Visibility into contingent labour reduces legal risk and lifts productivity
Workforce compliance is shifting from a defensive, back-office function to a genuine source of competitive advantage, according to Mark Coyle, chief executive officer of HeadFirst Group's Asia-Pacific and India operations.
Speaking to HRD Australia, Coyle said the businesses that have invested in visibility over their entire workforce – not just their permanent employees – are now best placed to avoid the penalties and reputational damage that have hit organisations caught exploiting labour hire loopholes.
"There is significant lack of visibility across particularly those non-permanent labour categories," Coyle said, noting the issue spans companies from Fortune 200 firms through to small and medium enterprises.
A tougher compliance environment
Coyle's comments come as Australian employers continue adjusting to the Fair Work Legislation Amendment (Closing Loopholes) Act 2023, which introduced criminal penalties for intentional wage theft and created "same job, same pay" rights for labour hire workers, along with the follow-up Closing Loopholes No. 2 Act 2024, which reformed casual employment rules.
Coyle said the legislation has already reshaped behaviour among major employers in sectors such as mining and aerospace, where regulated labour hire arrangement orders have been enforced.
"Look at the major employers that this was targeted at in the resources [sector], in the aerospace sector, in mining," he said. "All of those orders have been enforced, and they have been told to pay the same and give casual conversion rights and all the rest of it to those workers."
He said HeadFirst regularly fields requests from customers testing the boundaries of the new rules.
"We have regular conversations with customers to say, hey, we know about this bill, same job, same pay, and closing the loopholes," Coyle said. "What if we did this, would that be acceptable? And often our response is it sounds like you're trying to find a loophole. And the bill is called closing the loophole."
Visibility as the starting point
Asked what advice he would give a business leader struggling with compliance, Coyle pointed to a lack of visibility as the root cause rather than deliberate wrongdoing.
"I don't think it's through bad intent," he said. "I think it's just through execution – for organisations largely, that they know that they're spending lots of money on contingent labour, or through statement of work, through consulting, advisory or [contract] workers, or even now moving into agentic [AI] and two different platforms."
His recommended sequence is straightforward: establish visibility and governance first, then assess the risk profile of the workforce, then put policies and controls in place. "It's got to start with governance, visibility, and then getting the business ready to control it," he said.
Coyle added that workforce risk now extends beyond individual employers into their supply chains, pointing to instability among labour hire providers. "We have already seen this year labour hire companies going to administration," he said, adding that some of the world's largest recruitment firms have posted steep declines over the past two years.
Offshoring and the changing shape of the workforce
Beyond compliance, Coyle discussed HeadFirst's expansion into India, where the group operates out of Ahmedabad and is scaling up a facility in Hyderabad – one of several Australian and global employers increasingly drawing on India's global capability centres for both cost efficiency and access to talent.
Coyle said the rationale has shifted from wage arbitrage toward strategic access to skilled workers, as the country's talent pool continues to expand rapidly.
He also linked the compliance conversation to the rise of agentic AI within enterprise workforces, arguing that governments will eventually need to catch up on how automated and AI-driven labour is regulated, taxed and secured, in the same way they have moved to regulate contingent and outcome-based work.
"What happens when agentic [AI] is a real influencer in the workforce? How is that governed? How is that taxed? How is that onboarded compliantly?" Coyle said, describing it as the next tranche of workforce strategy for HR leaders to navigate.
