Commentators predict that unemployment in Australia will rise sharply due to the COVID-19 pandemic and subsequent economic downturn.

Around 8 per cent of adult Australians (more than 1.6 million people) appear to have lost their incomes in the first week of the total COVID- 19 lockdown.

The federal Treasury predicts around 700,000 job losses leading to a 10 per cent unemployment rate.

In the context of the Australian Government’s current fiscal stimulus arrangements, there is an incentive to transition them rapidly to employment and to reduce the amount of time that Australians spend unemployed.


Hiring workers through job agency firms reduces the time that businesses would otherwise take to employ a displaced worker by two weeks. During those two weeks, the displaced worker generates income rather than income support, and pays income tax.


Getting people into businesses faster means that those businesses can expand their output faster. This will yield higher profits, and thus higher company taxation.


Based on historical data, the job agency workforce is responsible for placing 13 per cent of unemployed workers in new jobs, however there is a significant potential upside in this figure. For example, job agencies in Germany place around 30 per cent of unemployed workers.


Businesses undertake expansion that would not otherwise occur in the absence of having flexible access to a pool of professional, skilled and semi-skilled labour.

The role of Australian job agencies in economic recovery

A May report from FTI consulting found that Australian job agencies will be vital to creating jobs and supporting business to accelerate economic recovery post COVID-19.

The report estimates that access to and leverage of the agency workforce will boost the nation’s economic recovery by almost $1 billion and deliver around $200 million for Government in jobseeker savings and additional tax revenue from the extra jobs created

The report draws on local and overseas experience and evidence to assess the role of Australia’s agency workforce in accelerating economic recovery after severe downturn.

It found that businesses who drew on agency workers during challenging times were likely to accelerate more quickly out of downturn than their competitors.

The report is relevant to Australia’s job creation imperative and highlights the importance of flexibility and responsiveness in providing business with the confidence to invest and employ during economic recovery.

Find out more about the vital role job agencies will play in Australia’s economic recovery