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Planned hours and actual hours are a comparison between the total number of hours a task or project was planned for, versus the number of hours it took. It is useful for organizations to assess their efficiency, monitor how work is being utilized, and assess how a project is tracking against deadlines.
A planned hour is set at the beginning of a project during the planning phase. It is an estimate, and there are bases for this estimate, such as the difficulty in completing the task, the available capacity of the team, and deadlines. The actual hours come from the time that is logged once the work is completed. The variance between the planned hours and actual hours helps businesses investigate the accuracy of their time estimates and how well tasks are being executed.
For example, if an organization planned a project for 20 hours but it subsequently took 30 hours, the gap indicates that there was a 10-hour delay. Understanding where these time gaps start to arise allows for better plan refinement, effective use of time, and remaining under budget.
Measuring the difference between planned hours and actual hours is an important measure for productivity and time management. Here is why this information is important to all workplaces:
It is not unusual to plan project schedules ahead of time. An important measure in determining the strength of that project plan is comparing the estimates to the actual time spent. If a team always comes in over their estimated hours, it may be a sign that their plan was not realistic or their execution was lacking.
It is said that "time is money"; it rings even more true in some professions than others. There are specific industries where time is billed to clients based on hours of work. When the actual hours exceed the planned hours for the project, this can increase the costs associated with the project. Managing this information gives more control over costs and knowledge over time spent in relation to how to make a project profitable.
The planned vs actual comparison can be used to assess the performance of individual employees and the team as a whole. When a task or project constantly exceeds the number of planned hours, it could be a sign of a lack of skill in the role or the need for better tools and execution.
When actual hours exceed planned hours consistently, it might indicate that staff are working too many hours. This is valuable information for managers who can then distribute the work amongst the employees with the overall goal of reducing stress and burnout.
In service-based organizations and businesses, accurate time tracking can help build trust with clients. Accurate tracking of the project and ease in communicating where a project is, if it is delayed, creates transparency for clients on where their investment is going.
A tech team intends to implement a new feature in 40 hours. After development, QA (Quality Assurance) and revisions, the team ended up logging 65 hours. This indicates that the team underestimated how long the task would take and may lead the team to reconsider how it plans for future sprints.
A designer is asked to make a marketing banner and plans to put 5 hours' worth of time into it. The banner ended up taking 3 hours, so the designer was faster than they expected. This helps the team plan for future tasks better.
An IT helpdesk plans for 15 hours of coverage for a new product launch day. However, due to there being more customer issues than anticipated, the team ended up logging 25 actual hours. This provides important information for planning staffing in the future.
The planned vs actual hours concept is implemented in project-based or time-sensitive environments. Here’s how it typically works:
Before starting work, the manager or team estimates how long a task should take. This is the "planned hours." It's based on:
Once work begins, employees track their actual hours using time tracking tools, digital timers, timesheets, or attendance logs.
At the end of the task or project, planned and actual hours are compared. Reports may show:
Managers analyze why differences occurred. Did a task take longer because of poor planning, skill gaps, distractions, or technical issues? This stage helps improve future estimates.
The findings are used to improve future time estimates, train employees, or streamline processes.
This process creates a feedback loop where time planning gets more accurate over time, improving efficiency and project outcomes.
These three terms are often used interchangeably, but they have different meanings:
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Time Champ simplifies the process of tracking and analyzing planned vs actual hours. It offers tools that help project managers, team leads, and employees keep time under control.
With Time Champ, businesses gain a clear picture of how time is spent, leading to more accurate forecasting and better decisions.
