In my first week as a new cost estimator many moons ago, a wise “grey beard” told me that he doesn’t think about things in terms of cost. He thought in terms of hours. “But aren’t we COST estimators?” I asked. “What are you estimating the cost of?” he replied.
Simply put, cost estimates are the monetization of resource requirement estimates, namely labor and/or material. Labor hours, full time equivalents, staff months, etc. are just some of the ways we quantify the amount of effort required. And what do we use to convert effort to cost? Labor rates!
In this multi-part blog, we’ll dig into the specifics of labor rates. We’ll address how labor rates are researched, categorized, burdened, and escalated. Of course, everyone does things a little differently. Luckily, we have a robust framework to work with (TruePlanning® ) where we can tailor all of these issues with ease. Stay tuned!