What Is Your Temp Labor Program Really Costing You? A New ROI Calculator for Contractors

Most contractors know their annual temp labor spend. Far fewer know what that spend costs once you add supplier markups, the internal staff who chase timesheets and invoices, and the side costs like per diem, payroll services, and conversion tracking. Smart Labor Management (SLM) built the Temp Labor Savings Calculator to answer that question. It takes a few minutes and shows contractors the real ROI of their labor spend, and what the same program could look like with SLM. 

This matters more now than it did a few years ago. Associated Builders and Contractors estimates the industry needs to bring in about 349,000 additional workers in 2026 to meet demand (ABC, January 2026). With permanent hires that hard to find, temp labor has gone from a stopgap to a standing line item for many GCs and self-performing subs, especially on data center, mission-critical, and industrial work. When a cost gets that big, it's worth knowing exactly where the money goes. 

Why Temp Labor Costs Are Hard to See 

On paper, temp labor looks simple: hours times bill rate. In practice, the cost is spread across several places that rarely show up in one report. 

The first is supplier markup. Every staffing supplier bills a markup over the worker's wage, and when you're working with three, five, or ten suppliers across multiple job sites, those rates drift. Few contractors have one view of what each supplier charges for comparable trades. 

The second is internal overhead. Someone in your organization is requesting workers, checking credentials, reconciling timesheets against invoices, fixing cost codes, and resolving disputes with each supplier. That's real payroll, and it usually sits in operations or accounting rather than being charged against the labor program. 

The third is the long tail of program details: per diem payments to traveling workers, a separate payroll provider for temps, and manual spreadsheets tracking hours toward temp-to-hire conversion. Each one is small on its own. Added together, they're easy to underestimate. 

How the Temp Labor Savings Calculator Works 

The calculator walks through those three areas in order. 

Program basics. You enter your annual temp labor spend, the number of staffing suppliers you work with, and your average supplier markup. You then set an estimated markup reduction with SLM. Based on SLM placement data and published industry benchmarks, the typical range is 5 to 7%, and the calculator defaults to 6%. You can adjust it if you want a more conservative estimate. 

Internal admin overhead. Enter how many staff members manage temp labor and their fully loaded cost. This is often the eye-opener. The default inputs are two staff members at $85,000 each, so that's $170,000 a year spent just administering the program, before a single worker sets foot on site. 

Additional program details. Three toggles cover costs that tend to fall through the cracks: whether you offer per diem, pay a separate provider for temp payroll services, or manually track hours toward temp-to-hire conversions. 

Click Calculate My Savings and the tool shows your estimated savings. Your numbers stay on your screen, and nothing is submitted unless you choose to request the full report, so you can test different scenarios freely, such as adding a supplier, raising spend for next year's backlog, or tightening the markup assumption. 

What SLM Changes 

The savings the calculator estimates come from how SLM is built. SLM is a temp labor command center that combines people and platform: an experienced program team running purpose-built software that SLM owns, so contractors can request, track, and bill temp labor across every supplier in one place. 

In practice, that means one coordinated program in place of separate supplier relationships. Labor costs post to project cost codes for accurate budget tracking. Credentials and OSHA compliance are verified before a worker is deployed. Time is captured with geofencing at the jobsite, and multi-site reporting gives operations and finance the same view of temp labor. You also get a dedicated account team that handles implementation, training, and day-to-day support, so your internal staff isn't left running the program alone. 

One point that surprises a lot of contractors: you don't have to replace the suppliers you already rely on. SLM brings them into one program. The savings come from lower markups, less administrative work, and fewer things slipping through the cracks. 

The Takeaway 

If temp labor is a standing part of how you staff work, it deserves the same scrutiny as materials or equipment. Start with three numbers: what you spend, what you pay in markup, and how many of your people spend their week managing it. The calculator puts those numbers side by side and shows where the savings are. 

See how much you could save with SLM → https://www.smarterlabor.com/roi-calculator