Measuring the ROI of Contractors: A 10-Step Guide for Enterprises

For Australian enterprises, the shift toward hiring contractors isn’t just a trend—it’s a strategic move driven by tangible financial and operational benefits. But to truly capitalise on those benefits, it’s essential to go beyond assumptions and measure the return on investment (ROI) in a structured, data-driven way.

At Oncore, we’ve spent over two decades helping organisations design and run highly effective contingent workforce programs that deliver measurable outcomes. This 10-step guide outlines how to assess the real value of your contractor workforce—and ensure your investment is working as hard as they are.

👉 For a full framework on how to design a high-performing contingent workforce program, explore our pillar guide here.

Here’s a step-by-step guide to measuring the ROI of hiring contractors:

1.   Define the Objectives

Before calculating ROI, get clear on your goals. Are you covering a skills gap, managing seasonal spikes, reducing overheads, or speeding up innovation? Defining this upfront gives context to the ROI and sets expectations for success.

2.  Calculate the Direct Costs:

Map out every cost involved in engaging contractors::

• Contractor pay: Hourly, daily, or project-based

• Recruitment fees: Costs to source and hire

• Tech stack: Platforms for timesheets, invoicing, and payments

• Outsourced services: Third parties managing aspects of the contractor program

• Operational overheads: Workspace, equipment, and software tools

3.   Measure the Cost Savings:

Hiring contractors can offset several fixed costs:

• Recruitment: Faster hires, fewer long-term costs

• No entitlements: No need to cover paid leave, super, or benefits

• Training: Contractors bring ready-to-go expertise

• Flexible payments: Only pay for work when needed, ideal for fluctuating demand

4.   Assess Productivity and Efficiency

Contractors with niche skills often complete tasks faster and more effectively than generalist permanent staff. Factor in time-to-completion and quality of output when evaluating value

5.   Factor in Opportunity Costs

Looking at the bigger picture - what opportunities might you miss if you don't hire contractors? Missing specific market opportunities, late launches, missed tenders, and stalled projects can all represent significant lost value.

6.   Gauge Flexibility and Risk Mitigation

Contractors enable quick scaling up or down—crucial during uncertain times. They also help reduce long-term commitments, giving businesses more agility without the the long-term commitment and costs associated with permanent employees.

7.   Consider the Intangible Benefits:

• Fresh perspective: Diverse experiences drive innovation

• Fast onboarding: Contractors adapt quickly

• Extended network: Many bring valuable industry connections

These non-financial benefits often contribute to ROI indirectly—especially on strategic initiatives.

8.   Calculate the ROI:

To get the ROI percentage:

Net Benefits = Total Value Generated by Contractors (both tangible and intangible) - Cost of Hiring Contractors.

Where possible, assign monetary values to outcomes like faster delivery, improved output, or avoided risks.

9.   Continuously Review

ROI isn’t a set-and-forget metric. Business needs evolve, so regularly review contractor performance, cost-effectiveness, and alignment with goals to stay in control.

10. Leverage a Contractor Management Company

Partnering with a contractor management expert like Oncore gives you the visibility and control needed to optimise ROI:

• Focus on your core: We handle contracts, onboarding, and compliance

• Streamline operations: Centralised billing and reporting

• Reduce risk: Stay compliant with tax, legal, and classification requirements

• Improve cost efficiency: Pay accurately and avoid hidden overheads

For more on building an agile, compliant contractor model, visit our pillar page on effective contingent workforce programs.

Final thoughts

Contractors offer agility, speed, and specialised talent—often with a favourable ROI. But to truly make them a strategic advantage, enterprises must measure performance, manage costs, and review outcomes regularly.

Oncore Contractor Management Services can help you get there. From visibility to compliance to cost tracking, we ensure your contractor engagements are ROI-positive and future-ready.

💡 Real-world impact: See how Oncore helped Allianz manage over 500 contractors, saving 2,000 hours and delivering impressive ROI gains. Read the case study →