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Jacqui GrahamOctober 19, 20234 min read

The Rise of the Empowered Contractor in 2023 and how Recruiters are responding

In 2023, the contracting industry, particularly among those with specialised high-demand skills, underwent significant change. This transformation has been driven by Australia's real need for economic growth combined with the relentless labour shortages across Australian businesses.

Here we delve into this evolution, its implications for top-tier contractors, and the proactive measures recruitment agencies are adopting in response to this transformation.


The surge in demand for skilled Contractors in Australia

As the Australian economy is in recovery, the demand for skilled professionals has risen substantially. However, as positions for these experts have multiplied, the need for qualified candidates quickly outpaced the available pool of talent. This has created a real challenge for recruitment agencies, who now face difficulties in sourcing and retaining top talent in the white-collar sector.

The skill gap dilemma

Australian businesses continue to struggle to find talent, in particular with the required IT skills, according to the recently published AIIA Digital State of the Nation 2023 report. And worryingly the areas with the keenest skill shortages are those where skills will be most in demand in 2024 and beyond.

According to the report, skill shortages are the single biggest inhibitor to business growth in Australia, at 44%. This is ahead of categories like limited access to finance, limited demand for products and services and supply constraints. One-half of Australian organisations are having to outsource IT roles globally due to a lack of local skills, and AI (56%) and cyber security (40%) were the most commonly outsourced skills.


Empowered Candidates:  Knowing their worth

In this new landscape, ambitious skilled candidates have become a real dominant driving force. With the increasing demand for specialised professionals, these candidates can now enjoy prime position. They possess a much greater negotiating power, demanding (and securing!)  better compensation packages, benefits, and work conditions.


The 3 factors amplifying skilled contractors power in the Australian job market:


1.  Hybrid work arrangements offered for top talent


Employers in Australia are attempting to stand out from the competition by reshaping their hiring tactics for their senior level contractors.  Recognising the rising popularity of remote work in recent years, these companies are adopting sought after hybrid work models. Such a strategy not only attracts the industry's top talent but also extends significant benefits to these candidates. Offering a blend of on-site and remote opportunities, aligns with the rising preferences of professionals seeking an improved work-life balance and strengthens their position when negotiating for senior roles.


2.  Skills Shortages in Specialist Areas:

Certain Industries like IT, finance and Healthcare in Australia face a marked lack of skilled professionals. Those with niche skills in these fields stand out, giving them the leverage and negotiation power to seek improved salaries, enhanced benefits, and much greater job stability. The limited pool of talented experts in these sectors offers candidates the upper hand, allowing them to be able to cherry pick from various job offers and get the very best terms with attractive pay packages, given the extent of the need and the scarcity of their expertise.

3.   Market transparency and Information accessibility:


Candidates in 2023 now have unparalleled access to a huge amount of information at their fingertips.  With online job platforms, salary tools, and professional networks, they can gain full insight into industry trends and make informed decisions accordingly. This knowledge and personal training further empowers them and their already strong bargaining power.

The Recruiters response to the Contractor shift

Recruitment agencies in Australia have been quick to adjust to this change. Competition among these agencies has fiercely intensified, with many offering better incentives to attract the best talent. Initiatives like training and upskilling are increasingly seen as ways to bridge the existing skill gaps.

Agencies are becoming all too aware that they must remain adaptable, innovative, and focused on creating mutually beneficial situations for both employers and candidates on a daily basis to attract and retain the best talent in 2023.


Leveraging Contractor Management and Technological Advancements


Many recruitment agencies are turning to contractor management services to enhance their contractor experience. By streamlining onboarding, management, and payment processes, these services not only optimise operations but also minimise risks. The result is a superior and more appealing service offering for both clients and contractors alike.

Furthermore, recent investments in technology in the recruitment industry have streamlined and improved the internal recruitment processes, enhancing the overall candidate experience significantly.  


As we assess the shifting dynamics of Australia's job market we’ve seen through 2023, it's clear that good skilled top talent are holding all the cards and are in a prime position to pick and choose their best options. Their enhanced bargaining power marks a deep-seated change in Australia's employment dynamics, and the repercussions of this shift are likely to shape employer strategies, compensation packages, and workplace cultures for years to come. 

Recruitment agencies and Enterprises need to adapt to this new reality, focusing more than ever on creating environments that not only attract but also retain this top-tier talent.   If you would like to read more thoughts, insights and statistics on what motivates and drives Contractors to make the decisions they make, then head over to Oncore’s State of Contracting survey 2023

Maximise growth with Oncore's support.

Oncore has been working with the recruitment industry for 25 years, providing the support agencies need to maximise growth and enhance their candidate experience through the outsourcing of contractor payroll and other back-office services. We take away time-consuming tasks such as contractor setup, timesheet chasing, cash collection, payment and distributions, leaving you with more resources with which to grow your agency, delight your clients and source the very best candidates.  Get in touch to find out how we can help.