Workforce, Labor Standards & Skills Planning worked example

Contractor Labor Comparison at 63% billable utilization: a worked example

Here is what the math looks like when conditions slip. We hold every other input steady and drop billable utilization to 63%, then walk the calculation through step by step. Compare the true delivered cost of an outside contractor against in-house labor by accounting for rate, productive utilization, and mobilization.

The inputs for this scenario

  • Contract Hours Quoted: 320 hrs (held at the documented default)
  • Contractor Hourly Rate: 65 $/hr (held at the documented default)
  • Billable Utilization: 63 % (the input this scenario stresses; the baseline uses 88)
  • Mobilization Fee: 2,500 $ (held at the documented default)

Working through the calculation

  • The calculation starts from the formula this tool documents: Contractor cost = contract hours x hourly rate x billable utilization% + mobilization fee.
  • Total contractor labor comparison cost works out to 15,604 $ at these inputs, and this is the headline figure for the scenario.
  • Contractor labor comparison cost per unit works out to 48.76 $ / piece at these inputs.
  • Variable contractor labor comparison cost works out to 13,104 $ at these inputs.
  • Fixed contractor labor comparison adder works out to 2,500 $ at these inputs.

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 25% below the baseline at 15,604 $.
  • The practical read: the gap between this scenario and the baseline is entirely attributable to billable utilization, so recovering it is worth quantifying in dollars before considering equipment or staffing changes. It treats utilization as a flat multiplier and does not model overtime tiers, per-diem escalation, or productivity differences between the contract crew and your own operators.

Results at a glance

  • Total contractor labor comparison cost: 15,604 $ (headline result)
  • Contractor labor comparison cost per unit: 48.76 $ / piece
  • Variable contractor labor comparison cost: 13,104 $
  • Fixed contractor labor comparison adder: 2,500 $

Run it with your numbers

  • To rerun this with your own numbers, open the live Contractor Labor Comparison calculator, set billable utilization to your actual value, and adjust the remaining inputs to match your operation.

Last reviewed 2026-05-12.