime hours for long-term job schedules of overtime operations:

the curves reflect the average and the range of expected performance. It is important to note that after several weeks of overtime,

the reduced labour productivity reaches the point of no return. The

study also suggests that a 45-hour job schedule very quickly

becomes nothing more than wage inflation. It is important to note

that the effect of reduced labour productivity reaches the point of

no productive returns on overtime hours, earlier for a 50 hour

schedule than for a 60 hour schedule. However, the inflated cost

per hour of productivity effect is greater for the 60 hour schedule.

The study contains the following warning:

“The industrial firm’s data on productivity is based on Fixed Standards, and a performance of 1.0 may not be the same as a performance of 1.0 referenced to some other standard of

comparison. As a result, a 30% reduction of productivity in one

set of data could compare with a 15% reduction reflected in

another set of data due to these differences.”

In 1973, the American Association of Cost Engineers (AACE) published a report on the “Effects of Scheduled Overtime on Construction Projects” where it relied on the BRT data. Similarly,

“The Owner’s Guide to Overtime, Construction Costs and Productivity”, published in 1979 by the Associated General Contractors, the American Subcontractors Association and the

Figure 2

2

Figure 1

Proctor & Gamble

The Business Roundtable (BRT) issued a task force report in 1980

entitled “Scheduled Overtime Effect on Construction Projects”

which was an update of their 1974 report entitled “Effect of Scheduled Overtime on Construction Projects”. The original data relied

upon were actual project records derived from a series of short

jobs over a 10-year period in the 1960s and originated from a single project, namely the Proctor & Gamble Green Bay, Wisconsin

process plant. The output was recorded from physical count or

measurement, the input was based on actual payroll hours. It is

reported that the work was carried out in a tranquil labour climate

with excellent field management. The nature of the construction

activities and the trades involved are unknown.

Figure 2 depicts the cumulative effect of overtime on productivity for 50- and 60-hour work weeks as per the BRT Study. The

measure of productivity is a comparison of actual work hours

expended for preplanned operations with a fixed standard base

of calculated work hour requirements called a “bogey”. The

“bogey” standard is for a straight-time schedule. The data are not

a comparison of actual straight time with actual overtime productivity.

Figure 3b

Figure 3a
Associated Specialty Contractors relied on the same BRT data.

Finally, the 1994 MCAA publication includes the same BRT data

as proof of the relationship between overtime and the increasing

ratio of inefficiency during consecutive overtime periods. Thus, all

three publications contain no original data and the limitations of

the BRT Study are equally applicable.

Construction Industry Institute

In 1988, the Construction Industry Institute (CII) published Source

Document 43 on “The Effects of Scheduled Overtime and Shift

Schedule on Construction Craft Productivity.”

This study contains original data collected between 1984 and 1988

from seven different U.S. heavy industrial projects at various

stages of completion, including oil refineries, natural gas recovery

plants, a fossil power plant and a chemical processing unit. The

focus of the data is on crew performance. Trades involved are primarily electricians, pipefitters and insulators. Two projects include

data for concrete crews (labourers) and one project includes formwork and rebar crews (carpenters and ironworkers). Only two projects include data on straight-time as well as on overtime

schedules. On the chemical processing unit all tradesmen worked

on a rolling 4-10 hour day schedule (two days off); three crews

were shifted such that at least two crews were on site every day.

Figures 4a to 4d depict the results for selected crews.

Figures 5a and 5b show the curves produced for average normalized productivity against time for various combinations of

overtime schedules. They were generated to illustrate overall

results of the study.

Based on the inconsistent patterns, no defensible conclusions

could be developed with respect to overtime inefficiency. Thus it

is not surprising that the study concludes with the following

statements:

“1.Previous studies by BLS, the Business Roundtable and others

are not consistent predictors of productivity loss during overtime schedules for construction projects in this study.

2. Even on the same project working an overtime schedule, productivity trends of individual crews are not consistent.

3. Productivity does not necessarily decrease with an overtime

schedule.

4. Absenteeism and accidents do not necessarily increase under

overtime conditions.”

In 1994, the Construction Industry Institute (CII) issued Source

Document 98 on “Effects of Scheduled Overtime on Labour Productivity: A Quantitative Analysis”, the most comprehensive

report since the BRT report (1974; 1980). It is based on 151 weeks

of data collected from 1989 to 1992 from four active industrial

construction projects (papermill, manufacturing, process plant,

refinery) without major contract disputes. Each was constructed

in a tranquil environment and was well managed. The overtime

schedule was used to maintain the schedule, not to attract labour.

The manufacturing and papermill projects were existing facilities

where old systems and equipment were removed and replaced

with new ones. Congestion was a major concern. The refinery

involved the rebuilding of an existing facility. The process plant

was a spacious, outdoor, grass-roots facility. 

The focus of the study was on detailed observation of piping and

electrical crews, rather than on various trades. The rationale that

only piping and electrical trades were studied is that these trades

represented the majority of the work and were most likely to be

3

Figure 4a Figure 4b

Figure 4c Figure 4d
affected by scheduled overtime. For electricians, the work

involved the installation of conduit, cable and wire, terminations

and splices, and junction boxes. For piping, work included pipe

erection and the installation of supports and valves. The performance of a crew on an overtime schedule was compared to the

same crew on a straight-time schedule. There were not data for

5-8 hour days. Therefore a 4-10 hour day schedule was used as

the baseline. Work weeks shorter than four days usually were

shortened because of weather. There was one 7-day work week

which was discarded. Over 90% of the work days were 10-hour

days. The study specifically excluded the early phase of the work

and the start-up phase.

Figure 6 shows the overtime efficiency (3-4 week duration) as a

function of the number of days worked per week. It is obvious

that 2- and 3-day work weeks were significantly less efficient than

the normal 4-day work week, probably because of the effects of

adverse weather. The loss of efficiency for the 5- and 6-day work

week was in the range of 10 to 15 percent with very little difference between the 5- and 6-day work week.

The remaining analyses contained in this study were an effort to

support the initial determination that there are productivity losses when working overtime. Figures 7a and 7b show the efficiency trends for 50-hour and 60-hour weeks as a function of time

compared to the curves from the 1980 Business Roundtable

Study. All curves except the BRT curves were normalized about

the first week of overtime for better visualization of trends. It is

evident that some crews follow the general downward trend

established in the BRT Study, while others do not.

Figure 6

4

Figure 5a

Figure 5b

Figure 8 shows the average overtime efficiency of all crews working a 50-hour work week, the BRT curve and other references.The

study concluded that the data are consistent with the BRT curve

and that the BRT curve is probably a good representation of the

industry average but individual work may vary appreciably.

Moreover, the study showed that it was possible to work overtime for three to four weeks without losses of productivity which

would be consistent with the 1988 CII study.

In the final conclusion, the study states:

• “The use of short-term overtime can cause a loss of labour

efficiency. The average loss was in the range of 15%. When

losses were analyzed as a function of time, the averages were

consistent with the Business Roundtable curve. However,

overtime losses are not automatic but can range from none to

25% for crews (projects) where there are no other factors

affecting productivity. Examples of factors that can cause losses greater than 15% are incomplete design, numerous

changes, work in an operating environment or labour unrest.

• As overtime efficiency decreases, the research found that

there was an increase in disruptions. The most consistent

increase occurred in the category of resource availability. It is

Figure 7b

Figure 7a
concluded that this increased difficulty in providing resources

is the root cause of losses of efficiency.

• The data collection and analysis methodologies are a sound,

reliable way to measure the effects of scheduled overtime. The

basis for this conclusion is that the results of the analysis are

consistent and in line with what would be reasonable.”

[emphasis added]

Needless to say, the rather vague quantitative conclusions render

their application to a loss of productivity calculation highly questionable. However, this study could be construed as a validation

of the BRT curves (in spite of the warning expressed in the BRT

study) and the apparent contradiction of the CII 1988 conclusions.

National Electrical Contractors Association

The National Electrical Contractors Association (NECA) published

several studies on overtime.

In a 1962 survey, 289 members replied to four questions concerning overtime on a sporadic, short-duration basis and two

questions concerning continuous overtime over several successive weeks. This is an extremely small sample considering that

NECA has thousands of members. The responses yielded the following average values of productivity.

NECA concluded that the observations were close enough to give

substantial confidence in the applicability of BLS values to electrical contracting which provided a more complete coverage.

Notwithstanding NECA’s conclusion, it must be reiterated that on

one hand the BLS data were collected under very specific conditions in the manufacturing sector and on the other hand NECA

data were nothing more than a limited survey, i.e. subjective data

which cannot be verified. At best, the coincidental similarity of

questionable data can be considered a general indicator.

In 1969, NECA published “Overtime and Productivity in Electrical

Construction”, a study conducted by the NECA Southeastern

Michigan Chapter. Data are from jobs worked during 1964, presumably for electricians. The origin of the data and the work environment are unknown. Figure 9 shows the decline of productivity

over periods of one to four successive weeks. What happens

beyond is, as indicated, a question mark. What is striking about

the four weeks of data is that weeks 2, 3 and 4 are multipliers of

1.5, 2.0 and 2.5 respectively of the first week data. This raises

some serious concerns with respect to the originality of the data.

The findings for the number of work hours per day and the number of work days per week are depicted in Figures 10a and 10b.

They are consistent with expectations.

In 1989, NECA published a second edition of “Overtime and Productivity in Electrical Construction”.

The study provides information on low, average and high productivity loss for 5-, 6- and 7-day work weeks and 9, 10 and 12

hours per day for sixteen successive work weeks, based on data

gathered by NECA since 1969 for journeymen electricians. The

origin of the data and the work environment are unknown. Figure

11 summarizes the data for average productivity for successive

weeks of overtime.

Miscellaneous Studies

In 1969 James Howerton published statistics on an overtime

study conducted in 1964. The project, its location and the trades

involved are unknown. Figure 12 shows productivity as a function of successive weeks of overtime.

SCHEDULED SCHEDULED PRODUCTIVITY

DAYS HOURS EXTENDED WEEK

6 8 98%

7 8 95%

SCHEDULED SCHEDULED PRODUCTIVITY

DAYS HOURS EXTENDED WEEK

6 10 84%

7 10 78%

FOR SPORADIC EXTENDED DAYS 

IN AN OTHERWISE NORMAL WEEK

FOR ISOLATED OR SPORADIC 

EXTENDED WEEKS

FOR CONTINUOUS OR PROTRACTED 

EXTENDED WEEKS

SCHEDULED SCHEDULED ACTUAL HRS PRODUCTIVITY

DAYS HOURS EXTENDED DAY EXTENDED DAY

5 8 9 100%

5 8 10 98%

5 8 11 95%

5 8 12 92%

5

Figure 8

Figure 9
In 1987 J.J. Adrian reported loss of productivity as part of an

analysis of a contractor’s claim. The data originate from concrete

activities in Chicago in 1982. The work was performed under ideal

weather conditions (60°-80°F). Figure 13 shows the productivity

losses reported for successive weeks of overtime.

In 1991 Haneiko and Henry published statistics on the impact of

overtime on concrete placement. The data were collected in 1986

on a backfit project in Texas. Overtime for concrete placement

averaged 20 hours/week (60 hours/week) for an eight-week period. Productivity during this period was 35% less compared with

the eight-week straight time period (40 hours/week), namely 6.78

hrs/cy vs. 5.01 hrs/cy. The only concrete work account that continued throughout the overtime period was the footings and

grade beams. Straight time productivity was 4.68 hrs/cy. Figure

14 shows productivity over eight weeks of overtime for the concrete placement of footings and grade beams.

U.S. Army

In 1979, the Corps of Engineers published the “Modification

Impact Evaluation Guide” for the purpose of evaluating impacts

due to changes. With respect to overtime, the guide recognizes:

“Working more hours per day or more days per week introduces

premium pay rates and efficiency losses. Workers tend to pace

themselves for longer shifts and more days per week...

When modifications make it necessary for the contractor to resort

to overtime work, some of the labour costs produce no return

because of inefficiency... 

if overtime is necessary to accomplish modification work, the

government must recognize its liability for introducing efficiency

losses...

... data are included merely as information on trends rather than

firm rules which might apply to any project...

Figure 11 Figure 14

6

Figure 10a Figure 12

Figure 10b Figure 13
... data do not extend beyond the fourth week, it is assumed that

the curves would flatten to a constant efficiency level.”

Figure 15 depicts the curves published by the Corps on the effect

of the overtime work schedule on efficiency.The origin of the data

relied upon is unknown. However, it appears that the Corps

accepted the NECA (1969) average data for 6-9s, 6-10s, 6-12s, 7-

8s, 7-9s and 7-10s since they are identical, and added some of

their own lines.

CONCLUSIONS 

At the outset of this article it was clearly stated that published

charts should only be used with the greatest caution and, more

importantly, only when no other practical method is available to

calculate productivity losses from the actual project records.

The inherent limitations of published charts have best been summarized by the U.S. Army Corps of Engineers:

“... data are included merely as information on trends rather than

firm rules which might apply to any project.”

Notwithstanding these limitations, appropriate application of

published data for the purpose of forward costing of a change or

accelerated schedule, i.e. before execution of the work, is considered advantageous to all parties involved. The owner will know

the cost prior to embarking on a change or accelerated schedule

and the contractor will get paid for the cost of the agreed upon

productivity loss during the execution of the work. With this

approach both parties share some risk but can avoid the costly

after-the-fact dispute resolution process.

The use of published charts in an after-the-fact claim situation is

more problematic. Each of the studies containing original data

applies to a very specific project environment for specific trades

only. It is, therefore, of the utmost importance to understand and

document the surrounding circumstances of a claim situation. It

is then up to the experienced analyst to compare the claim scenario to the published study which resembles it most and introduce adjustments if deemed necessary. Published data can

therefore be helpful in quantifying loss of productivity in overtime situations but the result will always remain an approximation, although it may be the best one under certain

circumstances.

For many types of projects no published data are available. Such

projects include roadwork, pipelines, transmission lines or extensive cut and fill operations, just to name a few. However, the

absence of such data is not surprising. On these types of projects

contractors typically record actual quantities and hours of work,

allowing for a loss of productivity calculation based on actual

data. Thus, an attempt to rely on undated published data on these

types of projects will invariably be treated with suspicion. Moreover, these projects are often planned from the outset with

10-hour shifts and/or 6-day week schedules to take advantage of

daylight or to attract labour to remote work sites. The latter aspect

is particularly relevant in cases where the labour force is housed

in camps, thus eliminating daily commuting time to the work site.

The fatigue resulting from a daily two-hour commute is considered similar to a daily increase of two working hours. Reliance on

published charts on such type of project is therefore highly questionable.

In claim situations where the loss of productivity is a result of

extended overtime and other parallel causes, none of the published charts offer any help in calculating cumulative losses. Conversely, relying on published charts for the isolation of one

specific cause such as overtime may yield unreliable results.

However, if there is no other practical way to calculate such loss,

the analyst may have no choice but to rely on a study which best

fits the project situation under scrutiny, to calculate an approximate loss.

REFERENCES

Adrian, J.J., (1987). “Construction Productivity Improvement.”

Elsevier Science Publishing, New York, NY, pp 96-98.

American Association of Cost Engineers, Morgantown, WVA

(1973). “Effect of Scheduled Overtime on Construction Projects.” AACE Bulletin (October). Prepared by Construction

Users Anti-Inflation Roundtable, Roger M. Blough, Chairman.

7

Synopsis

Based on the foregoing overview of available studies it is evident

that only a few are based on original data. Moreover, less than

reliable data have been published and republished over and over

giving a false appearance of originality. Finally, data are available

for a limited number of trades only. Figure 16 compares the

reported efficiency from various studies for the 50-hour, 60-hour

and 70-hour work weeks with the majority based on 10-hour

workdays and an overtime schedule of four consecutive weeks.

Subject to the qualifications already expressed, there is a certain

consistency in that there is a definite, but not necessarily linear,

decrease in productivity for each additional 10 hours per week.

Figure 15

Figure 16
American Subcontractors Association, The Associated General

Contractors Association of America and Associated Specialty

Contractors Inc. Washington D.C. (1979). “Owner’s Guide on

Overtime, Construction Costs and Productivity.”

Bureau of Labor Statistics, U.S. Department of Labor. Washington, D.C., (1947). “Hours of Work and Output.” by M. Kossoris,

Bulletin 917.

Construction Industry Institute, Austin, TX, (1988). “The Effects of

Scheduled Overtime and Shift Schedule on Construction Craft

Productivity.” Source Document 43. 

Construction Industry Institute, Austin, TX, (1994). “The Effects of

Scheduled Overtime on Labour Productivity: A Quantitative

Analysis”. Source Document 98. Prepared by H.R. Thomas and

K.A. Rayner.

Department of the Army, Office of the Chief of Engineers, Washington, D.C., (1979). Modification Impact Evaluation Guide EP

415-1-3. 

Haneiko, J.B. and Henry, W.C. (1991), “Impacts to Construction

Productivity.” Proceedings of the American Power Conference,

Vol. 53-II, pp. 897-900.

Howerton, J., (1969). “Do You Know the Hidden Costs of Overtime?” Qualified Contractor, (March).

Mechanical Contractors Association of America, Washington D.C.,

(1968). “How Much Does Overtime Really Cost?” Bulletin 18A. 

Mechanical Contractors Association of American, Rockville, MD,

(1994). Change Orders, Overtime and Productivity. Publication

M3.

National Electrical Contractors Association, Washington, D.C.,

(1962). Overtime Work Efficiency Survey. 

National Electrical Contractors Association, Bethesda, MD, (1969).

Overtime and Productivity in Construction. 

National Electrical Contractors Association, Bethesda, MD (1989)

Overtime and Productivity in Electrical Construction. 2nd edition, Index no. 5050-2M-1999-JAN.

O’Conner, L.V. (1969). “Overcoming the Problems of Construction

Scheduling on Large Central Station Boilers.” Proceedings of

the American Power Conference, Vol. 31, pp. 518-528.

The Business Roundtable, New York, NY, (1974). “Effect of Scheduled Overtime on Construction Projects.” Coming to Grips With

Some Major Problems in the Construction Industry.

The Business Roundtable, New York, NY, (1980). Reprinted 1986

and 1989. “Scheduled Overtime Effect on Construction Projects.” Construction Industry Cost Effectiveness Task Force

Report C-2.

Thomas, H.R., (1992). “Effects of Scheduled Overtime on Labor

Productivity.” Journal of Construction Engineering and Management, Vol. 118, No. 1, March.

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owners and contractors in achieving profitable

and trouble-free construction projects.

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to source appreciated. Your comments and

suggestions for future articles are most welcome.

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R. Brunies Z. Emir

Regula Brunies, Executive Vice-President and Zey Emir, Senior Consultant

and Branch Manager are both working out of the Montreal Office of 

Revay and Associates Limited.