RCSA warns of potential staffing crisis as recruitment agencies face restrictions in NSW

Australia’s peak body for Recruitment and Staffing (RCSA) has written to the New South Wales Health Minister warning that hospitals could struggle to fill critical staffing gaps if agencies are blocked or restricted from supplying nurses and doctors to the system.

The State Government has agreed to examine the use of private recruitment and locum agencies following a motion proposed by Greens politician Amanda Cohn to ban the use of external recruitment services in favour of bringing the process in house.

“I am concerned by Amanda Cohn’s proposed motion to Parliament in June and a subsequent ‘one-sided’ article published by The Sydney Morning Herald this week,” RCSA CEO Charles Cameron said.

“For the Greens to blame an agent for representing the increasing price of talent in the middle of a medical staffing crisis indicates they don’t understand how markets operate. We need structural solutions, not scapegoats, from our political leaders.”

RCSA is concerned that the reckless and unfounded comments could undermine the crucial role locums play in helping the health system overcome staffing challenges when there are critical skills shortages and other market failures.

“The ability of NSW Health to effectively and efficiently find and place staff should be the priority of any Parliamentary review before the idea of changing the status quo should even be entertained,” Cameron added.

Currently, local health districts (LHDs) in NSW manage their locum workforces through different agencies, engaged through contractual agreements that are drafted by the LHD.

These agreements establish the terms of the engagement and the fee that the agency will receive for placing a worker. Allegations that recruitment agencies are demanding unjustifiably high fees to drive up their profits don’t stack up.

“In our experience placement fees for doctors in LHDs across NSW sit between 10-15% and many are working to tighten this percentage even further as existing agreements expire,” Cameron said.

“In reality, a staffing agency’s profit margin constitutes only a very small portion of the placement fee. The majority of the money raised goes on overhead and service costs and other expenses such as general insurances, travel costs and accommodation. If the fee was lowered below the current rate it would make it extremely difficult for agencies to cover expenses and provide high calibre healthcare staff.”

RCSA’s members provide vital resources to the public, private hospitals, clinics and facilities. Private recruitment agencies ensure continuum of care by plugging the gaps of the permanent workforce and act as a safety net for the doctors and nurses who were overworked during the COVID-19 pandemic, enabling them to remain in work but in a more flexible and sustainable, manner.

Agencies have the expertise and databases to source and attract workers to regional and rural areas where shortages are dire. These areas often lack sufficient infrastructure and as a consequence are not typically appealing for workers to relocate permanently or commit to longer placements.

“In addition to having access to a broad pool of doctors and nurses, across multiple jurisdictions, agencies have experience, and time, to nurture a candidate into a rural placement. They have established structures and contacts to help workers relocate and find suitable housing, meals, and transportation. These costs can be absorbed into to the placement fee. They are responsibilities that exceed the capabilities of the NSW Health LHDs and even individual hospitals, which are already burdened with limited time and internal resources.

“There has been a shortage of health care professionals for over 20 years and rates of pay and fees have responded accordingly. This is likely to continue until Australia can develop a larger pool of domestic doctors and nurses or streamline the process for global candidates to live and work in Australia. In the meantime, healthcare recruitment services have never been more vital and shaking up the way things are done in the middle of a skills shortages could have catastrophic consequences.”

Ritchelle Drilon

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Ritchelle is a Content Producer for Healthcare Channel, Australia’s premier resource of information for healthcare.

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