Labour Hire vs Recruitment Agency vs Direct Hire: Which Fits Your Project?
- Mateusz Claude
Three ways to get workers on your site, three completely different cost structures. Pick the wrong one and you either carry wages between projects or lose six weeks to a recruitment process for a role you needed last Tuesday. Here’s how to choose, based on what your programme actually looks like.
The three models in one minute
Labour hire: the workers are our employees, on your site, under your direction. You pay an hourly rate that includes wages, super, insurances and payroll. Scale up or down with a phone call.
Recruitment: an agency finds you a permanent employee. You pay a placement fee, then the person is on your books with everything that comes with that.
Direct hire: you run the ads, the interviews and the onboarding yourself. Cheapest per hour on paper, most expensive in management time.
When labour hire wins
Project-based demand. If your headcount needs to follow the programme, labour hire converts a fixed cost into a variable one. It also wins on speed (24 to 48 hours instead of 4 to 8 weeks), on compliance (tickets verified before day one), and on risk (a worker who isn’t right gets replaced, not managed out). It’s the right tool for peaks, shutdowns, gap-fills and any role you need for months rather than years. For roles like hoist drivers or confined space crews, where the need is intense but temporary, it’s usually the only model that makes sense.
When recruitment wins
Permanent, ongoing roles that sit at the core of your business. A full-time site manager, a permanent workshop foreman. If the role will exist in two years, recruit for it. Worth knowing: many clients use labour hire as a working interview, then convert. A temp-to-perm arrangement lets you watch someone on your site for three months before you commit.
When direct hire wins
You have time, an HR function, and a strong pipeline of candidates. For trades in Sydney right now, that’s a big if. Every week a role sits vacant costs more than the recruitment margin you’re saving, and you carry all the compliance and payroll workload yourself.
The comparison that matters: fully loaded cost
An employee’s real cost is wages plus super, workers comp, payroll tax, leave liabilities, redundancy exposure and the dead time between projects. A labour hire rate looks higher per hour because all of that is already inside it. Compare loaded cost against loaded cost over your actual programme length, and the answer usually picks itself.
Frequently asked questions
Can I take on a labour hire worker permanently?
Yes. Temp-to-perm is common and we’d rather you kept a good worker than lost them. Talk to us about the arrangement up front.
Who handles safety and supervision?
Labour hire workers work under your site supervision and safety systems, and we make sure they arrive inducted in ours: verified tickets, PPE, and crews used to Tier-1 SWMS.
What notice do I need to scale down?
Bookings flex with your programme. No lock-in contracts; tell us when the requirement ends.
Not sure which model fits your project? Call 02 8015 6150, describe the role and the programme, and we’ll tell you honestly, including when recruitment is the better answer.