Leveraging Australia’s Agency Workforce to Drive Economic Recovery

Economic & Financial Consulting

May 29, 2020


The COVID-19 pandemic is creating extreme volatility in labour markets. In Australia, the health emergency quickly led to Federal, State and Territory governments imposing restrictions on activity to contain the spread of the virus.

An immediate adjustment occurred with some businesses and parts of the economy facing unprecedented demand to meet community needs. In contrast, other businesses and their employees were severely impacted by the shutdown across many parts of the economy.

Unemployment is expected to increase significantly because of restrictions on economic activity and an economic recession is predicted. The hospitality industry is expected to face the greatest hit to employment because of the immediate impact of COVID-19 restrictions. Younger workers and lower-income workers are likely to face the brunt of the employment impacts.1

There is concern about how long the economic impacts of COVID-19 will be felt and a strong imperative to ensure the economy can ‘snap back’ quickly once restrictions are lifted and to restore economic activity.

The purpose of this analysis is to examine the economic contribution of agency workers to the Australian economy.

It draws on international and Australian evidence, including industry consultation to identify how the agency workforce may be affected by the looming recession, how it can contribute to the shift in labour requirements across the economy and how it can support the economic recovery following the COVID-19 pandemic and subsequent downturn.

It also presents an estimate of the potential benefit to the Australian Government of leveraging the agency workforce to speed up the economic recovery, including by encouraging the placement of displaced workers.


1: Grattan Institute, Shutdown: estimating the COVID-19 employment shock, p.19.

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