Labour Hire vs Direct Hire
Builders often think labour hire is more expensive than hiring direct. The full cost analysis tells a different story.
Direct Hire True Cost
Base wage + super (11.5%) + workers comp (3-8%) + payroll tax (5.5%) + leave provisions (annual, sick, long service = ~15%) + recruitment time + onboarding + PPE + admin. Total: 35-50% above base wage.
Labour Hire Cost
One all-inclusive hourly rate. Typically 25-40% margin above base wage. BUT: no recruitment time, no leave liability, no workers comp risk, no admin, instant scaling, replacement guarantee.
When Labour Hire Wins
Short-term needs. Scaling up/down. Urgent hires. Testing before permanent hire. Project-based work.
When Direct Hire Wins
Long-term core team members. Key supervisory roles. Workers you’ve already proven through labour hire.