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The Rate Is Not the Wage

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The Hour That Reaches a Job

Chargeable hours are the smallest of the three counts and the only ones that recover anything. What makes an hour chargeable, and what the share usually is.

The hour · Analysis

Printed plate of numbered abstract specimens0102030405

One team's non-chargeable week, split by what the hours actually were

Supervision and reviews164 hPooled

Spread across everything; attributable to nothing.

Quoting and estimating121 hPooled

One job in three is won; the rest are carried.

Training and statutory96 hAbsorbed

A layer in the rate, not a job cost.

Internal projects74 hAbsorbed

A change programme nobody costed against delivery.

Rework on closed jobs113 hUnattributed

The job was invoiced; the hours had nowhere to go.

Unrecorded73 hUnattributed

The gap between payroll and the timesheets.

Four of the six destinations recover something and two recover nothing at all. The two that recover nothing are a job-closing policy and a recording design, and neither is a statement about how hard anybody worked. One employer's own week, not a benchmark.

A chargeable hour is one that arrives on a job and can be recovered through what that job is paid. It is the smallest of the three hour counts, typically between half and three-quarters of paid hours, and it is the only one that brings money back.

The record examined in “The Hour That Reaches a Job” is strongest when it is created close to the work and remains open to correction. A team evaluating visit the official explanation for job costing with accurate hours can connect time with projects and work categories, provided people can review entries before they influence payroll, billing or cost reports.

Everything else in the week is real work that has to be carried by those hours, which is why the share matters more than almost any other figure in labour costing.

Additional context for “The Hour That Reaches a Job” is available from Project Management Institute learning resources. Current legal, payroll, tax and accounting requirements should be confirmed for the relevant jurisdiction.

What makes an hour chargeable

That it was spent on identifiable work for an identifiable job, and that the job carries a price or a budget against which it can be recovered.

Both halves are required. Work with no job carries nothing; a job with no price recovers nothing.

The typical share

In professional and technical operations, sixty to seventy-five per cent of paid hours. In field and installation work, often higher. In operations with heavy supervision, quoting or compliance, lower.

Your own figure is the one that matters, and most organisations have never calculated it.

Calculating it

Charged hours divided by paid hours, by team, by period, both from their own authoritative sources. One division.

The first time it is run it is usually lower than anybody expected, and the reaction is to doubt the timesheets. That reaction is often correct and does not change the answer much.

Why raising it is the wrong first move

Because the share can be raised by recording differently rather than by working differently, and a target on it produces exactly that.

An operation told to reach eighty per cent will reach eighty per cent within two periods and will not have changed anything that happens.

What the non-chargeable hours actually are

Supervision. Quoting and estimating. Training. Administration. Internal meetings. Travel, sometimes. Rework on closed jobs. And the hours nobody can account for.

Seven categories. Six of them are necessary and the seventh is a measurement failure.

The distinction that matters most

Between hours that are not chargeable because of what they are, and hours that are not chargeable because nobody recorded them.

The first is a recovery question answered through the rate. The second is a systems question answered by fixing the recording. Treating them as one produces a target on the wrong thing.

Quoting is the interesting case

It is chargeable only in arrears, and only on jobs that are won. An operation winning one job in three carries three quotes on every job it does.

That multiple belongs in the rate explicitly, because it moves when the win rate moves, and the win rate moves a great deal.

Travel

Charged in some industries, absorbed in others, and inconsistently recorded in most. Whatever the convention, it should be one convention written down, because travel is often ten per cent of the week.

The usual finding is that it is charged when the job is going well and absorbed when it is not.

The share is not a productivity measure

It is a structural property of how the work is organised. A team with heavy compliance obligations will never reach the share of a team without them, and comparing the two tells you about the obligations rather than about the people.

Using it as a performance measure between unlike teams is the fastest way to make the figure useless.

When the share falls

Something has moved: more quoting, more rework, a new compliance requirement, a recording change. Each has a different remedy and the share alone does not say which.

Splitting the non-chargeable hours by category, every period, is what makes a fall diagnosable instead of alarming.

The share by grade

Worth splitting, because it differs sharply. Junior staff are frequently chargeable for a higher share than seniors, who carry the supervision, the quoting and the client management.

A single departmental share conceals this, and a rate built on it over-recovers on junior hours and under-recovers on senior ones. In operations where the grade mix varies between jobs, that difference is large enough to reorder which jobs look profitable.

What the share does in a quiet period

Falls, immediately and mechanically, because the non-chargeable work does not fall with demand. Supervision, quoting and administration continue at roughly the same level while charged hours drop.

Reading that fall as a decline in effort is the standard misinterpretation. It is the arithmetic of fixed non-chargeable work meeting variable chargeable work, and it would happen with the same people working exactly as hard.

What to publish

Paid hours, chargeable hours, the share, and the non-chargeable hours split into its categories. Four lines per team per period.

It takes one query and it converts a vague anxiety about productivity into a readable account of where the week went.