Every job gets a labor estimate before it starts. Call it the sold hours, the number you built the bid around. Then the job happens, and there's a different number, the actual hours your crew spent getting it done. Most shops never put those two numbers side by side. That's a missed opportunity, because the gap between them is one of the most honest pieces of information you can get about how your business is really running.
Two numbers most shops never compare
When actual hours come in close to sold hours, that's a good sign on two fronts. Your estimating is accurate, and your crew is performing the way you expect, which is usually a sign your labor rate itself is set correctly. When there's a gap, the real value is figuring out which side caused it, because the fix is completely different depending on the answer.
When the gap is on the estimating side
Sometimes the gap is on the estimating side. If job after job of a certain type comes in over on hours, the sold number was probably wrong to begin with. That's not a crew problem, that's a number that needs updating so future bids reflect reality.
When the gap is on the execution side
Sometimes the gap is on the execution side. If one particular crew consistently takes longer than the sold hours on jobs where a different crew hits the number, that's useful information too, just not the kind you want to use to embarrass anyone. It might mean a training gap. It might mean that crew keeps getting handed the harder jobs and nobody's adjusted for it. It might just mean they're more careful and it shows up in the finish quality. The number alone doesn't tell you which one it is, but it tells you where to look.
Use it to catch patterns, not to grade installers
The shops that get real value out of this aren't using it to grade installers against each other. They're using it to catch patterns early, before a string of over hour jobs quietly wipes out a month of margin, the same gap that shows up when you compare sold margin against produced margin on a job. A single job running long isn't a crisis. The same pattern repeating across ten jobs is something you want to catch on job three, not job ten.
This is exactly why tracking sold hours against actual hours by job and by crew matters, and why it's part of what we built into the scorecard and margin tracking side of FloorStrategy.
FloorStrategy is built to track sold hours against actual hours by job and by crew automatically. FloorStrategy's founder pricing is locked in for life if you sign up before spots run out. See plans.
FAQ
What does it mean when actual hours come in close to sold hours? It's a good sign on two fronts. Your estimating is accurate, and your crew is performing close to what the bid assumed.
How do I know if a labor gap is an estimating problem or a crew problem? Look for the pattern. If a certain job type consistently runs over hours across different crews, the sold number was probably wrong. If one crew runs long on jobs where others hit the number, that points to something specific to that crew, not the estimate.
Should I use sold versus actual hours to rank installers? No. The shops that get the most value from this use it to catch patterns early, like a job type that quietly eats margin, rather than to grade or compare individual installers against each other.