3 Key Challenges Facing Australia’s On-Hire Staffing Agencies

The Australian staffing industry is navigating a rapidly evolving job market, driven by skills shortages, economic fluctuations, technological advancements, and changing workforce expectations. As we move into 2025, on-hire staffing agencies must tackle a range of recruitment challenges to stay competitive and sustainable.

In this blog, we will explore the key issues impacting Australian staffing agencies and discuss how leveraging the right recruitment technology can help bridge these gaps.

1. The Widening Skills Shortage

Australia is facing one of its most significant skills shortages in decades, affecting multiple industries such as healthcare, construction, IT, and manufacturing. According to Jobs and Skills Australia,

• in 2023, 36% of assessed occupations (332 out of 916) faced national shortages, marking a 5% increase from the previous year's Skills Priority List (SPL).
• Technicians and Trades Workers were among the hardest hit, with half of the occupations in this category experiencing shortages, a trend consistent with past SPL findings.
• Professionals, particularly Health Professionals, were also significantly affected, with 48% of roles in shortage due to their high skill, qualification, and experience requirements.
• Additionally, shortages among Community and Personal Service Workers increased to 24%.
• Notably, 29% of occupations (266 roles) remained in shortage across both years, with nearly half belonging to professional fields such as health, engineering, ICT (information and communication technology), and science, while 33% were technician and trade roles.

Entire OnHire helps on-hire staffing agencies bridge the talent gap by streamlining recruitment processes and enhancing workforce management. With national skills shortages affecting key industries like healthcare, trades, and ICT, agencies need efficient solutions to source, up-skill, and retain talent.

Up-skilling and re-skilling are crucial to addressing these shortages, and it's essential for agencies to spread awareness among job seekers about the importance of continuous learning and career development. By integrating smart recruitment technology, agencies can better manage workforce shortages, optimise hiring strategies, and build stronger, future-ready talent pipelines.

2. The Impact of Evolving Technology on Staffing

The use of AI in hiring has revolutionised the staffing industry, offering unparalleled efficiency in candidate sourcing, screening, and onboarding. AI hiring tools help agencies automate repetitive tasks, analyse vast amounts of candidate data, and predict job compatibility with remarkable speed. This technological advancement has significantly reduced hiring timelines and allowed recruiters to focus on strategic decision-making.

However, while AI is a powerful asset, it is not without flaws. Bias in AI recruitment systems has become a growing concern, as algorithms trained on historical data may unintentionally reinforce discrimination, filtering out potential candidates who do not fit rigid, outdated parameters.

Furthermore, as machine learning continues to evolve, there is increasing speculation on whether certain technical skills will become obsolete, making adaptability and continuous learning essential in the modern workforce. Although AI enhances recruitment processes, staffing agencies must strike a balance between automation and human oversight to ensure fair and effective hiring practices.

Entire OnHire simplifies recruitment by providing the right features to automate manual processes, allowing agencies to focus on hiring the right talent efficiently. With capabilities such as payroll, workforce management, and compliance tracking, agencies can ensure that recruitment is streamlined and fully optimised. Features like Unmanaged Job Roster Management, Unfilled Shift Daily Program, Broadbean and SEEK Integrations, and Smart Shifts enhance job placements by reducing administrative burdens and improving shift management. 

With these powerful tools, Entire OnHire enables staffing agencies to operate more efficiently, reduce recruitment bottlenecks, and match the right talent to the right roles with ease.

3. Competitive Wages & Rising Wage Pressure

Wage pressure is intensifying across multiple industries, driven by inflation, labour shortages, and evolving workforce expectations. According to the Reserve Bank of Australia, wage growth has remained sluggish despite a high-inflation environment, largely due to economic uncertainties and employer reluctance to raise salaries at a pace that matches rising living costs.

However, staffing agencies are facing increased competition in talent acquisition, making competitive wages a crucial factor in attracting and retaining skilled workers. While many businesses struggle to balance rising labour costs with profitability, a smart compensation strategy including flexible pay structures and performance-based incentives can help offset these challenges. Additionally, the ongoing minimum wage debate continues to shape wage policies, requiring staffing agencies to stay compliant with evolving regulations while ensuring fair pay practices for their workforce.

Entire OnHire simplifies workforce financial management by automating payroll, invoicing, and reporting, eliminating common administrative challenges for staffing agencies. With custom charge rate applications, agencies can set unique pay levels based on client agreements, industry standards, skillsets, and employee experience, ensuring fair and competitive compensation. Entire OnHire also offers invoice collation with timesheets, enabling seamless billing while integrating with the ATO’s Single Touch Payroll system to manage superannuation, payroll tax, and work cover calculations. By providing a comprehensive financial management solution, Entire OnHire helps agencies remain compliant, streamline wage processing, and enhance overall efficiency in an increasingly competitive labour market.

Standing Out in a Crowded Recruitment Landscape

With thousands of staffing agencies in Australia, standing out from the competition is more challenging than ever. To remain relevant, agencies must:

• Specialise in niche markets or industries
• Offer value-added services like workforce planning
• Provide superior candidate experiences
• Leverage automation to reduce hiring times and improve efficiency

Entire OnHire is designed to help on-hire staffing agencies navigate these challenges with cutting-edge technology and automation. If you're looking to streamline your recruitment process, enhance workforce engagement, and improve operational efficiency, contact us today.