Workforce, Labor Standards & Skills Planning worked example

Contractor Labor Comparison at 99% billable utilization: a worked example

This scenario runs the contractor labor comparison calculation on the strong side: 99% billable utilization, with every other input held at its documented default. An operations lead deciding whether to outsource a specialized maintenance overhaul to a contractor or pull it in-house.

The inputs for this scenario

  • Contract Hours Quoted: 320 hrs (unchanged)
  • Contractor Hourly Rate: 65 $/hr (unchanged)
  • Billable Utilization: 99 % (raised for this scenario; the documented default is 88)
  • Mobilization Fee: 2,500 $ (unchanged)

Working through the calculation

  • Applying the documented formula (Contractor cost = contract hours x hourly rate x billable utilization% + mobilization fee) to the inputs above produces each figure below.
  • At this operating point the engine returns 23,092 $ for total contractor labor comparison cost, the number this scenario is built around.
  • At this operating point the engine returns 72.16 $ / piece for contractor labor comparison cost per unit.
  • At this operating point the engine returns 20,592 $ for variable contractor labor comparison cost.
  • At this operating point the engine returns 2,500 $ for fixed contractor labor comparison adder.

How this compares with the baseline

  • Against the tool's baseline example, where billable utilization sits at 88% and the headline result is 20,804 $, this scenario comes in 11% above the baseline at 23,092 $.
  • Use it when evaluating a contractor quote for a shutdown, capital install, or overflow production and you need an apples-to-apples cost per hour to compare against loaded internal labor. Treat this as a target state: the delta against the baseline quantifies what the improvement is worth before you commit to chasing it.

Results at a glance

  • Total contractor labor comparison cost: 23,092 $ (headline result)
  • Contractor labor comparison cost per unit: 72.16 $ / piece
  • Variable contractor labor comparison cost: 20,592 $
  • Fixed contractor labor comparison adder: 2,500 $

Run it with your numbers

  • Every input above is editable in the live Contractor Labor Comparison calculator, which recalculates instantly and can be shared with the inputs intact.

Last reviewed 2026-05-12.