This seems that it could be more of a matter of personal preference...
Typically in tables, the units are either added in the column heading, or in every cell (as you have done for the last column).
When the latter is done, users will begin to ignore the extra characters as they become familiar with the system, so the focus becomes more about instant legibility. This is why in the last example I deliberately add extra characters for the edge-case, as it would make the cell would look noticeably different and a user would focus on it more than "usual".
In option 1 the times are quite clear, but could the leading-zero create minor confusion for some users.
At a glance the final column could be misinterpreted, reading as "four minutes past two, AM)
To counter this, perhaps simply removing the leading-zero could help here:
Option 1 alt:
Avg. Project Duration
8:04
I find the "h" a little moot in option 2, and would likely opt more for option 1, but if option two ended up being the prevailing preference, it could be modified slightly:
Option 2 alt:
Avg. Project Duration
8h 4m
Adding both "h" (hours) and "m" (minutes) could lead to a more easily extensible solution. Consider the following:
A task has taken far longer than anticipated, taking days of effort (or even time has been tracked erroneously)
Currently the UI would look like:
26:04 h
If the time is not an error and the colleague has indeed spent several days on one task then the above certainly looks strange. A user may have to work out the total time taken (if not already obvious like in the example), but if "Option 2 alt" were adopted, it could be easily extended like so:
1d 2h 4m
TL;DR
- Option 1 without the leading zero
- Option 2 could favour quick legibility, providing time doesn't go beyond "24 hours"