Australia's Tech Skill Shortage: 2025 Market Scan
Australia's technology talent crisis presents a paradox in 2025. On one hand, some IT roles that have been in critical shortage for years—notably software engineers—have finally eased off national shortage lists. On the other hand, Australia requires 312,000 additional tech workers by 2030 to satisfy increasing demand, with more than 60,000 new tech professionals needed annually just to keep pace.
The Jobs and Skills Australia (JSA) Occupational Shortage List 2025 shows that software engineers are no longer in shortage in any state or territory—a remarkable shift for a role that has been listed as critically short every year since the JSA study began in 2021. This improvement reflects several factors: increased AI adoption reducing demand for traditional development roles, more Australian tech graduates entering the workforce, and a slight cooling in the overheated tech hiring market of 2022-2023.
Yet this easing in some areas masks deeper problems elsewhere. According to the Australian Computer Society's Digital Pulse report, the number of professional workers considering a career in tech has fallen dramatically in the past two years. Big businesses alone are suffering from a $3.1 billion loss each year due to digital skills gaps, a figure that could reach $16 billion by 2030. Meanwhile, 72% of Australian employers have resorted to sourcing IT talent internationally because domestic supply simply can't meet demand.
For Managed Service Providers operating across Sydney, Melbourne, Perth, and Brisbane, these shifting dynamics create both challenges and opportunities. The traditional approach—recruiting locally trained technicians—has become increasingly unviable as competition intensifies and costs escalate. As our comprehensive analysis of Australian MSP time zone advantages details, Australian businesses have unique geographic positioning that makes Philippines-based offshore staffing particularly effective.
This market scan examines Australia's tech talent landscape in 2025, identifying where shortages persist, which roles remain critical, and—most importantly—how successful Australian businesses are solving capacity challenges when traditional hiring falls short.
The Shifting Landscape: What's Changed in 2025
Australia's tech workforce dynamics have evolved significantly from the peak shortage years of 2021-2023. Understanding these shifts helps businesses make informed staffing decisions.
The Overall Employment Picture
The Jobs and Skills Australia data shows that just under one-third of all occupations (293 out of 1,022) are in national shortage as of 2025—down from 36% in 2023 and 33% in 2024. This represents the first sustained decline since JSA began collecting data in 2021.
For IT specifically, the improvement is even more pronounced. According to JSA, the majority of roles no longer in shortage come from the 'professionals' group, particularly in business, finance, engineering, and ICT roles. The report attributes this to sectors integrating artificial intelligence technology, with finance and technology especially progressing in digital skills development, including generative AI tools.
However, this headline improvement obscures significant ongoing challenges. While traditional software development roles have eased, emerging technology areas face acute shortages. Australia's AI strategy aims to unlock $600 billion of productivity potential, with generative AI alone projected to contribute $115 billion to the Australian economy. Yet 44% of senior executives cite the AI skills gap as the biggest hindrance to generative AI implementation.
The Graduate Pipeline Problem
Perhaps the most concerning metric: Australia produces only approximately 7,000 IT graduates annually. To meet the requirement of 312,000 additional tech workers by 2030, Australia would need to increase its annual tech graduate output nearly tenfold—an achievement that appears virtually impossible under current educational frameworks.
According to a separate Deloitte report, only 3% of tech employers believe IT graduates are job-ready, and three in five businesses believe their workforces have outdated digital skills. The education system is failing to produce both the quantity and quality of talent that Australian businesses require.
Geographic Concentration and Regional Disparities
Sydney accounts for approximately 35% of all MSP demand in Australia, with Melbourne and Perth also playing significant roles. However, this concentration creates challenging dynamics. In major metros, competition for talent is intense despite the overall easing of shortages. In regional areas, finding any qualified IT professionals remains extraordinarily difficult.
Perth organizations, particularly in mining and government sectors, face severe IT talent shortages, with 90% of leaders struggling to hire cybersecurity and cloud experts. This regional disparity means that national shortage statistics don't reflect the reality for businesses outside major population centers.
Which Roles Remain Critical
While software engineering has eased off shortage lists, several categories of IT roles continue to face severe talent gaps.
AI and Machine Learning Specialists
The AI boom has created explosive demand for professionals who understand machine learning, natural language processing, and generative AI implementation. According to research from Cisco's AI Workforce Consortium, 78% of ICT roles now include AI technical skills. Seven out of the 10 fastest-growing ICT roles were AI-related, including AI/ML engineers, AI risk and governance specialists, and NLP engineers.
The challenge? Traditional educational pathways haven't adapted fast enough. Tech skills become outdated in just 2.5 years according to Harvard Business Review, meaning that even recent graduates often lack current AI competencies. Australian businesses are competing globally for a limited pool of AI talent, and most are losing that competition to higher-paying markets or well-funded startups.
Cybersecurity Analysts and Engineers
Despite improvements in some IT categories, cybersecurity remains in critical shortage. In 2024, Australian organizations reported 1,113 data breaches—a 25% jump from the previous year, with ransomware accounting for 60 breach notifications alone. This escalating threat landscape drives demand for cybersecurity professionals far beyond available supply.
CompTIA's global research projects 367% growth for cybersecurity analysts and engineers through 2035, and Australia faces this shortage as acutely as any market. As our analysis of 24/7 IT support requirements notes, 58% of organizations say cybersecurity staff shortages put them at significant risk—a concern that's particularly relevant given Australia's role as a frequent target for state-sponsored cyber attacks.
Cloud Engineers and Architects
Cloud adoption has become standard practice across Australian businesses, with managed cloud backup and disaster recovery services now considered critical rather than optional. Yet finding professionals with expertise across AWS, Azure, and Google Cloud—plus security knowledge and hybrid architecture understanding—remains extremely difficult.
According to ThinkOn's market research, 90% of Australian IT leaders report difficulty hiring cloud, cybersecurity, and DevOps specialists. Companies are paying up to 19% salary premiums to secure skilled IT staff in these areas, yet positions still sit unfilled for months.
DevOps Engineers and Site Reliability Engineers
As Australian businesses adopt more sophisticated development and deployment practices, DevOps expertise has become essential. DevOps engineers bridge development and operations, requiring both coding skills and infrastructure knowledge—a rare combination.
The shift to distributed development teams, accelerated by remote work adoption, has made DevOps expertise even more critical. As our guide on managing remote IT teams explains, modern DevOps practices are essential for coordinating work across geographic boundaries.
Data Scientists and Analytics Engineers
Data-driven decision-making has transformed from competitive advantage to business necessity, creating sustained demand for data scientists and analytics engineers. The challenge extends beyond finding people who understand statistics and programming—businesses need professionals who can translate technical findings into business insights.
The MSP Technician Challenge
Here's where the picture gets particularly interesting for Australian MSPs. While some high-end specialized roles have eased, frontline helpdesk technicians, NOC analysts, and Level 1-2 support specialists remain difficult to hire across all Australian markets.
Why? Several compounding factors drive this shortage. Experienced workers have moved up into specialized roles, leaving gaps at entry levels. Traditional helpdesk work is increasingly seen as a stepping stone rather than a career, leading to 40% annual turnover rates. Remote work means helpdesk technicians can work for companies anywhere, making local hiring nearly impossible in smaller markets. And finally, Australian minimum wages and cost of living make entry-level IT positions expensive—often $55,000-70,000 AUD—yet many MSPs can't justify these costs for basic support work.
As our detailed analysis of overflow support needs explains, this creates an operational crisis for MSPs: you can't deliver service without frontline support, but you also can't afford domestic wages for routine work that could be handled offshore at 65-70% cost savings.
Why Traditional Hiring Falls Short
Australian businesses facing talent shortages typically attempt several standard solutions. In 2025, most are producing diminishing returns.
The Salary Arms Race Doesn't Solve Scarcity
Offering higher compensation helps you compete for available candidates, but it doesn't create candidates where none exist. When IT unemployment is low and specialized roles face severe shortages, escalating salaries just redistributes the same limited talent at unsustainable cost levels.
Companies are already paying 19% salary premiums for skilled IT staff in competitive markets. For MSPs operating on 20-30% margins, this compensation inflation makes it mathematically impossible to profitably deliver services while competing with enterprise IT departments and well-funded tech companies.
International Migration Faces Increasing Competition
Historically, Australian businesses relied on international talent to fill domestic gaps. The challenge in 2025: every developed economy faces similar shortages and is competing for the same global talent pool. Canada, the UK, New Zealand, and Germany have all ramped up tech migration strategies, intensifying competition for qualified international workers.
While migration remains part of the solution, it's no longer sufficient on its own. Visa processing times, compliance requirements, and competition from other markets make this a slow and unreliable solution for immediate staffing needs.
Training Programs Have Multi-Year Lead Times
Upskilling and reskilling initiatives are valuable long-term investments, but they don't solve urgent capacity problems. According to JSA data, ICT roles were more likely to face what JSA calls a 'long training gap' because it takes years to produce suitably skilled workers.
Given that tech skills have a half-life of 2.5 years, by the time your training program produces qualified workers, market demands may have shifted entirely. You end up training people for yesterday's problems, not tomorrow's opportunities.
The Suitability Gap Challenge
JSA noted that software and applications programmers faced a large "suitability gap" in 2025—meaning there are enough qualified applicants on paper, but they're not regarded as suitable due to lack of employability skills, experience, and specific technical competencies.
This suitability gap means that even when candidates are technically available, they're not hire-ready without extensive onboarding and training. For MSPs needing immediate capacity, this doesn't solve the problem.
Solutions That Are Actually Working
While traditional hiring struggles, innovative Australian businesses—particularly MSPs—are finding alternative approaches that solve talent shortages sustainably.
<table style="width:100%; border-collapse: collapse; margin: 20px 0;"> <thead> <tr style="background-color: #f4f4f4;"> <th style="border: 1px solid #ddd; padding: 12px; text-align: left;">Solution</th> <th style="border: 1px solid #ddd; padding: 12px; text-align: left;">Best For</th> <th style="border: 1px solid #ddd; padding: 12px; text-align: left;">Cost Savings</th> <th style="border: 1px solid #ddd; padding: 12px; text-align: left;">Time to Deploy</th> </tr> </thead> <tbody> <tr> <td style="border: 1px solid #ddd; padding: 12px;">Offshore Staffing (Philippines)</td> <td style="border: 1px solid #ddd; padding: 12px;">Helpdesk, NOC, Level 1-2 support, after-hours</td> <td style="border: 1px solid #ddd; padding: 12px;">68-75%</td> <td style="border: 1px solid #ddd; padding: 12px;">2-3 weeks</td> </tr> <tr style="background-color: #f9f9f9;"> <td style="border: 1px solid #ddd; padding: 12px;">Skills-First Hiring + Training</td> <td style="border: 1px solid #ddd; padding: 12px;">Entry to mid-level roles</td> <td style="border: 1px solid #ddd; padding: 12px;">10-20%</td> <td style="border: 1px solid #ddd; padding: 12px;">3-6 months</td> </tr> <tr> <td style="border: 1px solid #ddd; padding: 12px;">AI and Automation Tools</td> <td style="border: 1px solid #ddd; padding: 12px;">Reducing Tier 0 support needs</td> <td style="border: 1px solid #ddd; padding: 12px;">35-50% capacity gain</td> <td style="border: 1px solid #ddd; padding: 12px;">1-2 months</td> </tr> <tr style="background-color: #f9f9f9;"> <td style="border: 1px solid #ddd; padding: 12px;">White-Label / MSP Partnerships</td> <td style="border: 1px solid #ddd; padding: 12px;">Specialized services, security, compliance</td> <td style="border: 1px solid #ddd; padding: 12px;">40-60%</td> <td style="border: 1px solid #ddd; padding: 12px;">1-2 weeks</td> </tr> </tbody> </table>
Offshore Staffing: The Philippines Advantage
The most transformative solution for Australian MSPs has been strategic use of Philippines-based offshore staffing. As detailed in our comprehensive guide to why the Philippines dominates remote staffing, Australia has unique advantages when working with Filipino professionals.
Time zone alignment: Perth shares the same time zone as Manila (UTC+8). Sydney and Melbourne are only 2-3 hours ahead, creating substantial daily overlap for real-time collaboration. This is dramatically better than the 12-15 hour offset US companies face.
English proficiency and cultural fit: As the world's third-largest English-speaking nation, Filipino professionals communicate clearly with Australian clients. Decades of serving Australian businesses have created strong cultural alignment and understanding of Australian business norms.
Cost structure: 68-75% cost savings compared to Australian domestic hiring for equivalent roles. A Level 1 helpdesk technician in Sydney costs $55,000-70,000 AUD fully loaded; the same role filled by a Philippines-based technician costs $15,000-22,000 USD.
Proven BPO infrastructure: Over 788 established BPO companies with experience serving Australian businesses, mature security frameworks (ISO 27001, SOC 2), and established hiring, training, and retention practices.
The cultural intelligence required to work effectively with Filipino professionals is straightforward, and remote onboarding practices have matured significantly.
For Australian MSPs specifically, 72% of employers are already sourcing IT talent internationally, with the Philippines as the preferred destination. The time zone advantage makes this particularly effective for Australian businesses compared to North American or European alternatives.
Skills-First Hiring with Rapid Onboarding
Given that many "qualified" candidates face suitability gaps anyway, some Australian businesses are shifting to skills-first hiring—focusing on aptitude, certifications, and demonstrated abilities rather than traditional degrees and years of experience.
This approach works particularly well for roles where company-specific knowledge matters more than general expertise. By hiring candidates with baseline technical competence and strong learning ability, then investing in intensive onboarding, businesses can create the specific talent they need rather than competing for perfect-fit candidates who don't exist.
Automation and AI-Powered Support
While AI is creating new role demands, it's also reducing the need for human involvement in certain tasks. Password resets, basic troubleshooting, system monitoring, and tier-0 support can increasingly be handled by automation and AI-powered tools.
As our analysis of how IT helpdesk services cut costs demonstrates, intelligent automation combined with strategic human support creates 35-50% capacity increases without adding headcount.
Australian businesses that implement AI-powered triage systems, automated ticket routing, and self-service knowledge bases can dramatically reduce the number of human technicians required while improving response times and consistency.
White-Label and MSP Partnerships
Smaller Australian MSPs facing capacity constraints are increasingly partnering with specialized providers for capabilities they can't staff internally. White-label NOC services, managed security operations, and specialized expertise (cloud, cybersecurity, compliance) allow MSPs to deliver comprehensive services without hiring full teams in every discipline.
According to market research, nearly 50% of Australian businesses plan to overhaul backup and recovery systems by 2025, driven by rising cyber threats. Many are turning to MSP partnerships rather than building internal capability, creating opportunities for MSPs who can provide these services at scale.
The Regional Reality: Market Variations Across Australia
The tech talent shortage manifests differently across Australian states and territories. Understanding these regional variations helps businesses make informed decisions.
Sydney and New South Wales
Tech workforce: Approximately 300,000+ tech workers
Market dynamics: Highest concentration of tech companies, most intense competition, premium pricing for talent
Key challenge: Competing with major tech companies, financial services firms, and well-funded startups for limited talent. Even offering competitive salaries doesn't guarantee success when candidates have multiple offers.
Common solution: Hybrid models combining selective local hiring for client-facing roles with offshore teams handling operational support. Many Sydney MSPs have embraced overflow support models to manage capacity constraints.
Melbourne and Victoria
Tech workforce: Approximately 250,000+ tech workers
Market dynamics: Strong university pipeline, diverse industry mix, slightly less competitive than Sydney
Key challenge: Graduates often relocate to Sydney or internationally for higher compensation. Retention is as difficult as recruitment.
Common solution: University partnerships for intern-to-hire pipelines combined with offshore support for scalable capacity. Melbourne MSPs benefit from strong local talent for senior roles while using Philippines teams for frontline support.
Perth and Western Australia
Tech workforce: Approximately 70,000-80,000 tech workers
Market dynamics: Mining and resources sector dominates, periodic boom/bust cycles, geographic isolation intensifies talent scarcity
Key challenge: 90% of Perth leaders struggle to hire cybersecurity and cloud experts. Regional isolation means international talent is less interested in relocating.
Common solution: Heavy reliance on offshore staffing, particularly for roles that don't require on-site presence. Perth's perfect time zone alignment with Manila (UTC+8) makes Philippines-based teams particularly effective.
Brisbane and Queensland
Tech workforce: Approximately 140,000+ tech workers
Market dynamics: Growing tech sector, government investment in innovation precincts, competition from interstate opportunities
Key challenge: Smaller local talent pool relative to Sydney/Melbourne, brain drain to larger metros
Common solution: Remote hiring from across Australia combined with offshore teams. Queensland MSPs increasingly use hybrid staffing models rather than competing in expensive local markets.
The MSP-Specific Challenge in Australia
While all Australian businesses face tech talent shortages, MSPs experience unique pressures that traditional solutions don't address.
The Breadth Requirement
MSP technicians need broad knowledge across multiple technologies—a generalist skill set that's increasingly rare as the industry trends toward specialization. Finding candidates who can troubleshoot Microsoft 365, AWS, on-premise servers, network issues, and security incidents while providing excellent customer service is extraordinarily difficult.
According to industry data, the average MSP technician needs working knowledge of 15-20 different technology platforms. Building this breadth through traditional hiring is nearly impossible when most candidates specialize in one or two areas.
The Compensation Ceiling
Australian MSPs operate on margins typically between 20-30% net profit. When domestic tech wages rise 19% in competitive markets, MSPs can't simply pass those costs to clients without losing accounts. This creates a compensation ceiling that makes competing for talent unsustainable.
As our MSP staffing crisis analysis details globally, many MSPs report they simply cannot afford market-rate compensation for the volume of staff they need—an issue that's particularly acute in high-cost Australian markets.
The 24/7 Coverage Requirement
Many MSP clients expect after-hours support, yet finding Australian technicians willing to work nights or be regularly on-call has become nearly impossible in competitive markets. Companies are already struggling to fill daytime positions; overnight roles sit vacant indefinitely.
This is where the Philippines time zone advantage becomes transformative. As our Australian MSP time zone analysis explains, Filipino teams working normal 9-5 hours in Manila provide extensive overlap with Australian business hours plus natural after-hours coverage—all without anyone working graveyard shifts.
The Training Investment Paradox
MSPs invest heavily in training new hires (3-6 months to full productivity), only to watch them leave for higher-paying enterprise roles once they've gained experience. This vicious cycle—invest in training, lose trained staff, repeat—makes traditional hiring economically unsustainable for many Australian MSPs.
Offshore teams show dramatically better retention because Philippines-based professionals value long-term employment with international companies, viewing MSP roles as stable careers rather than stepping stones. Average tenure for Philippines-based MSP technicians is 3-5 years versus 18-24 months for Australian helpdesk staff.
What to Expect Through 2026 and Beyond
Several trends will shape Australia's tech talent landscape over the next several years:
Continued Growth in Demand Despite AI
While AI will automate some tasks, it's also creating net new demand for tech talent who can implement, maintain, and optimize AI systems. Australia's $600 billion AI productivity opportunity requires people to capture it—and current trajectories suggest demand will continue outpacing supply for the foreseeable future.
Increasing Sophistication of Offshore Models
As our analysis of outsourcing plus AI explores, the combination of offshore teams and AI tools is becoming increasingly sophisticated. Australian companies that embrace these hybrid models gain significant competitive advantages.
The gap between offshore and domestic performance continues narrowing as BPO providers invest in training, security certifications, and MSP-specific expertise. Within 2-3 years, operational differences between well-managed offshore teams and domestic teams will be minimal—while cost differentials remain substantial.
Greater Acceptance of Remote-First Operating Models
The pandemic normalized remote work, and that shift is permanent. For Australian businesses, this means geography is less relevant for many roles. The question shifts from "where can we hire?" to "how can we build the most effective team regardless of location?"
MSPs that embrace this reality—using offshore teams strategically, implementing strong remote management practices, and focusing on outcomes rather than location—will thrive. Those clinging to traditional local-only hiring will face increasing competitive disadvantage.
Potential Policy Changes
With tech talent shortages cited as a critical national economic issue, government policy could shift to address the gap. Potential changes include reformed skilled migration pathways, increased funding for tech education, and incentives for businesses investing in local training.
However, even optimistic policy scenarios won't solve the immediate shortage. Businesses must plan based on current realities, not hoped-for future interventions.
Taking Action: A Framework for Australian Businesses
If you're facing tech talent challenges, here's a strategic approach:
Step 1: Quantify Your Actual Need vs. Available Budget
Calculate what unfilled positions cost you in lost revenue, overtime burden on existing staff, client dissatisfaction, and opportunity cost of business you can't take on.
Often, when businesses calculate true costs, offshore staffing at $15,000-22,000 USD per technician becomes dramatically more attractive than leaving positions unfilled or paying $65,000-85,000 AUD domestically.
Step 2: Evaluate All Options Objectively
Consider offshore staffing for operational roles, automation to reduce headcount needs, white-label partnerships for specialized services, skills-first hiring plus intensive training, and strategic use of contractors for project work.
Most successful Australian businesses use a hybrid approach rather than relying on a single solution.
Step 3: Pilot Before Scaling
Don't bet your entire operation on an untested approach. Start with one Philippines-based technician handling after-hours tickets for 2-3 clients, measure results over 60 days, refine processes, and scale what works.
Step 4: Build for Sustainability
The talent shortage isn't going away. Solutions that work for six months but aren't sustainable long-term just delay the problem. Focus on building models that can scale as your business grows and that don't depend on constantly winning recruiting battles in impossible markets.
The Bottom Line: Adaptation is Essential
Australia's tech talent shortage in 2025 shows improvement in some areas while worsening in others. Software engineering roles have eased, but AI, cybersecurity, and cloud specialists remain critically short. The fundamental challenge persists: Australia requires 312,000 additional tech workers by 2030, but produces only 7,000 IT graduates annually.
For Australian MSPs and businesses, waiting for the market to normalize or hoping migration policy will solve everything means falling progressively behind competitors who are adapting now.
The data is clear: 72% of Australian employers already source talent internationally. Companies paying 19% salary premiums still can't fill critical roles. The education system cannot scale fast enough to meet demand, and even qualified graduates often lack practical skills.
The Australian businesses that thrive through 2026 and beyond won't be those who solved the talent shortage through traditional hiring—because that's largely unsolvable. They'll be the ones who adapted their operational models to succeed despite it.
Offshore staffing, automation, skills-first hiring, and strategic partnerships aren't temporary workarounds. They're the new permanent reality of how sophisticated Australian organizations build technical capacity in a talent-constrained world.
The question isn't whether to adapt—it's whether you'll implement solutions while you still have competitive opportunities, or wait until rivals have built insurmountable advantages.
Ready to Solve Your Australian Tech Staffing Challenges?
Konnect specializes in connecting Australian businesses and MSPs with dedicated IT professionals from the Philippines who integrate seamlessly into your operations—providing the technical capacity you need at sustainable cost structures.
What we provide:
Time zone alignment unique to Australian businesses: Perth shares Manila's exact time zone (UTC+8). Sydney and Melbourne enjoy 2-3 hours' offset, creating extensive daily overlap for collaboration while enabling natural after-hours coverage.
Pre-vetted IT professionals with Australian business experience: Our team members understand Australian business culture, communication styles, and compliance requirements. They're trained on common MSP platforms (ConnectWise, Autotask, Datto) and ready to integrate with your operations.
Rapid deployment: Unlike 60-90 day domestic recruitment cycles, we deploy qualified technicians in 2-3 weeks, allowing you to address immediate staffing needs without months of waiting.
Flexible engagement models: Whether you need one helpdesk technician, an entire NOC team, or after-hours coverage specialists, we scale precisely to your requirements without long-term commitments.
Complete infrastructure and HR management: We handle Philippine employment, payroll, benefits, facilities, and all administrative overhead so you focus on service delivery.
68-75% cost savings: Access skilled IT professionals at $15,000-$22,000 USD annually compared to $55,000-$70,000 AUD for equivalent domestic roles, with no compromise on quality.
Schedule a consultation to discuss how offshore staffing can solve your tech talent challenges sustainably.
📅 Schedule a meeting: https://meet.brevo.com/konnectph
✉️ Email us: hello@konnect.ph
Let's talk about building technical capacity that leverages Australia's unique time zone advantages while operating at sustainable cost structures.
About the Author
Vilbert Fermin is the founder of Konnect, a remote staffing company connecting North American and Australian businesses with top Filipino talent. With deep expertise in IT support and remote team management, Vilbert helps MSPs access skilled technical professionals without the overhead of full-time domestic IT staff. His mission is to showcase Filipino excellence while helping businesses stay protected, productive, and competitive through strategic remote staffing.
