This business type was last covered in Business Values Newsletter No. 89 back in October 2005. Labour hire has continued to grow as an industry in recent years. It fits well with the modern economy where businesses often adopt a model of having a core number of staff and then using temporary staff to help cope with fluctuating work volumes.
Whilst the demand for labour hire services has fallen in 2019/20 due to COVID-19, the longer-term outlook is for continued growth.
CURRENT INDUSTRY CLIMATE
Labour hire firms provide temporary staff to clients on a fee or contract basis. The industry remains segmented with the largest major business only generating around 5% of industry revenue.
In 2019/20 industry revenue was $25.7 billion. There was a good level of annual growth in the three years up until 2019, averaging around 8% per annum, but this fell sharply in 2019/20 due to the coronavirus pandemic. The strong growth in years prior to 2019/20, was largely driven by two factors: