Stop Guessing: The Right Way to Budget for 2026's Temporary Workers

For organisations that rely heavily on temporary labour, accurate workforce budgeting is one of the biggest challenges. Many procurement and HR teams still approach budgeting for temporary workers with guesswork, leading to overspend, operational bottlenecks, and missed hiring targets.
As 2026 approaches, it’s more important than ever to adopt a structured, data-driven approach to budgeting. This blog will guide procurement teams through the steps to plan, forecast, and manage temporary labour budgets effectively, helping avoid surprises and optimise workforce spend.

Why Traditional Budgeting Methods Fail for Temporary Labour
Many organisations rely on historical spending to plan for temporary workforce budgets. While past data is useful, it rarely reflects real-time changes in demand, market rates, or workforce fluctuations. Common pitfalls include:

• Overestimating or underestimating temporary headcount

• Ignoring seasonal or project-based fluctuations

• Failing to account for agency fees, compliance costs, and payroll variations

These challenges can leave procurement teams scrambling to adjust mid-year, increasing costs and creating operational inefficiencies.

The solution is adopting a strategic approach to budgeting for temporary workers, which goes beyond simple forecasts and incorporates data-driven insights and flexible planning.

Step 1: Understand Your Temporary Workforce Needs

Before any budget is drafted, organisations need a clear picture of their temporary workforce. Key questions to consider include:

• What roles are most frequently filled by temporary staff?

• How many temporary workers are required per department or project?

• Are there predictable seasonal peaks or troughs?

• What skill levels are needed for different assignments?

Gathering this data allows procurement and HR teams to anticipate demand, avoid overstaffing, and allocate budgets where they are most needed.

Step 2: Calculate True Costs Beyond Wages

Budgeting for temporary workers is not just about the hourly rate. Total cost of labour includes:

• Agency fees and service charges

• Payroll taxes and benefits (if applicable)

• Onboarding and training costs

• Compliance and insurance obligations

Failing to account for these costs can make your budget unrealistic, leading to overspend or unexpected deficits. Organisations that consider the full cost of temporary labour can make more accurate financial projections and plan for contingencies.

Step 3: Use Data to Forecast Demand and Costs

Data-driven forecasting is a game-changer for temporary workforce budgets. Start by analysing:

• Historical spending trends by department or project

• Agency usage patterns and fill rates

• Seasonal or cyclical demand variations

• Market rates for different skill levels

Using this data, procurement teams can create realistic budgets for each department or business unit. Forecasting also helps identify potential bottlenecks or high-cost periods, allowing for proactive planning.

Step 4: Build Flexibility Into Your Budget

Temporary labour needs are rarely static. Projects, seasonal peaks, and unexpected turnover mean that rigid budgets can quickly become outdated. Best practice includes:

• Setting aside a contingency fund for unplanned demand

• Using variable cost models rather than fixed allocations

• Collaborating closely with finance, HR, and operations to monitor spending

Flexible budgeting ensures your organisation can respond to changing workforce needs without sacrificing quality or compliance.

Step 5: Standardise Processes Across Your Supplier Network

Organisations using multiple agencies often face inconsistencies in pricing, billing, and reporting. Standardising processes across your supplier network can:

• Improve visibility into spending

• Reduce errors and discrepancies

• Enable comparison of agency performance and cost-effectiveness

Centralised management of suppliers helps procurement teams maintain control over budgets while keeping the temporary workforce pipeline flowing efficiently.

Step 6: Review and Adjust Regularly

Even with the most detailed planning, workforce budgets should be reviewed and adjusted throughout the year. Regular budget reviews allow teams to:

• Identify overspending early

• Reallocate funds to high-demand areas

• Adjust for changes in market rates or labour availability

• Ensure compliance with internal policies and financial regulations

Continuous review is a key part of successful budgeting for temporary workers and prevents last-minute surprises at year-end.

How Datum RPO Can Help

At Datum RPO, we specialise in helping organisations take the guesswork out of temporary workforce budgeting. Our neutral Vendor Managed Service simplifies agency management, providing:

• Centralised visibility across all temporary labour suppliers

• Accurate tracking of spend and workforce utilisation

• Standardised reporting and compliance across your supplier network

• Flexible workforce planning to adapt to seasonal or project-based demand

With Datum RPO, procurement and HR teams can focus on strategic workforce decisions instead of juggling multiple agencies. We help organisations forecast accurately, optimise budgets, and ensure temporary labour spend is fully controlled and transparent.

Conclusion

Stop guessing and start planning. Accurate budgeting for temporary workers requires understanding workforce needs, calculating total costs, forecasting demand, building flexibility, standardising supplier processes, and reviewing budgets regularly.

By taking a structured approach and leveraging expert support like Datum RPO’s neutral Vendor Managed Service, organisations can control costs, reduce risk, and ensure temporary labour needs are met efficiently. As 2026 approaches, now is the time to take a strategic, data-driven approach to temporary workforce budgeting.