One Team, Two Locations: Why Australian Employers Are Mixing Local and Offshore Staff

News · 2026-09-04 · 5 min read

Public discussion of offshoring in Australia tends to split into two camps. Some headlines focus on big corporates sending hundreds of back-office positions overseas. Others treat every offshore hire as a danger to local jobs. What gets missed is the reality inside most Australian firms: they are not picking onshore or offshore. They are deliberately building both, because they face a capacity shortfall that shows no sign of disappearing.

Here is an organised look at what is driving this blended model and what it means for skilled workers.

A Shortage of Skills, Not a Search for Cheap Workers

Fresh research from workforce provider ConnectOS confirms what recruiters and owners have sensed for some time. Skills shortages have moved beyond being an HR issue and are now hitting revenue. Surveyed employers described genuine commercial damage from roles they could not fill:

service standards dropping;
customers leaving;
deadlines being missed;
in some cases, new work refused outright because the team lacked the capacity or the expertise to deliver it.

This point deserves attention. The trend is not about firms favouring lower-cost labour. It is about firms that first tried to recruit at home, could not fill essential positions quickly enough, and then saw the cost of that gap appear in their financial results.

Small Firms Versus Coles and Qantas: Different Calculations

Much of the recent debate has focused on large corporate offshoring arrangements involving hundreds of positions and major outsourcing partners, the kind of headline story associated with Coles or Qantas. For the small and medium-sized businesses that form most of the Australian economy, however, the maths works very differently.

Consider a founder who wants to employ a first local operations or administration assistant. After superannuation, leave entitlements and overheads are added, the true cost of that salary can climb well into six figures. For a young business, that is less a hiring choice than an expense it simply cannot meet. Seen this way, offshoring is not replacing a local hire that would otherwise have gone ahead. Very often it is the only way the position gets filled. It also frees the founder or current staff to concentrate on higher-value tasks that grow the business, and in time that growth can support hiring locally.

Judging a ten-person company setting up its first support function by the same standard as a national retailer restructuring its back office misses what is really going on. It also risks putting off the very businesses that most need flexible staffing options from considering them.

Where AI Fits Into Offshore Work

Many people assume that wider use of AI will eventually remove the need for offshore staff. The evidence points another way. Offshore teams are taking up AI tools as fast as onshore teams, and in some cases faster. Several of the quickest-growing offshore roles at present are directly linked to AI and automation, including data analysts, automation specialists and AI engineers.

Automation is absorbing routine, rule-driven tasks. The work that remains, and that is expanding, depends on judgement: making sense of information, understanding a customer's situation and using AI tools sensibly inside a particular business. Such roles demand more skill than the old picture of offshore work as purely transactional back-office support, and this shift is worth building into any offshore hiring plan for the next few years.

Compliance: The Area Most Employers Find Hardest

Among the more revealing results in the ConnectOS data is one that has nothing to do with hiring plans. It concerns risk. Most employers say compliance expectations for offshore arrangements have climbed steeply within just a few years. Even so, only a quarter feel truly confident about their current position, and a notable share do not know which standards apply to their arrangement.

This is where many businesses go wrong. The mistake is rarely the decision to offshore; it is the way the arrangement is set up. Several elements need to be correct from the first day:

how workers are classified;
obligations for handling data;
the terms of each contract;
points where local employment law overlaps with the offshore setup.

Companies weighing an offshore arrangement should build compliance into the design from the start rather than adding it later. Where local and offshore arrangements meet, the Fair Work Ombudsman's guidance on employer obligations is a practical place to begin.

Start With a Review of the Workload

The best first question is not whether to offshore. It is an honest review of what the team does from one week to the next:

Which tasks are repetitive and of lower value?
Which need knowledge of the local market or judgement in front of clients?
Which are holding back growth only because there are not enough hours to deal with them?

This review usually points to a blended model rather than an either-or decision. Core roles that are client-facing or rely heavily on judgement stay in Australia. Support, operations and specialist capacity, including new AI and data roles, are built offshore. When this is done properly, the structure does not compete with local recruitment. It pays for it, giving the business room to grow until local hiring becomes affordable.

Main Lessons for Business Leaders

Skills shortages are not fixing themselves. The businesses handling them best 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 understanding of how AI changes the value of offshore work. That makes it a workforce strategy issue, not a political one, and it should be treated that way.

What Pakistani Professionals Can Take From This

For skilled workers from Pakistan and other countries, the message is to focus on the kinds of work this research describes as growing: data, automation and roles that rely on sound judgement. Keep an English CV that shows these skills clearly, and check every employer and offer carefully before you commit.

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