An Outline of Resource Groups, Resources, Rate Tables, and Markups

Resource Groups, Resources, Rate Tables, Markups 

In the construction industry, several general contractors “self-perform”, meaning that they employ their own people to complete certain steps of the construction process. When companies self-perform work, they need a way to calculate the cost of labor based on the amount of work, pay rate, and the speed that they can complete that work. Resource groups, resources, rate tables, and markups are used to calculate this cost. 

For this document, we will build out resource groups, resources, and rate tables for building and painting a wall. 

Resources 

Resources represent the roles of individual workers. For example, a wall installation team could have the following roles: 

• Wood cutter and installer-$15/hour 
• Drywall cutter and installer-$10/hour 

A painting team could have the following roles: 

• Painter-$10/hour 

In addition to the worker’s base rate, the employer might have overhead costs associated with employing the worker. These overhead costs can include: 

• Medical Insurance 
• Union Fees 

These additional costs are applied as Resource Markups (RM). Inside Data Manager and Estimator, resource markups appear as columns. These markups are added onto the Base Rate to get the Total Rate: Total Rate=Base Rate+Markup1+Markup2+… 

Using the first resource as an example, we can calculate the Total Rate: 

• Total Rate=$15 + ($15*15%) + $2 
• Total Rate=$15+$2.25+$2 
• Total Rate=$19.25 

Since the Total Rate represents the true cost of the resource, this is the value that is used for the resource’s calculations inside Estimator. 

Resource Groups 

Resource groups (RG) are a combination of resources that work together to complete a task. In the construction industry, resource groups are also called crews. The user combines them together so they can easily be applied to a line item. For our example, we will create the following resource groups: 

Resource Group Productivity Rates 

A productivity rate is the amount of work a resource group is able to complete in a specific amount of time. The user is able to specify productivity rates after applying a resource group to a line item’s cost category. Even though any cost category can hold a resource group, typically resource groups are applied to the Labor Cost Category since it represents the personnel cost of completing a task. 

A resource group applied to a Labor Cost Category looks like this: 

• Labor Cost=resource group, amount of work/amount of time 

For example, let’s say that the Drywall Installation Crew can build 100 Square Feet of a wall in 2 Hours. That productivity rate would look like this: 

 Since our resource groups are charged per hour, we can simplify the productivity rate to be based on 1 hour instead of 2 hours: 

Rate Tables 

Rate tables (RT) typically represent geographical regions that have differing labor costs. For example, labor costs can vary by state based on the cost of living or state minimum wages. Like resources, rate tables have markups called Rate Table Markups (RTM) that are applied to all resource groups in a particular cost category inside the estimate. 

For example, let’s consider the regions California and Texas that have a Cost of Living markup: 

 Whenever the user applies the California rate table to the estimate, all line items having a resource group applied to the Labor Cost Category will see a 25% increase in the resource’s hourly rate: 

 Overridden Resource Groups 

Overridden resource groups are resource groups that are applied to a rate table for the purpose of customizing their resources’ details. When a rate table is applied to line items inside Estimator and contains resource groups, those line items will use the overridden values for driving calculations instead of the original values inside the resource’s definition. 

For example, say Texas has cheaper medical insurance and no unions.  Inside the Texas rate table, the user can override the markup’s value for each resource. 

 Resource Group Calculations inside Estimator 

Using all of this information, we can determine how much it will cost crews to complete a certain amount of work inside Estimator. 

Let’s say that the user adds the following line item to the estimate by the Default Rate Table (without markups or overridden resource groups): 

• Description=Drywall 

• Quantity=1,000 Square Feet 
• Labor Cost=Drywall Installation Crew, 50 Square Feet per 1 Hour 

In order to complete 1,000 Square Feet of Drywall, the crew will need to work 20 hours. Using the original resource’s cost definition of $32.75/hour, 20 hours of work will cost $655. 

If the user changes the rate table, quantity, base rate, markups, or productivity rate, the Labor Cost will adjust using the same math above. 

Durations inside Estimator 

Inside Estimator, the user is able to see the resource group’s duration and the resource’s duration. The resource group’s duration is the amount of time it takes for the crew as a whole to complete their work.  

Continuing the example above, the resource group takes 20 hours to complete the task. Assuming 8 hours in a day, 20 hours is the same as 2.5 days. 

The resource’s duration is the summed amount of time each resource requires in order to complete their individual task, also referred to as Man Hours. Since there are 2 resources inside the Drywall Installation Crew and it takes 20 hours for the crew to complete the task, it will take 40 Man Hours to complete the task. This is the same as 5 Days assuming an 8-hour workday.