What is Level of Effort (LOE)? Plus, 5 Tips for Effort Estimation

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Level of effort (LOE) is a project management term that refers to a specific type of project activity called support activities. Support activities do not yield deliverables, but rather fuel tasks that do. Therefore, the level of effort is how much work these tasks will take to complete.

This work can take many forms, such as updating project documents, maintaining equipment, submitting expenses, etc. The unifying characteristic of this work is that it must be done regularly to support a greater task.

Level of Effort Examples

The best way to understand level of effort is by looking at common support activities that take place in almost any project. We’ve a few level of effort examples below.

Managing Stakeholders

Stakeholder management is the art of creating strong relationships between everyone involved in a project. Good stakeholder management requires constant communication and transparency. Depending on the scope and size of the project, the level of effort for stakeholder management activities will go up and down, and it is important to be aware of how much energy it will take. Stakeholder management includes sending regular updates, scheduling meetings, hosting calls, creating documents, etc.

Updating Reports

All projects require thorough documentation in the form of project reports. These reports should be created throughout the project lifecycle to check progress and compare it against the project plan. One common example is a budget report. To create an accurate budget report, you must keep up with supporting activities like submitting receipts and expenses, communicating with stakeholders, recording cost changes, etc.

Communicating with Customers

Depending on the project, communicating with customers can be very important. If, for example, you’re scoping for a product update, it’s key to talk with customers about what they’d like to see improved and/or changed. This includes sending out emails, requesting reviews, posting surveys and making phone calls.

Why Is Calculating the Level of Effort Important?

Effort is a resource like anything else. When we think about resources, our minds go to tangible things like money and materials, but it is just as important to consider effort.

As you can imagine, achieving some deliverables will require more work than others. This means they have a higher level of effort, but it doesn’t necessarily mean they need to be more difficult. In fact, when we know the LOE for deliverables, you can anticipate how much work tasks will require and be better prepared.

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When Should LOE Be Calculated?

The level of effort should be calculated during the planning phase of a project when tasks are being created. Tasks with a higher level of effort require more work to be completed. Generally, this work takes place at regular intervals throughout the task or project, so it’s important to understand how much total effort it will require.

Establishing the level of effort during the planning phase helps spread workload evenly and allows for a more accurate schedule. If certain team members are assigned to too many high LOE tasks in their workflow, it may be time to redistribute tasks.

What Is Effort Estimation?

In order to know a task’s LOE, you must practice something called effort estimation. Effort estimation is the process through which we approximate how much time, energy or money deliverables will demand so that we can rank this on a scale.

Effort estimation is one the core components of project estimation, along with resource estimation and cost estimation. These estimations are the foundation of sound project planning. The more accurate your estimations are, the more accurate your overall project plan will be, and the fewer variances you will need to deal with.

Related: Free Project Estimate Template for Excel

Effort Estimation Examples

Effort estimation is how we quantify the LOE for different deliverables and the tasks they call for. Depending on the team, project, project leader or organization, effort may be estimated differently. But, regardless of the effort estimation method, all of the examples below involve the team sitting down to discuss and decide on the level of effort as a group.

During the project planning phase and the project planning meeting, you will create tasks to support this project and its deliverables. When the tasks have been created, it’s time to decide their level of effort via effort estimation. In other words, how much time and energy (in the form of support activities) will each task require? Here are a few common ways many teams do so:

  • Rank by Priority: It’s always a good idea to get the team on the same page about the priority of tasks. One way to do this is by having them assign each task a level of priority in the form of a number. Then, tasks can be listed in order of highest priority or lowest priority. The higher priority a task is, the higher level of effort it may require to get it done.
  • Sort into Categories: Another helpful method for estimating effort is to sort tasks into predetermined categories, such as low, low-mid, mid, high and highest priority. Sorting them into these “boxes” is a helpful way to compare tasks with one another and estimate which will be more or less effortful.
  • Assign Numerical Value: Perhaps the most clear-cut method of effort estimation is assigning each task a numerical value on a predetermined scale. Many teams use the default 1-10 scale, but it’s not uncommon to see smaller or larger scales. When a scale has been set, individual team members will then assign tasks values and compare their estimations with each other. Together, the entire team will come to a consensus on where each task should fall on the scale.

An Example of a Level of Effort Scale

There are many different methods to begin the effort estimation process. Teams may even choose to use more than one of these methods and combine their results. Once they have come to a final decision, they must display their decisions via tasks plotted on a scale.

This scale should be used to show LOE for all tasks in comparison to one another. Different projects may use different forms of level of effort scales depending on their size, scope and other characteristics. This is fine, so long as the team understands the level of effort scale being used and the criteria for plotting tasks on the scale is consistent.

How to Calculate Level of Effort

Now that we’ve looked at how to calculate the level of effort conceptually, let’s look at a real-world example in the context of a simple project. Imagine managing a project to improve communication between employees working remotely, and use these three steps to determine LOE:

  1. Decide how accurate your estimates must be: Accuracy is always important, but some projects demand a higher level of accuracy than others. It can help to look at the big picture by examining deliverables and deciding how flexible your LOE projections can be. In this case, we can safely say there should be moderate accuracy, but some differentiation won’t cause project failure.
  2. Use an effort estimation technique: At this point in the project, you will have created your task list. Now it’s time to use one of the three methods discussed above to do effort estimation for each task. There are, of course, many other methods you can use, so long as you’re using the same metric to measure all tasks in a project. Additionally, don’t forget to take general management and upkeep hours into account because most support activities don’t have a firm stop until the project is complete.
  3. Add values to the LOE scale: When you’ve completed effort estimation for tasks, each should have a number or be sorted into a category. From this point, you can rank them from the lowest level of effort to the highest level of effort. Now the entire team can reference this when approaching tasks, and the project manager can see tasks from a different viewpoint.

How ProjectManager Helps with Level of Effort

ProjectManager gives users everything they need to calculate level of effort and put that information to work. Because ProjectManager is a cloud-based solution that updates automatically, you’re always working with the most current data. This eliminates any worry that things like level of effort may not be up to date.

Calculating level of effort can include accounting for things like how many team members should be assigned to a task, how many resources are required, how many hours tasks will take and more. With ProjectManager, all of this information lives in the task itself. It also entails determining which tasks require supporting activities. These supporting activities can then be added to our task management features.

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Check Progress to Stay on Track

Check task progress, hours worked and assignees, all from the project dashboard, kanban boards or task lists. Then, check timesheets to see how long similar tasks took in the past and make better predictions for the future.

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When running an agile project, you need tools to support your sprints. ProjectManager is a cloud-based project management software with powerful task and resource management features that can help you ensure your team is never overloaded. See how ProjectManager can assist with your estimations by taking a free 30-day trial today.

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