BACKGROUND AND AIMS: In Victoria, maternity services are under significant strain due to increased numbers of women giving birth and critical workforce shortages. Hospitals have experienced challenges in adequately staffing maternity units, particularly on postnatal wards. In 2008, a tertiary maternity hospital in Melbourne introduced a model where undergraduate midwifery students were employed as Division 2 nurses (SMW_Div2) (enrolled nurses), to work in the postnatal area only. This study explored the pilot employment model from the perspective of the SMW_Div2 and hospital midwives. METHODS: A web-based survey was administered to hospital midwives and the SMW_Div2s in the employment model in January 2010. The survey explored the views of midwives and SMW_Div2s regarding the perceived impact of the model on workforce readiness, recruitment and retention, and clinical competence and confidence. FINDINGS: Forty-seven of 158 midwives (30%) and five of nine SMW_Div2s employed in the model responded to the survey. Both groups considered the model to have benefits for the organisation, including increased: student workforce readiness; clinical confidence and competence; and organisational loyalty. Both groups also considered that the model would facilitate: workforce recruitment; a teaching and learning culture within the organisation; and enhanced partnerships between students, hospitals and universities. Caution was expressed regarding workload and the need for ongoing support for SMW_Div2s working in the model. DISCUSSION AND CONCLUSION: SMW_Div2s and midwives were positive about the introduction of the paid employment model at the Women's. The findings are consistent with evaluations of similar programs in the nursing setting. The employment model has potential short and long term individual and organisational advantages, which is important in the context of increasing births and workforce shortages. Progression of such models will be contingent on the collaboration and cooperation of the various stakeholders involved in maternity workforce and education.