Local and Overseas Staff Working Side by Side: How Australian Firms Are Solving Their Skills Gap

News · 2026-09-04 · 5 min read

In Australia, people now argue strongly about offshoring. Some news stories focus on big companies sending hundreds of back-office jobs overseas. Other voices say that every offshore hire is a danger to local jobs. In all this noise, one fact is easy to miss. Most Australian businesses are not choosing between local staff and offshore staff. They are building both on purpose. They do this to fix a lack of capacity that is not going away.

For workers in Indonesia and other countries, this is helpful to understand. It shows what kind of work Australian employers need, and why.

A Shortage of Skills, Not a Search for the Cheapest Worker

New research from the workforce provider ConnectOS gives figures for something recruiters and business owners have noticed for years. Skills shortages are not only a problem for HR anymore. They are a problem for revenue. Employers in the survey described real business damage when they could not fill roles. Service quality dropped. Customers left. Deadlines were missed. Some businesses even turned away new work completely, because the team did not have the time or the skills to handle it.

This point is important. The story is not about businesses wanting cheaper labour. It is about businesses that tried to hire locally first. They could not fill key roles quickly enough, and then they saw the cost of that gap in their financial results.

Why a Small Firm Is Not Coles or Qantas

Much of the recent public debate has been about large company offshoring deals. These deals can involve hundreds of roles and major outsourcing partners. But most of the Australian economy is made up of small and mid-sized businesses. For them, the maths is completely different.

Picture a founder who wants to hire a first operations or admin support person in Australia. Once superannuation, leave entitlements and overheads are added, the full cost of that salary can go well into six figures. For a young business, this is often not a real choice. The money is simply not there.

In this situation, offshoring does not replace a local job that would have happened anyway. Very often, it is the only way the role gets filled at all. It also frees the founder or current staff to spend time on more valuable work that helps the business grow. In time, that growth can include work that supports hiring locally.

A ten-person business setting up its first support team is very different from a national retailer reorganising its back office. Treating them the same way misses the point. Worse, it may stop the businesses that most need flexible staffing options from even looking at them.

Rules and Risks Many Employers Still Find Confusing

One of the most revealing results in the ConnectOS data is not about hiring plans. It is about managing risk. A large majority of employers say that compliance expectations for offshore arrangements have risen sharply in only a few years. Yet only a quarter feel truly confident about their current compliance position. A meaningful share are not even sure which standards apply to their setup.

This is where many businesses make mistakes. The problem is usually not the decision to go offshore. It is how they set it up. Several things must be correct from the very first day:

how workers are classified;
how data is handled and protected;
what the contract terms say;
where local employment law overlaps with the offshore arrangement.

Businesses thinking about offshore staff should build compliance into the plan from the start, not add it later. When local and offshore arrangements meet, the Fair Work Ombudsman's guidance on employer obligations is a sensible place to begin.

Smarter Tools, Smarter Offshore Roles

Many people believe AI will one day make offshore hiring unnecessary. The data does not support that. Offshore teams are adopting AI tools as fast as onshore teams, and sometimes faster. Some of the fastest-growing offshore roles today are directly in AI and automation. Examples are data analysts, automation specialists and AI engineers.

What AI takes over is the routine work that follows fixed rules. The work that remains, and the work that is growing, needs judgement. This means understanding information, knowing the customer's situation and using AI tools wisely inside a particular business. These roles need more skill than the old picture of offshore work as simple back-office tasks. Businesses should keep this trend in mind when they plan offshore hiring over the next few years.

Look Closely at the Work Before Deciding

The best first question is not "should we go offshore?" A better start is an honest review of what the team really does each week. Ask questions like these:

Which tasks are lower in value and easy to repeat?
Which tasks need knowledge of the local market or judgement in front of clients?
Which tasks are slowing growth just because there are not enough hours in the day?

This review usually points to a blended team, not an either-or choice. Core roles that need judgement and client contact stay in Australia. Support, operations and specialist capacity, including new AI and data roles, are built offshore. When this is done well, it does not compete with local hiring. Instead, it pays for it. It gives the business room to grow until hiring locally becomes possible.

Key Lessons for Leaders and Job Seekers

Skills shortages will not fix themselves. The businesses handling them well are not taking sides in the onshore-versus-offshore argument. They are building connected teams with clear role mapping, strong compliance foundations and a realistic view of how AI really changes offshore work. This is a question of workforce strategy, not politics, and it deserves to be treated that way.

For job seekers, the message is practical. Employers value people who can use judgement, understand data and work well with AI tools. Keep building those skills, and present them clearly in an English-language CV.

#offshore staffing australia #blended workforce model #onshore offshore teams #skills shortage australia #offshore hiring strategy #workforce compliance australia #offshore recruitment agency #small business offshoring #offshore talent solutions #ai in offshore roles #fair work compliance #offshore staffing costs #talent shortage solutions #offshore vs local hiring #compliance risk