Creative Construction Conference 2014

Comparative analysis of the machine labor ratio for earth

excavation in different economies
Mario Galica, Abdur Rehman Nasirb, Zlata Dolacek-Alduka*, Hans-Joachim Bargstädtb
a
J. J. Strossmayer University of Osijek, Faculty of Civil Engineering, Drinska 16a, Osijek 31000, Croatia
b
Bauhaus Universität Weimar, Faculty of Civil Engineering, Marienstraße 7A, Weimar 99423, Germany

Abstract

Earth excavation has the same process flow in all parts of the world. But the choice between excavation technology i.e.
manual or machine work, or combination of these vary in different parts of the world as well as costs of manual work and the
availability of construction machinery. According to the MGI (2012) there will be potential surplus of 90 to 95 million low-
skilled workers in the world by 2020. In advanced economies demand for high-skilled labor is growing faster than supply,
while demand for low-skilled labor is weakening. In this paper authors analyze excavation costs in order to determine
whether manual work for this kind of job will be possible and cheaper or not. Cost and time analysis is made for the
excavation of naturally moist solid soil in a wide shallow pit for building foundations using minimal worker salary and
minimal machine costs per hour, related to standards for countries like Germany, Croatia, Pakistan, New Zealand and India.
As expected, results have proved that machine work will be the optimal choice in Europe because of insufficient work force
to replace a machine in addition to the expensive manual work. However, in developing countries machine work still is not
the clear choice.

Keyworks: costs, excavation, human-machine ratio, low-skilled workers.

1. Introduction

Increasing development of the manufacturing technologies in most industries has brought significant
economic improvement of the manufacturing process in comparison to 50 years ago or even in some industries
10 years ago. The construction sector has also reported about its technology improvements in recent decades.
Manufacturing of building materials and prefabricated components today are almost entirely automated, while
construction on site or in situ production and installation is still largely dependent on human labor and done
mostly manually, specifically in developing countries. The construction industry in most countries has a
significant share of employees in the market and a huge potential for employment of a large number of
unemployed unskilled or seasonal workers. According to the International Labor Organization ILO (ILO, 2014),
approximately 5 million workers in the construction sector were laid off due to the global economic crisis in
2008 and, more interestingly, a nearly equal amount of workers was dispersed in all parts of the world.
Orlikowski stated (Orlikowski, 1992): it is crucial to understand how different conditions influence on
development, maintenance and use of technologies because it could give us insight into the limits and
opportunities of human choice and organizational design. Construction is always considered as a major
investment component. Hence expansion in construction activity is closely related to economic growth (Wells,
J., 2001). Apart from the provision of growth to other industries through backward and forward linkages, the
construction industry generates extensive employment opportunities throughout the globe (Khan, 2008). As per
the study conducted by Proverbs (Proverbs D.G., et al, 1999), the construction sector stands among those
providing 7.2 % employments to the workforce in Europe. Construction has the ability to “absorb the excluded”
(de Souza, 2000). By satisfying the social responsibility, the construction industry provides employment
opportunities to the world’s poorest and most vulnerable people. It provides work to low-skilled or entry-level
workers and to those migrating from the rural areas (BWI, 2006). Moreover, the construction sector also
provides much needed employment in the developed world to those with few academic qualifications (Wells, J.,
2001).
As per the survey by the Construction Users Roundtable (CURT) conducted in 2001, 82 % respondents
reported shortages on their projects while 78 % indicated that the shortage had worsened in the 3 years prior to

* Corresponding author. Tel.: +38531540093; fax: +38531540071.

E-mail address: zlatad@gfos.hr
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the study (CURT, 2009). The Construction Labor Research Council (International, 2006) predicts that 185,000
new workers need to be attracted, trained, and retained each year up to 2016 in order for the industry to replace
expected turnover and sustain the construction industry’s growth expectations. Global Institute’s report in 2012
also predicts a potential surplus of up to 95 million low-skilled workers around the world, or approximately 10
percent of the over-supply of such workers is expected by the year 2020 with an expected potential shortage of
about 45 million high-skilled workers or 13 percent of extra-demand of such workers. With this future picture,
one can easily predict some unevenness in the employment market for the near future. For sure, a long-term and
permanent joblessness may be observed by every industry, with no exception for construction sector. Looking
into the past, the majority of excavation work for an ordinary moist soil was carried out by manual means, i.e.
with low- or unskilled labors. The required number of labors with the help of rudimentary tools performs the
operation in order to meet the desired objectives of excavated soil within allotted time. As it appeared that
construction would be ever more automated in near future, investments came into picture on more sophisticated
equipment in order to compete in this technical industry. In return, the construction industry attains the desired
results in quick time with less number of workers. But even now, the idea of using this mechanized technology is
not ideal in all parts of the world. Most of the developing countries find it suitable to perform the not-so-large
excavation tasks by manual means due to the availability of high number of low and un-skilled labor. In this
study, a parametric analysis has been made between the countries chosen from the developed and developing
world in order to look at the feasibility of manual and mechanized operation in an excavation activity.

2. Methodology

First part of the paper is focused on the general problem formulation based on the literature review and
statistical trends of low-skilled workers on the global labor market, and for countries Germany, Croatia,
Pakistan, India and New Zealand. In the second part parametric analysis was made based on the gathered input
parameters for each country (average hourly costs and standard times of machine and manual excavation for the
same average site conditions for a wide shallow pit and naturally moist soil). Final part of the paper consists of a
comparative analysis and discussion with general conclusions.

3. Machine labor ratio for earth excavation

3.1. General problem formulation

Earth excavation has the same process flow in all parts of the world (Figure 1). But the choice between
excavation technology, i.e. manual and/or machine work, or any combination of these two varies in different
parts of the world. Differences are basically measurable and structured by: objective function (minimal
excavating expenses and/or minimal total time) and constraints for decision (availability of resources: excavators
and low-skilled workers). While machine excavation technology has significantly improved during the last 30
years, manual earth excavation hasn’t improved by any means since the record of history. Still tools and
excavation techniques are basically the same and only difference of their usage is by certain earth categories
(from humus to solid soil). In time when great historical constructions have been built, engineers didn’t have, not
by far, technologies as we do today, but still today those constructions are recognized as wonders of the world.
Engineer’s choice was simple, they didn’t have any, but to employ as much of the labor that was available.
Nowadays, engineers optimize construction works by all kinds of criteria (mostly by time and costs), and the
optimal solution is usually machine usage if possible. Still it’s not possible to carry out total automation of
construction works. Still construction industry is highly depended on human labor, to be exact on the most
numerous group of construction workers: low-skilled workers. The immeasurable or hardly measurable criterion
in optimization is the social aspect in terms of employment of those millions of low-skilled workers.

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3.2. Survey

In this paper authors have determined parameters by which they conducted parametric analysis of human-
machine ratio and option between manual and machine earth excavation by authors’ domestic countries. In order
to ensure the comparison of results, the input parameters were taken as the same. These parameters include
national standards as a reference for required time of manual excavation and required qualifications of workers,
statistical numbers and employment trends of low-skilled workers, hourly wage of those workers for excavation,
hourly costs of the hydraulic excavator with agreed typical performances (70kW, wheels, mass=14t,
bucket=0,86m3), and standard or calculated time needed for an excavator to excavate one cubic meter, in the
same average site conditions and same soil type for all five selected countries.

Figure 1. General decision tree for excavation of wide shallow pit

3.2.1. Global trend of low-skilled workers on labor market

As it has been mentioned earlier, according to the MGI (2012) there will be a potential surplus of 90 to 95
million of low-skilled workers in the world by year 2020. Construction industry has always been a great
potential source of temporary employment for those workers.

Figure 2. Trend of low-skilled workers employment [number x 1000]

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 As we are witnessing the global economic transformation happening at a scale and a rate faster than ever in
history, the demand and supply on the labor market significantly varies in different parts of the world. While in
Europe the number of low-skilled (low and unqualified) workers is decreasing by the decrease of demand, in
some developing countries it increases (Figure 2) (Eurostat, Statistic New Zealand, USA Government Data
Statistics, Statisticas Canada).
Statistical reports (Eurostat, 2014) showed that there were 42 million of low-skilled workers in 2012 in the
EU, and this number is decreasing since 2006 when there were 52 million. In terms of employment of those
workers, economically stabile countries (e.g. Luxembourg, Germany, Denmark, Norway and Switzerland) have
a high percentage of employed low-skilled workers and those countries are considered to be the most
economically developed countries (Table 1). Countries at the bottom of the table are still reporting an increase of
low-skilled workers, thereby maintaining the employment opportunities below EU percentage. As a side effect,
migration of those workers is logical. Looking into the picture of developing countries from Asia, statistics in
India reported around 211 million of low-skilled workers in the year 2011, which by itself is an inconceivable
number and cannot easily be compared with other countries. While in Pakistan, by last known statistics from the
same source in 2008, there were 8.5 million low-skilled workers (ILO, 2014).

Table 1. Percentage of employed low-skilled workers in Europe (ordered by the 2012 report from highest to lowest) (Eurostat, 2014)

% employed out of total number of low-skill workers

GEO/TIME
2006 2007 2008 2009 2010 2011 2012
European Union 79,42% 79,62% 79,93% 79,90% 79,47% 80,09% 79,89%
Hungary 92,95% 93,92% 94,56% 94,33% 94,78% 95,15% 95,51%
Estonia 93,53% 92,50% 94,63% 93,42% 94,25% 92,77% 94,44%
Slovakia 93,47% 94,47% 94,57% 92,19% 92,20% 92,79% 94,27%
Luxembourg 94,30% 95,39% 95,41% 94,69% 95,33% 93,81% 94,16%
Germany 93,12% 93,20% 93,74% 94,06% 94,03% 94,03% 93,81%
Norway 91,28% 91,97% 92,48% 92,20% 92,72% 93,17% 92,65%
Denmark 93,90% 92,56% 92,91% 92,22% 93,00% 92,62% 92,29%
Switzerland 91,21% 90,07% 90,82% 91,76% 92,04% 92,29% 92,17%
France 89,90% 90,42% 90,52% 90,76% 90,70% 90,35% 90,60%
Austria 87,97% 88,12% 87,94% 88,37% 88,40% 88,13% 89,05%
Sweden 88,29% 88,09% 88,09% 87,84% 87,00% 88,19% 89,03%
Belgium 86,78% 85,94% 87,71% 86,63% 87,80% 88,14% 88,64%
Czech Republic 91,73% 90,81% 91,81% 91,33% 90,23% 90,34% 88,36%
Iceland 86,67% 88,21% 88,84% 88,40% 86,25% 87,91% 88,12%
Netherlands 89,47% 89,58% 89,54% 89,25% 87,82% 87,81% 87,62%
Latvia 83,93% 86,75% 89,19% 86,82% 88,95% 86,17% 87,06%
Lithuania 69,29% 73,29% 83,93% 81,67% 80,75% 80,51% 84,32%
United Kingdom 86,98% 86,30% 86,09% 85,80% 85,11% 85,29% 83,88%
Malta 83,37% 82,91% 83,66% 83,12% 82,72% 83,18% 83,19%
Finland 83,29% 83,14% 83,71% 83,06% 82,74% 82,43% 83,10%
Bulgaria 79,57% 80,50% 82,10% 81,69% 80,22% 80,31% 81,04%
Spain 78,99% 79,69% 79,38% 79,97% 79,82% 80,14% 78,71%
Ireland 78,34% 77,02% 76,19% 74,88% 76,54% 79,35% 78,39%
Portugal 76,34% 76,43% 76,68% 76,70% 77,29% 78,84% 78,31%
Cyprus 72,04% 72,68% 74,69% 74,06% 77,48% 77,40% 77,48%
Italy 72,43% 72,29% 73,10% 73,50% 73,24% 73,92% 74,48%
Slovenia 74,22% 74,98% 76,46% 75,95% 74,81% 74,87% 74,33%
Poland 54,42% 57,70% 60,81% 62,13% 62,17% 63,34% 64,11%
Croatia 58,38% 60,53% 59,22% 57,80% 54,67% 54,38% 58,40%
Turkey 50,61% 51,79% 51,96% 50,54% 51,64% 52,34% 52,84%
Greece 49,57% 51,11% 52,26% 51,19% 49,41% 49,15% 46,77%
FYROM 46,20% 46,29% 45,69% 44,22% 41,92% 41,37% 42,66%
Romania 27,53% 27,82% 28,44% 28,82% 25,84% 27,46% 27,95%

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3.2.2. National standards for excavation

In construction industry it is common that each country has its own set of standards for construction works as
a benchmark for tendering and contracting. They are structured by the type of works and each is consisted by
generally described operations related to units such as needed material and quantities, workers with required
qualifications, number and normative time, and/or machines with normative time. For excavation works, most of
standards propose low-skilled (unqualified or less-skilled) workers because some special knowledge or skills for
manual excavation are usually not required. It is expected that healthy grown humans can execute the digging
technique simply by guiding instructions and then by work repetition. Croatian Normative and work standards in
construction (1999) in the excavation works propose two hours’ time for a cubic meter unit. The standards set by
the Croatian construction industry are very similarly structured to German standards (REFA analysis) as for
example investigated by (Plümecke and Kuhne, 2004) which propose an excavation time of 1.5 hours per unit.
As previously discussed, standards from India and Pakistan (Market Rate System, 2013) propose the excavation
time for a cubic-meter of soil to be 2.0 and 1.6 hours respectively. With a far location from the chosen countries,
New Zealand with its standards (Rawlinsons Construction Handbook, 2012) adapted a time of 2 hours, thereby
assuring the familiarity within the comparable data.

Table 2. Standard time for low-skilled workers to excavate one cubic-meter of naturally moist soil in average conditions

Standard time of low-skilled workers for earth excavation [hours/m3]

year Croatia Germany Pakistan New Zealand India
2013 2.10 1.50 1.06 2.0 2.0

3.2.3. Average costs of resource usage for earth excavation

According to the markets’ conditions, significant differences of average hourly labor costs were reported
among selected countries. These differences can be explained by the basic rule of economy, i.e. demand and
supply. It is truly logical that the cost of the low-skilled workers will decrease with the increasing number of
such workers. Surprisingly, New Zealand came on the top of the list with an hourly cost of low-skilled workers
to be equivalent to 15.13 Euros per hour. Germany, with different wages among different states came out with an
average cost of 11.05 Euros per hour. Croatia stood at an average hourly rate of 2.83 Euros per hour, while
Pakistan and India came out with the equivalent of 0.43 Euros as an average rate per hour for a low-skilled
worker in the construction sector.

Table 3. Statistical average hourly cost of low-skilled workers in construction sector for the year 2013

Average hourly cost of low-skilled workers in construction sector [€/hour]

year Croatia Germany Pakistan New Zealand India
2013 2.83 11.05 0.43 15.13 0.43

Authors have for this research chosen the most suitable hydraulic excavator for the mentioned excavation and
which is globally accessible. It can be defined as semi weight hydraulic excavator on wheels, weight of the
machine 14 tons, with the power of 70kW and with bucket’s capacity of 0,86m3.

Table 4. Hourly cost of usually type of excavator for excavating a wide shallow pit

Hourly cost of excavator q=0,86m³ [€/hour]

year Croatia Germany Pakistan New Zealand India
2013 70 75 21 93 39

In table 4 hourly costs are average on the market in each analyzed country. Similarly, the study observed a
variation among the hourly costs of excavators to be used on construction grounds. This variation is due to
several factors which may include fuel costs, rental charges of equipment and hourly costs of the operator
required to complete the desired operation. New Zealand was marked on the top of the list with the hourly costs
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of an excavator to be equivalent to 93.00 Euros. Germany and Croatia stood at the hourly cost of 75.00 and
70.00 Euros, respectively. India was fourth on the list with equivalent costs of 39.00 Euros per hour while
Pakistan got the bottom place among the selected countries with equivalent costs of 21.00 Euros per hour for an
excavator.

4. Comparative analysis

The expected or planned time of excavation by hydraulic excavator with a bucket capacity of 0.86 m3 is
calculated by formula (1). This is assuming the same excavation and soil type, same average site condition as for
the manual excavation. The expected time results in around 0.013 hours per cubic meter, calculated in
accordance with the basic production formula for the hydraulic excavators (Peurifoy et al., 2006):

Expected time = T / (3600 x Q x c) [hours/m3] (1)

T cycle time [seconds]

Q heaped bucket capacity [m3]
c corrective coefficient which includes external and internal influences on the excavation (taken as 0.6).

Table 5. Comparison of the number of workers needed to match production of 1 excavator and their hourly cost

New
Description Croatia Germany Pakistan India
Zealand

number of workers required to replace 1 excavator 162 115 82 154 154

hourly costs of the needed number of workers [€/hour] 458.46 1,270.75 35.26 2,330.02 66.22

hourly costs of the excavator [€/hour] 70 75 21 93 39

In table 5 it is shown the machine/labor ratio which indicates the disproportion of this ratio in the world and
explains the differences in the decision between the manual and machine excavation in developed and
developing countries.

Figure 3. Comparison between costs of excavator and workers required to achieve the same productivity

Comparisons are now presented in Table 5 and Figure 3, respectively. Table 5 interprets the required number
of low-skilled workers to match or replace the production capacity of one excavator, whereas Figure 3 represents
the hourly costs of one excavator in comparison with the total number of low-skilled workers required to
perform the same work item. It is evident from this comparison that economies with a surplus amount of low-

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skilled labor within the construction sector might perform the studied excavation task by manual means, wherein
the little extra costs as compared to that of an excavator will generate more labor-hours of employment. This
might result in a better social harmony and thereby enabling the workers to fulfill basic necessities in the society
which would have been in much danger in the case of technology adoption. In order to reach the target of
meeting increased labor participation goals, construction contractors have to adopt the use of low-skilled labor to
execute excavation works, which is a most common activity in construction of any facility. Likewise, developed
economies can easily adopt the technology options in order to follow a more economically viable solution.

5. Conclusions and discussion

Low-skilled labor marks a significant part of the construction sector, performing daily production tasks that
don't require specific technical knowledge or confirmed skills. Hand-work, excavations, material transfers or
repetitive tasks are typical unskilled labor positions. Low-skilled laborers are usually hired on day-to-day basis,
or seasonally, directly by contractors or through employment services where workers wait for daily employment.
Today the construction market demands an increasing skill level. Many jobs that were once considered unskilled
labor now demand some kind of formal skills. The jobs that require unskilled labor are continually decreasing
due to technological and societal advances. Jobs that previously required little or no training now require training
– manual work today is assisted by different kinds of technology, requiring the worker to acquire necessary
technological skills. Unemployment and increasing numbers of low-skilled workers are serious problems of most
developing countries, but developed countries are affected as well due to work migrations. As stated in the
beginning of the paper, there is high potential for some valuable and more in-depth analysis regarding the
integration of low-skilled workers. Up to now and without this thorough research, it is yet hard to understand and
predict labor market of highly populated countries. In days of high work migration and rising number of workers
which have no or low-skills, engineering optimization should be revised and aware of the current social
situation.

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