AHRI’s latest Quarterly Australian Work Outlook reveals a rise in overseas hiring as employers grapple with skills gaps and high turnover.  

A shortage of domestic skills and talent is driving the majority of employers to turn to overseas hiring, according to recent research by AHRI.

Sixty per cent of organisations surveyed for AHRI’s Quarterly Australian Work Outlook report (March, 2025) say they plan to recruit overseas workers in 2025 to ease skills shortages and recruitment challenges in the local labour market.

Meanwhile, employers are also making an increasing effort to cultivate skills in their existing workforces. More than four in five respondents (82 per cent) report implementing measures to upskill their workforce – an increase from 77 per cent last year.

“Overseas workers have represented a substantial addition to the total labour pool over the past two years, and organisations will continue to rely on them as part of their strategy to address skills shortages,” says AHRI’s CEO, Sarah McCann-Bartlett.

“However, long-term resilience also depends on upskilling and training the domestic workforce, so it was encouraging to see an uptick in organisations actively engaging and investing in their existing workforce.”

Can overseas talent solve Australia’s skills crisis?

Unsurprisingly, the most commonly cited reason for bringing in overseas talent is an inadequate supply of domestic candidates with the right skills and/or qualifications, which was named by 33 per cent of respondents. 

Other motivations for overseas hiring included a lack of experienced local candidates (30 per cent), a perceived better work ethic (28 per cent) and commitment to the organisation’s values (25 per cent). See a full breakdown below.

This increase in overseas hiring coincides with recent updates to Australia’s migration system, which includes provisions to make it easier for employers to sponsor migrant employees and new pathways for migrants to gain permanent residency.

“What [the government] is trying to do is have fewer people on graduate visas, and more people on employer-sponsored visas,” says Ben Watt, lawyer and Registered Migration Agent at VisaEnvoy.

“That’s how they’re trying to rejig the system to have less ‘permanent temporariness.’”

In December 2024, the government released a revised occupation list for migrant sponsorship, which includes newer roles such as content creator, data analyst and cybersecurity engineer.

“It will also make the categories more flexible for skilled migrants whose job descriptions don’t necessarily match the [list’s] descriptions word-for-word,” says Watt.

“This is great news for HR, since it reduces the psychological and administrative burden of having to fit skilled professionals into poorly suited categories, a process that previously led to misaligned job descriptions and unnecessary stress.”

This is all the more reason for HR to seize the opportunities that migrant employment can offer, he adds.

“It’s a great addition to your business, and it’s great having people from other countries work with you and bring their ideas to the table.”

Findings show correlation between skills gaps and employee turnover

Employers are not only struggling to source qualified candidates, but also to hold onto the skilled talent they have. 

The share of organisations reporting employee turnover levels of 20 per cent or more has reached 34 per cent, the highest level recorded since the Work Outlook report series commenced in 2023.

The most-cited reasons for high levels of turnover were excessive workloads (26 per cent) and unattractive roles (21 per cent). See a full breakdown below.

What’s more, the findings indicate that skills shortages can lead to a vicious cycle of turnover and knowledge loss within an organisation.

“Statistical analysis shows the greater the skills gap in an organisation, the higher the employee turnover rate,” says McCann-Bartlett. 

As a result, identifying and filling skills gaps will be employers’ most critical retention strategy in 2025. 

While it’s encouraging to see a larger share of employers engaging in measures such as overseas hiring and increased training investment to address skills shortages, AHRI’s report also identified a concerning increase in employers actively excluding people with certain characteristics during recruitment.

“The slightly cooler labour market may be making it even harder for disadvantaged job seekers to find work,” says McCann-Bartlett. 

For instance, 25 per cent said their organisation excludes people who have a history of mental illness (compared to 18 per cent this time last year), while 15 per cent would exclude people aged 55 and above (compared to 11 per cent last year). 

“Employers who overlook diverse hiring opportunities risk shrinking their own talent pipeline at a time when every skilled worker counts.”

These findings make it clear that organisations’ increasing investments in training and overseas hiring must be backed up by inclusive employment practices to maintain a competitive advantage in the current talent market.

For more detailed insights, download the full AHRI report here.