Australian employers warn of strain as skilled migration gaps disrupt operations
Australian employers are delaying projects, scaling back services and pushing staff to capacity as persistent skill shortages collide with constrained access to overseas talent, new national research shows.
The findings, from one of the only employer-led surveys of its kind in Australia undertaken by The Employee Mobility Institute (TEMi) Immigration Advisory Group, reveal that workforce shortages are no longer a future risk, but an immediate operational issue across industries.
More than three in four employers (77.42%) say they simply cannot find the skills they need locally, while 64.52% report there are not enough candidates in the market to fill rolls.
As a result, businesses are increasingly turning to skilled migration, not as a first option, but as a last resort.
“Employers are not looking offshore by preference, they are doing it because they have run out of local options,” said TEMi Immigration Liaison Officer Jamie Lingham.
From workforce gap to operational pressure
The consequences of those shortages are already being felt inside organisations.
Nearly half of employers (48.39%) report reduced service capacity, while 45.16% say existing staff are under increased workload pressure, raising concerns about burnout.
At the same time, 38.71% report delays or cancellations to projects, and a staggering 45.16% say they are unable to grow or take on new work.
The data paints a clear picture: workforce shortages are now constraining business performance, not just recruitment pipelines.
“This is no longer just a hiring challenge, it is an operational one” Mr Lingham said.
“When employers cannot access the skills they need to meet demand, the impact flows directly through to service delivery, staff wellbeing and growth.”
Migration as a targeted solution
Despite ongoing public debate, the research shows employers are not broadly reliant on overseas labour.
Local hiring remains the dominant strategy, with 64.52% of organisations prioritising domestic recruitment and only turning to migration when those efforts fail. Only 3.23% say they primarily rely on overseas recruitment.
Even where migration is used, its footprint is relatively small: more than half of employers report overseas workers make up less than 10% of their workforce, and 34.38% say fewer than 5% of skilled roles are filled by overseas foreign nationals.
Instead, migration is being used in a highly targeted way, to fill critical gaps that cannot be addressed locally.
This is reflected in strong employer sentiment, with 86.2% agreeing that skilled migration complements, rather than replaces, local hiring.
A system under strain
While demand for skilled migration remains strong, employers say the system itself is adding to workforce pressures.
Three quarters (75.76%) identify visa processing times as a major challenge, alongside cost (54.55%) and administrative complexity (36.36%).
“According to Settlement Services International, skilled migrants contribute over $6bil to the country and immediately fill critical skills gaps for projects, many of which do not have the luxury of time to be completed” Mr Lingham said.
“The Department of Home Affairs needs to look at applications with a 3D lens, as opposed to being one-dimensional when managing processing priorities”.
At the same time, many organisations are adapting by turning to workers already in Australia, with 32.26% reporting increased reliance on onshore visa holders as a faster and more practical pathway.
Reliance set to continue
Looking ahead, employers expect little relief from workforce shortages.
Nearly seven in ten (69.70%) expect their reliance on employer-sponsored migration to remain steady, while more than a quarter (27.27%) anticipate it will increase. Only 3.03% expect this need to decline.
For many organisations, overseas workers are now embedded in day-to-day operations, with more than 75% describing them as essential or very important to their ability to function.
A structural workforce issue
The findings highlight a persistent gap between labour demand and local supply, particularly in specialist technical and operational roles.
“It was striking to see how consistently employers across industries reported the same issue: the skills they need are simply not available locally,” Mr Lingham said.
“What that tells us is this is not cyclical, it’s structural and the training pipeline of local workers is drying up.”
About the research
The Employer Perspectives on Skilled Migration in Australia survey was conducted by The Employee Mobility Institute (TEMi) Immigration Advisory Group between February and March 2026, capturing responses from organisations across sectors including healthcare, technology, engineering and financial services.
The survey remains open as part of an ongoing national research initiative.
The 30-page Employer Perspectives on Skilled Migration in Australia Report (February-March) is available here.
