Whether you are looking to accurately capture your military projects for your Project Management Professional (PMP) certificate application or for your annual eval (NCOER or OER), properly valuing your project worth can be challenging for military project managers. Most military project managers think in terms of cost savings for the military. This is correct since we are a “not for profit” organization like corporations but it leads military project managers to overlook a key line item when it comes to determining the value of our projects – LABOR!
Some military leaders would think that the cost of labor is not necessary if a project team is comprised solely of military members. Many of us grew up with the saying “I’m a Soldier 24/7” and thus pay does not fluctuate whether I am on a project or doing my normal daily duties. However, hours spent working on a project is still hours with committed labor costs toward project completion. If a military project manager had contractors working on a project instead of military members, the cost of labor would be calculated into the project expenses. Soldier/Sailor/Airman/Marine work costs toward a project are still hours and labor the military has obligated toward a successful project. Properly capturing and valuing your project costs should be the goal of every project manager. You will need an accurate portrayal of your project for your PMP application and practicing correct estimation of project costs allows a more accurate depiction of project performance on your OER or NCOER.
So how do we estimate hourly wages for our “green-suit” work force? That is actually pretty easy. You can find a copy of any pay chart online via a search. Here is a copy of the 2017 pay chart for the military:
Now let’s give an example project team comprised of:
- 1 Project Manager – Rank/Grade of SSG (E-6) with 10 years Time In Service
- 3 Project Team Members – Rank/Grade of SPC (E-4) with 4 years Time In Service
Calculating their hourly rate can be done by:
- Figuring the annual salary of each team member
- Figuring the number of hours a week you will use in the calculation X number of weeks in the year (ex. 40 hour work week X 52 weeks = 2080 hours in a year)
- Dividing the annual salary by the total hours for the hourly rate
In our example above, the calculated rates would be:
- Project Manager
- E-6 rate, 10 years TIS = $3,480 for monthly salary (base pay only)
- Monthly salary of $3,480 x 12 months = $41,760 annual salary
- A 40 hour work week (home station not deployed) 40 hours/week x 52 weeks = 2080 hours for work hours in a year
- Hourly rate = $41,760 / 2080 hours for a total of $20.07 an hour
- Project Team Members
- E-4 rate, 4 years TIS = $2,432 for monthly salary (base pay only)
- Monthly salary of $2,432 x 12 months = $29,184 annual salary
- A 40 hour work week x 52 weeks in a year = 2080 work hours in a year
- Hourly rate = $29,184 / 2080 for a total of $14.03 an hour (for each team member)
Calculating your total project cost would roll these labor calculations into the overall project price cost. This gives you a more accurate look at the labor costs associated with your project and can be aggregated with the other costs (parts, additional equipment needed, etc.) for a more accurate calculation of total costs associated with your project.
Why is this important? One reason is that shows the Project Management Institute (PMI) that you understand proper cost management for projects when you list your project for a PMP application. Another reason is that you may be undervaluing your projects that you are actively working on or that you have completed in the past. Imagine a project that you valued at $125,000 for your organization actually valued at $200,000 given the man hours exerted for this project. If you are wanting to accurately portray your project effectiveness on your OER/NCOER, proper valuation of your project costs shows the full impact of what you have achieved. You can couple the size / scale of your project versus the cost savings you provided to the military (and ultimately the taxpayer).
“Managed a _(insert project type here) project valued at $200,000 which provided the Army a cost savings of $XXX,XXX (or improved operational readiness by XX%)”
Some final advice for military members on project valuation:
- Although deployments will exceed a 40 hour work week considerably, be conservative in your project hour calculations. I used a 60 hour work week in my valued projects (deployed) even though it was more like 80 hour work weeks. Conservative estimation for deployed projects prevents skewed looking calculations on project hours / labor costs. Although we know it’s a reality of deployment, you want to avoid the appearance of “padding your project hours” for an application.
- Make sure your rater/senior rater understand the full scope of your project costs also. Everything you get credit for on an OER / NCOER, they get credit for as a project sponsor. This also endears them to your project success and likely provides more buy in on future projects you work on.
- Keep accurate count of the projects you work on. Let’s face it, if you apply for a PMP certification, you do not want to guess at the work done on past projects. Maintaining a record of your past projects helps you easily transfer it to your PMP application. It also allows you to provide sample projects you have worked on to a potential employer after your career in the military is completed. Being able to articulate the nuances of your past projects is vital for showcasing your project management experience. Even if you cannot share the particulars of your project, you can articulate the costs and scope of your project to give an employer a sense of your experience.
Keep these tips in mind in your future projects and make sure to accurately portray your project performance. Good luck!!