Labour hire vs recruitment comes down to one question: who employs the worker? In labour hire (also called on-hire), the provider stays the legal employer and you direct the work on site. In recruitment, the provider finds and screens the candidate, then the candidate becomes your direct employee. Which one you want depends on how long the work runs, how much control you need, and whether you’re happy carrying the employment obligations yourself.
Labour hire (on-hire): the provider stays the employer
With labour hire, the worker is employed by the labour hire provider, not by your business. The provider handles the worker’s payroll and WHS obligations as their employer, then places the worker on your site to work under your day-to-day direction. You get someone doing the job; the provider carries the employment relationship.
“On-hire” is the same arrangement under a different name. You’ll see it used in industrial relations and workers’ compensation contexts to describe a worker who is employed by one business (the labour hire provider) but working under the direction of another (the host business, that’s you). If a job ad or a contract says “on-hire”, it’s describing labour hire, not a different product.
This model suits short-term, seasonal or project-based work, and situations where you need someone on site fast without taking on a new direct employee. It also gives you flexibility to scale a crew up or down as a project moves through its phases, without going through a separate hiring and termination process each time.
Permanent recruitment: the candidate becomes your employee
Permanent recruitment works differently. The provider’s job is to find, screen and present suitable candidates for a role you’re hiring for directly. Once you make an offer and the candidate accepts, they go on your payroll as your employee. The provider’s involvement ends at placement; from that point, you carry the same employment obligations as with any other member of your permanent team.
This model suits roles you expect to be part of your business long-term, where continuity, training investment and being embedded in your team matter more than short-notice flexibility. It’s a search-and-placement service, not an ongoing employment arrangement: once the candidate joins your business, the employment relationship is between you and them. See permanent recruitment for more on how that process works.
The practical differences that actually matter
Strip away the terminology and labour hire vs recruitment comes down to three questions:
- Who’s the legal employer? Labour hire/on-hire: the provider. Permanent recruitment: you, from day one.
- How long is the work? Labour hire/on-hire suits short-term, seasonal and project work. Permanent recruitment suits an ongoing role.
- Who carries the admin? With labour hire, the provider manages the worker’s payroll and WHS obligations as their employer. With permanent recruitment, that responsibility sits with you once the candidate joins your business.
A lot of sites use both at once: a core permanent team for the roles that don’t change, and labour hire crews brought in and scaled to match the workload on top of that. Neither model is a like-for-like swap for the other; they solve different staffing problems.
Labour hire vs recruitment: which one should you use?
If you need someone on site this week for a defined stretch of work, or you want to flex crew size as a project moves through its stages, labour hire is the fit. If you’re building out a permanent role in your business and want to own the employment relationship from the start, permanent recruitment is the better tool. Plenty of employers use both, matched to the job rather than picked as a default.
If you’re not sure which fits the work you’ve got coming up, tell us what you need on site and we’ll talk you through the right model for it.
