The impact of labor hire companies (employment agencies) on Australia's apprenticeship system was studied. Three data collection strategies were used: literature review; survey of a random sample of 200 labor hire firms in Victoria, New South Wales, Queensland, and Western Australia; and case studies of four recruitment and labor hire firms and their client firms. Of the 57 (29%) firms that responded to the survey, 43 returned usable questionnaires. It was discovered that, like the firms they serve, labor hire firms may be small, medium, or large. Labor hire firms operate in all of Australia's states and industries but focus on main population and employment centers. Labor hire firms have a relatively young work force, primarily offer short-term replacement/supplementation services, rely on client relationships and repeat business, and have skilled and experienced work forces drawn from the available skill pool and the labor force. It was concluded that, although labor hire has not caused Australia's decline in apprenticeships, it may have contributed to the deferral of consideration of longer-term skill requirements. (Twenty-seven figures/tables are included. Appendixes constituting approximately 60% of this document contain the following: 45 references; 4 case studies; and the survey questionnaire and a summary of responses.) (MN)