Labour Hire vs Permanent Staff

22 / 09 / 2026

When warehouse managers weigh up labour hire vs permanent staff, the answer is rarely one or the other. The best-run sites in Sydney usually have a stable core of permanent employees with a flexible layer of labour hire on top. The real question is where to draw the line — and that depends on how predictable your volume is.

This guide compares the two on cost, flexibility, risk and admin, and gives you a simple way to decide.

Permanent staff

Hiring warehouse staff directly gives you control over who you hire, how you train them, how you roster them and how you build your team culture.

Permanent hiring works well when:

  • The role is needed year-round at a steady volume
  • The work requires deep knowledge of your systems, customers or products
  • You want to develop people into leading hands and supervisors
  • You have the HR and payroll capacity to recruit, onboard and manage staff

The trade-offs:

  • Recruiting takes time — advertising, screening, interviews, reference checks and onboarding
  • Payroll, super, workers compensation, leave and award compliance sit with you
  • If volume drops, you carry the cost of a team sized for peak
  • If someone resigns or is off sick, filling the gap is your problem

Labour hire

With warehouse labour hire, the agency is the employer. They recruit, screen, pay and insure the worker, and you pay an hourly charge rate for hours worked on your site.

Labour hire works well when:

  • Volume moves with seasons, promotions or client contracts
  • You need cover for absences, leave or no-shows
  • You’re starting a new contract or site and don’t yet know steady-state headcount
  • You want to trial a worker before offering a permanent role
  • You don’t want management time tied up recruiting for high-turnover roles

The trade-offs:

  • The hourly charge rate is higher than a direct wage, because it covers the agency’s employment costs and margin
  • Workers are less familiar with your site at first, unless you build a consistent pool
  • You still share work health and safety duties for workers on your site (see our guide to labour hire WHS responsibilities)

Not sure what mix suits your site? ASTAR can look at your volumes and recommend a core-and-flex model. Call 1300 562 562 or send us an enquiry.

Labour hire vs permanent staff costs

A permanent employee’s hourly wage isn’t their true cost. Add superannuation, payroll tax, workers compensation, leave, recruitment, onboarding time and the cost of covering absences, and the gap between a wage and a labour hire charge rate is smaller than it looks. Our breakdown of labour hire rates in Sydney explains what sits inside a charge rate.

The bigger cost is usually a mismatch: paying a permanent team sized for December through a quiet February, or losing a client’s delivery window because you couldn’t staff up fast enough.

How to decide

Look at your headcount over the last 12 months, week by week.

  • The level you never drop below is your core. Permanent staff usually make sense here.
  • Everything above that line — peaks, promotions, leave cover, absences — is where labour hire earns its keep.

If that line keeps rising, it’s a signal to convert some of your best labour hire workers into permanent roles. Many warehouses use labour hire as a way to find and trial their future permanent staff.

FAQs

Is labour hire cheaper?

Per hour, the charge rate is higher than a wage. Once you add employment on-costs, recruitment, leave and the cost of carrying unused staff in quiet periods, labour hire is often more cost-effective for variable volume.

Can I hire them permanently?

Often, yes. Many sites use labour hire to trial workers before offering them permanent roles. Check your agency’s terms for conversion arrangements.

How much should be labour hire?

There’s no single right number. Use your lowest steady headcount as the permanent core and cover the variable volume above it with labour hire.

Talk to ASTAR

ASTAR Recruitment has supplied warehouse and logistics staff to Sydney businesses since 2006, from Western Sydney hubs like Blacktown to Liverpool and beyond. We fill 92% of shifts by the next day, with a median of 3 hours from your call to confirmed names. Workers are paid weekly every Thursday, and you’re invoiced weekly with electronic timesheets.

Call 1300 562 562 or send us your staffing request. See all the areas we service across NSW.