What it means
Imagine a project that needs 24,000 hours of work. Rather than listing every task, a planner converts the hours into man-years, which makes the scale easy to grasp and compare.
The measure is common in engineering, software development, government budgeting and consulting. The number of hours in a man-year is a choice, not a law.
Many organisations use about 2,000 hours, based on 40 hours a week for 50 weeks, while others use a lower figure to allow for holidays, sickness and training. Whatever the figure is, it should be stated clearly so that estimates can be compared.
Man-years help turn a work estimate into a budget. Multiplying the number of man-years by the fully loaded annual cost of an employee, which includes salary, benefits, taxes and overheads, gives a labour cost.
This is a quick way to check whether a proposed project is affordable. There is an important catch, famously noted in software circles: work does not always divide neatly.
Twelve man-years of effort does not mean that twelve people can finish in a year, or that 144 people can finish in a month, because coordination takes time and some tasks must happen in sequence. Because the older wording is gendered, many employers now prefer person-year, staff-year or FTE.
The calculation is identical, so a glossary reader who meets any of these terms in a report can treat them as the same unit. It also pays to separate productive hours from paid hours.
A person paid for 2,080 hours may spend a fifth of that time in meetings, training and leave, so a plan that assumes every paid hour produces output will usually run late and over budget.
In practice
Real-world examples.
Example
A software company estimates that a new mobile app needs 9 man-years of development. With a team of 6 engineers the company expects a delivery date of about 18 months, and it budgets on that basis. It also adds a contingency of two months for testing and fixes.
Example
A government department planning a new tax system tells parliament the project requires 150 man-years of effort. The finance team converts this to a cost by applying an average fully loaded salary for contractors. At $100,000 each, the effort alone is 150 x $100,000 = $15,000,000, before equipment and licences.
Example
A consulting firm sells an engagement to a retail chain for 3 man-years of work. It prices the contract by multiplying the man-years by its standard annual billing rate per consultant. The client is told that three people for a year, or six for six months, would deliver the same effort.
Formula
Calculation
Man-years = Total hours of work / Hours in one man-year
Labour cost = Man-years x Annual cost per person
A company estimates that a system upgrade needs 24,000 hours of work. Using 2,000 hours as one man-year, the effort is 24,000 / 2,000 = 12 man-years. If each person costs the business $90,000 a year including benefits and overheads, the labour cost is 12 x $90,000 = $1,080,000. A team of 12 people would take about one year, while a team of 6 would need about two years, subject to the coordination limits above.Case study
Seen in the real world.
Northgate Systems is an illustrative, fictional software consultancy that won a contract to rebuild a client's billing platform. The first estimate was 20 man-years, which the sales team converted into a one-year timeline with 20 people.
The delivery lead pushed back. Many tasks depended on others finishing first, and adding that many people would create so much communication overhead that the team would lose pace. He also noted that the 20 man-years assumed everyone would be fully productive from day one, which was unrealistic for a new client system.
The final plan used 12 people over two years, with a phased handover, which the client accepted. In this illustrative story, the lesson was that man-years measure effort, not calendar time, so a staffing plan needs separate thought.
Watch out
Common mistakes.
- Assuming that doubling the number of people halves the time, when coordination and dependent tasks often prevent this.
- Using different hours per man-year in different estimates, which makes the figures impossible to compare.
- Costing a man-year at salary alone, when benefits, taxes and overheads can add a large amount.
Questions
People also ask.
How many hours are in a man-year?
There is no universal figure, but 2,000 hours is a common planning assumption, and some organisations use a lower number to allow for leave and training.
Is a man-year the same as an FTE?
Broadly yes, since an FTE is one person working a full-time schedule for the period, and many organisations now use FTE or person-year instead.
Why is the term still used?
It is a handy shorthand for effort in project planning and budgeting, even though the language is gradually being updated.
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