Suppose a crew costs £160 for each paid hour. At an output of 10 m³ per hour, the labour cost is £16 per m³. If the same crew achieves 8 m³, the cost becomes £20. No wage rate has changed.
That is why I find an isolated hourly rate a poor basis for judging whether an estimate is competitive. The output assumption deserves at least as much attention.
A productivity allowance should describe the work that can actually be completed during paid time. Access restrictions, waiting for materials and the sequence of operations can all affect that result. Applying several overlapping efficiency deductions can be just as misleading as ignoring the constraints.
Illustrative crew cost of £160 per hour divided by achieved output. Values are rounded.
Check the denominator
The first question is whether the stated output already reflects normal site conditions. A historical rate from a completed project may already include some waiting and disruption. Applying a further general efficiency factor could count those losses again.
The second question is whether the output uses the same quantity basis as the estimate. A crew record measured in loose cubic metres cannot be transferred directly to a bank-volume quantity without reconciling the units.
Keep the crew composition, paid hours and achieved output together. When a reviewer challenges the rate, the discussion can then focus on a specific assumption. The team may decide that a different work method is needed, or that the programme is too optimistic. Either conclusion is more useful than reducing the rate until the total looks acceptable.