Are contract chefs cheaper than permanent chefs in Australia?

Worried about your kitchen hiring budget? Getting staffing right in an Australian food business is tricky at the best of times, and when you compare hourly wages to day rates it can often look like contractors are too expensive (even if they’d be ideal gap-fillers for your roster).  

But, there’s quite a few hidden costs to hiring permanent chefs that you need to be aware of, which show that it’s often cheaper to hire contractors to fill short-term needs. 

So what do you need to know? Let’s take a look. 

The hidden costs of hiring permanent in-house chefs

1. Salary is just the beginning

We know on the surface it seems like a contractor’s rates are much higher than a permanent chef’s wages, but wages are only where your costs start. To secure a permanent employee, remember that you’ll also be paying: 

• Sick and annual leave entitlements 
• Parental leave, if applicable 
• Public or cultural holidays 
• Payroll tax 
• Superannuation 
• Medicare 
• Insurance 

2. The cost to hire and train

Next you must factor the costs to find, interview, hire, onboard and, in many cases, train your new chefs. Even if you hire someone fully qualified and with a lot of background experience, there will still be a period where they’re less productive as they adjust to their new working environment. 

This all builds up. In fact, an ELMO study found the average cost to hire in Australia to be $20,000, and the average time it takes for a new employee to become fully productive is just over a month. Additionally, the average cost to train someone is $2,000. 

These costs are an amalgamation of recruitment and onboarding costs, plus the slowdown in productivity. 

3. Cost of inflexibility

We all know it’s possible to become over or understaffed in the kitchen as customer demand changes unexpectedly. 

The risk here is that, when your team is full of permanent talent, you may end up with a situation where you’re paying multiple salaries without needing to – where there’s not enough demand to justify the size of the kitchen. The lack of flexibility adds to that total budget. 

4. Cost of employee turnover

AI Group data estimates the staff turnover rate of Australian hospitality to be about 19%, the highest of any sector in the country. We see this high rate of job mobility in the length of time chefs tend to stay in their jobs – in a study of Australasian chefs by AUT, researchers found that two-thirds of chefs have been in their job less than three years. 

This is a fairly impermanent workforce, and always has been. While staff coming and going is the norm for kitchen roles, it can seriously add to staffing costs – that cost-to-hire above must be repeated essentially every couple of years. 

5. Cost of poor cultural fit

The last hidden cost to factor is the cost of getting it wrong – hiring someone who isn’t a great fit for your kitchen, who either leaves very quickly or who you must get rid of to replace with someone more suitable. 

This one is considerably harder to calculate, as it’s very dependent on the business, hiring manager and work culture. But, it’s something to keep in mind – speeding up the hiring process in order to cut recruitment costs can actually double the budget instead, if you get it wrong. 

5 ways contract chefs could save your business money

While we’re not suggesting that every food business should switch entirely to temp chefs (more on that below), there are a lot of potential savings to be had by hiring contractors in specific situations. 

Some of those benefits include: 

1. You only pay their rate, no leave entitlements or add-on costs. 
2. Their insurance is usually covered by their temp chef recruitment agency. 
3. You gain greater control of your staffing budget – scale it up or down based on seasonal need. 
4. There’s no big expense if you lose a contractor, you can just ask the agency for a replacement. You might even get that replacement for free if your initial chef leaves within the first few months. 
5. Temp chefs allow you to access pre-vetted, highly qualified talent to get in-demand skills and reinvent your menu to suit new trends. 

Learn more: The top 6 benefits of hiring temp chefs + a success story 

Should I hire in-house or contract chefs?

The short answer is that it depends on your situation.  

If you find that your food business is very subject to shifts in season, customer demand or food trends, switching mainly to contract chefs could help you to stay on top as your needs grow, shrink or change. Contractors can also fill gaps in your roster very quickly, allowing you to take more time to carefully pick a permanent replacement – to avoid that doubling up of recruitment costs. 

Alternatively, you might consider hiring one or two in-house chefs to maintain consistency in the kitchen and to help orient new staff, while supplementing this small team with contract chefs to suit changing demand. Rapidly scale up if they need help, then scale back down for quiet seasons.  

Learn more: How to choose a contract chef recruitment agency 

Not sure what you need?

Get in touch with our team of experts at Squad Recruitment. We know what it takes to create success in Australian hospitality, and hiring chefs is our specialty. We can help you understand who you’re likely to need, put in place a recruitment strategy tailored to your unique business and find the best people to fill your kitchen.  

Learn more about our expertise in hiring temp chefs, or contact us directly to chat about your business.