The Cash Rate Is 4.60 Per Cent. It Decides Which Hiring Model Fits Your Team Best.

Which hiring model fits your team best is settled by when the cash leaves, not by what the twelve-month total says. A placement fee lands in full before the person has produced anything. A monthly employment cost lands in arrears, in step with the work. Same hire, same salary, two very different holes in your working capital.

Most founders read a rate decision as a mortgage story.

On 29 September the Reserve Bank's Monetary Policy Board lifted the cash rate target by 25 basis points to 4.60 per cent, the fourth increase this year, unanimously. The line that should have stopped you is further down the page: growth in aggregate demand, the Board wrote, "needs to remain subdued for a period to reduce capacity pressures". Australia's central bank has put in writing that it intends your revenue line to grow more slowly. Outstaffer sells an AI recruiter that attacks the fee side of this, which is either useful or a comment on what a shortlist was ever worth.

What the Board actually said about your prices

The same statement records that firms "are experiencing cost pressures and are either increasing the prices of their goods and services or looking to do so". Your competitors are putting prices up. The Board is tightening precisely so that fewer customers say yes to them.

Read those two sentences together and the squeeze is not an accident. It is the policy working.

What does a $20,000 placement fee cost at a ten per cent margin?

It costs $200,000 of revenue. Outstaffer publishes the agency range as a $10,000 to $30,000 tax per hire. Take the middle. A business on a ten per cent net margin sells $200,000 to fund a $20,000 fee, and the Bank has just told it to expect slower demand growth. The fee is not really priced in dollars. It is priced in revenue you have been instructed not to count on.

Who carries the cost of a nine-week vacancy?

You do, in founder hours, and the interest is the smallest part. Carrying that $20,000 at 4.60 per cent across a nine-week search costs about $159. That number is deliberately unimpressive. The rate rise is not the bill. The rate rise is the signal about the demand that was going to pay the bill.

Which model fits your team depends on when the money leaves

Three ways to put a person in the seat, and they differ less on total cost than on timing.

The Bank's exchange rates already repriced what you pay a team abroad, which is a separate argument about billing currency. The cash rate does something different. It reprices the decision, not the invoice.

The honest case for doing nothing yet

Labour market conditions, the Board noted, "have eased broadly as expected in recent months". An easing market means better candidates answer your ads and salary expectations stop climbing. Waiting a quarter is a real strategy.

The counter is that a vacancy is not free while you wait, and the roles worth filling in a soft market take three months to become productive.

Related reading

• The Wage Index Prices Jobs. You Pay For People.
• Canberra Is Banning No-Poach Deals. Your Staffing Contract Already Has One.

Pick the hiring model on timing, then on who carries the risk

Which model fits a team that cannot raise prices?

The one where cost arrives with output. If demand growth is being held down on purpose, a fee paid before any output is the worst shape available, and an employer of record is not a second quote for the same job but a different cashflow. None of this is tax or employment advice, so take your own.

To see what your current arrangement costs in cash terms rather than annual terms, sign up and run one role through it. Or wait a quarter, which is also a decision.

One question worth arguing about: on your numbers, which hiring model fits your team best right now, and is it the one you used last time because it was easiest?