Not Onshore or Offshore, But Both: What Australian Employers Are Really Doing
News · 2026-09-04 · 5 min read
Ask around about offshoring in Australia and you will hear two loud camps. One points to headlines about big corporates shipping hundreds of back-office jobs abroad. The other says any offshore hire threatens local workers. Both miss what is going on inside most Australian businesses. These firms are not choosing one model over the other. They are deliberately running both, because they have a capacity problem that is not about to disappear. If you are a skilled worker looking at remote or overseas roles, it pays to understand this clearly.
Shortages Are Costing Businesses Money
Workforce provider ConnectOS has released new research that puts hard numbers on what recruiters and owners have known for years. A skills shortage is no longer just an HR issue. It hits revenue. Employers in the survey said unfilled roles caused real commercial harm: weaker service, lost customers, missed deadlines, and in some cases new business refused outright because staff did not have the capacity or expertise to deliver it.
Take that seriously. This is not about bosses chasing cheaper labour. These businesses tried to recruit locally, failed to fill key roles in time, and then saw the damage on their balance sheet.
The Coles and Qantas Debate Is Not the Whole Picture
Public discussion lately has focused on large corporate offshoring deals involving hundreds of roles and major outsourcing partners. Small and mid-sized businesses, which make up most of the Australian economy, face a completely different calculation.
Consider a founder who wants a first local hire for admin or operations. Add superannuation, leave entitlements and overheads, and the fully loaded salary can go well into six figures. For an early-stage business, that is frequently impossible, not a choice. So offshoring is not undercutting a local hire that was going to happen anyway. Often it is the only way that role is filled. It lets the founder and existing staff focus on higher-value work that grows the business, including work that can eventually support local hiring.
Putting a ten-person business building its first support function in the same box as a national retailer restructuring its back office misses the point completely. It can also scare off the very businesses that most need flexible workforce options.
The Compliance Gap Nobody Talks About
One striking result in the ConnectOS data concerns risk management, not hiring plans. Most employers say compliance expectations around offshore arrangements have risen sharply in just a few years. Yet only a quarter are genuinely confident in their current compliance position, and a meaningful share do not know which standards apply to their setup.
This is where things go wrong. The mistake is usually not the decision to offshore but the way it is structured. Worker classification, data handling obligations, contract terms and the overlap with local employment law must all be right from day one. Businesses should treat compliance as part of the design, not an afterthought. Where local and offshore arrangements meet, the Fair Work Ombudsman's guidance on employer obligations is a sensible first stop.
A note for workers: proper compliance protects you too. A genuine employer or offshore provider will have clear contracts and will never ask you to pay for a job offer.
AI Is Changing the Job, Not Removing It
Plenty of people assume AI will make offshore hiring pointless. The data says otherwise. Offshore teams are adopting AI tools as fast as onshore teams or faster, and some of the quickest-growing offshore roles are in AI and automation: data analysts, automation specialists, AI engineers.
Automation is taking over routine, rules-based work. What is left, and what is growing, needs judgement: reading information correctly, understanding the customer's context, and applying AI tools sensibly in a specific business. That is a more skilled offshore role than the stereotype of purely transactional back-office support, and businesses planning offshore hiring for the next few years should factor it in.
Audit the Work Before Making Any Move
The right first step is not asking whether to offshore. It is a frank review of what the team actually does each week. Which tasks are repeatable and lower-value? Which need local market knowledge or client-facing judgement? Which are slowing growth only because there are not enough hours to get to them?
That review usually shows a blended model, not a yes-or-no choice. Core roles that need judgement and face clients stay onshore. Support, operational and specialist capacity, including emerging AI and data roles, is built offshore. Handled well, this does not compete with local hiring. It funds it, giving the business space to grow to the stage where local hiring becomes affordable.
The Straight Answer
Skills shortages are not going to sort themselves out. The businesses managing them well are not picking sides in the onshore-versus-offshore fight. They build integrated teams with clear role mapping, solid compliance and a realistic view of where AI changes the offshore value proposition. Treat it as a workforce strategy question, not a political one. For job seekers, focus on judgement-based and AI-related skills, and always check that any employer or provider is legitimate before you commit.
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