How To Estimate Project Hours in 8 Steps (With Tips and Example)
Updated March 10, 2023
Project managers are professionals who organize and oversee projects. During the planning stage, a project manager or leader may need to estimate the project hours to determine the project's completion date and to plan for the budget. Learning more about project hours and how to estimate them could help you create more accurate plans in your project management career. In this article, we explain why it's important to estimate project hours and provide steps to show you how to estimate hours for your next project.
Why is it important to estimate project hours?
It's important to estimate project hours, also called effort hours, during the planning stage to create accurate budgets and deadlines. By planning how long each task will take, you can create duration expectations. For example, if completing a task takes eight hours, and one person works on the task for one hour each day, that task will take eight days to complete. If a team of eight professionals works on the same task, it may take one day to complete. You can use the effort hours to create a schedule and milestones for your team.
You may also use the project hours estimate to create budgets and cost estimations. The effort hours can help you determine how many professionals you need to complete a task on time, which can help you calculate hourly wages as an expected cost. By designing accurate budgets and deadlines, you may create more accurate project plans.
Read more: What Is Project Planning? (With Examples)
How to estimate project hours
If you're estimating project hours for your team, consider following these steps:
1. Review project scope
The first step in estimating project hours is reviewing the project's scope or overall purpose. This can help you get a better understanding of the project and all tasks involved. The scope statement may also contain information related to deadlines or budget constraints. This can help you create and refine your estimate. For example, if the project has a strict deadline, you may need to gather more data to get a more accurate estimate. If the project has a flexible deadline, you may include an estimated range.
Related: Project Management: What Is Scope?
2. Create a list of tasks
After reviewing the project's objectives, consider creating a list of all tasks involved. Depending on your project's stage, you may find this information in the execution plan. If you're just starting to plan your project, consider collaborating with a project team to divide the project into smaller tasks. For example, if the project's main objective is to design a new computer, you might divide these tasks into researching similar products, creating a prototype and testing the design.
Read more: How To Use Task Lists in Project Management
3. Collect data for each task
After gathering or creating your list of tasks, you can begin estimating each part. There are different strategies you can use to complete this step. One popular method is asking the individual who completes the task. For example, if you are managing a marketing project, you might ask the graphic designer how long they take to design a new logo. An expert in the field may be able to provide more accurate estimations.
You could also ask the team lead or manager for an estimate involving their department. For example, if you are overseeing a new product design, you might ask the research team lead how long they expect the research task to take. Alternatively, you can conduct independent research or use project management software to help you calculate an estimate.
4. Include external hours
After collecting data from your internal team, you can gather information from any external sources you plan to work with. This may include freelancers, contracted professionals or specialists. Depending on the industry, the external professional may provide you with an estimate. For example, if you're hiring an external contractor, they may estimate how long each building task will take based on their previous experience and knowledge.
You can also estimate the hours by conducting research for each task or by looking at previous projects and their estimate. For example, if you're estimating a new sales campaign, you can review other similar projects to see the estimates. You can combine this with your own research to estimate your project's effort hours.
5. Consider revision hours
Depending on your project and industry, you may want to include revision hours in your estimate. These are the hours you may need to review or revise the tasks. For example, if you're estimating a new product design, you may include revision hours for the testing stage. After testing the product, your team may need additional hours to refine the design based on the testing results.
Consider asking the professionals who complete these tasks for their expert opinion. These hours can vary widely depending on the project, and someone who is an expert in completing the task may provide a precise estimate.
6. Consider adding contingency hours
You may decide to include contingency hours to plan for unexpected events. Contingency hours are extra hours that allow for unplanned changes. This is optional and may vary depending on the industry. For example, in a construction or production schedule, there may be more unexpected events, such as shipping delays or extreme weather. You can add contingency hours to your estimate to help prepare for this.
If the events do not happen, your team would complete the project ahead of schedule. For instance, if you add 10 contingency hours for shipping delays, and shipping is on schedule, your team may finish 10 hours early. If your deadline is strict, contingency hours may give you some flexibility during the project, while helping you finish on time.
7. Add all components together
Once you've gathered all of your data, you can add the total hours together. This includes internal tasks, external duties, revision hours and contingency hours. Typically, professionals write the final estimate in hours rather than days. This is because team members may complete multiple tasks at once, and the number of professionals that complete each task can vary. For example, a team of 10 professionals can complete a 100-hour task in several days if they spend most of the workday completing the task. If they only spend one hour per day on the task, it'll take more days to complete.
8. Review and revise the estimate
Once you have your total estimate, you can review the number to ensure it's accurate. You may compare this number to other projects and discuss it with your team members. If it seems much higher or lower than previous, similar projects, consider reviewing each task to determine why. If you gathered data from individual team members, you may compare the tasks and ask follow-up questions as needed. This can help you refine your total hours and get a more accurate estimate.
Tips for estimating project hours
Here are some general tips you can use when estimating project hours:
Consider project planning software
Project managers and team leaders can use a variety of tools to make the estimation process easier. Consider exploring planning software or programs to help you collect and organize your project estimate. For example, you may use a software service that allows you to input all tasks and share the information with all team members. They can review the tasks and input their expected hours. By improving communication and visibility, you can collect and refine data faster.
Review previous projects
When estimating your project hours, consider reviewing previous projects within your company. You can look at the task breakdown or review the overall effort estimation. You may compare this information with your own review. For example, if you're leading a production project, you might look at a previous production project to compare your estimates. Each project can vary in length and effort, but seeing data related to a specific task, such as research, marketing and production, could help you revise your own estimates to make them more accurate.
Consider high and low estimates
Some professionals prefer high estimates, or conservative estimates, while others may take a low or optimistic estimating approach. For example, if the research phase typically takes four days, a conservative estimator may budget six days, while an optimistic professional may budget only three. Consider taking both the high and low estimations to determine an average. This can help you generate an accurate estimation.
Example project hours estimate
Here is an example you can use to guide you when estimating a project's hours:
Candace is a project manager at Better Way Marketing. She's estimating the project hours during the initial planning stage. She wants to use the estimate to plan the project costs and completion date.
To begin her estimate, she lists all the project tasks. She then consults with her team members and external freelancers to get their individual estimates. She also adds revision and contingency hours to create a conservative estimate. She reviews the final numbers and compares it to similar projects to ensure it's accurate. She creates the following estimate:
Project name: New website design
(Task: estimated time in hours)
Web page tasks
Purchase domain: 1
Write code: 3
User experience testing: 6
Graphic design tasks
Logo design: 3
Color scheme 2
Landing page copy: 2
Design revision: 5
Writing revision: 1
Contingency hours: 2
Total hours: 31
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