Is Offshore Hiring Bad for Australian Jobs? An Honest Answer for Small Business Owners

Is offshore hiring bad for Australian jobs?

It can be, and 2026 shows where. Large employers replacing existing Australian staff with offshore teams do cost local jobs. A small business filling a role it could not afford locally is a different decision. The honest test is simple: are you replacing someone, or adding capacity that otherwise would not exist?

What does the evidence say about offshoring and local jobs?

The research is more uncomfortable than most offshore providers admit. Harrison and McMillan's study of US multinationals found that expansion into low-income countries was associated with a contraction in employment at home, with foreign workers acting as substitutes for US workers. Hummels and co-authors, using Danish data published in the American Economic Review in 2014, found that offshoring tends to raise high-skilled wages and lower low-skilled wages, and that workers displaced from offshoring firms lose more earnings than other displaced workers, low-skilled workers most persistently.

Australia in 2026 offers live examples. Telstra emails shared with the ABC suggested up to 650 Australian jobs could go, NAB's union said the bank planned 170 fewer Australian roles and 237 more in India and Vietnam, and Woolworths confirmed plans affecting hundreds of its 10,000 corporate staff in People, IT and Finance. University of Sydney researchers Wen Helena Li and Vikas Kumar argue the deeper risk is capability: many of these roles are graduate and early-career entry points, so losing them weakens the local talent pipeline. Attribution is also messy: Officeworks reportedly sent some technology, support and back-office roles to India and the Philippines while others were replaced by AI, so not every cut is an offshoring cut. The authors note that job numbers are hard to pin down because some came from leaks.

Is small business offshoring the same as corporate offshoring?

No, and the numbers show why. Australia has 2,656,469 small businesses with fewer than 20 employees, 97.3% of the 2.73 million businesses remitting GST, and 64% of all businesses are non-employing. Small businesses employ 5.165 million people, 39% of private sector employment. A sole operator or a five-person firm has no existing admin team to replace, and its constraint is usually money and owner time rather than a preference for overseas staff.

The cost of that constraint is measurable. A ConnectOS survey reported by HRD Australia found 26% of employers declined new business and 27% lost or delayed contracts because they could not secure the talent they needed. A locally employed administrator on a $60,000 salary costs AUD$255,727 over three years in NSW once superannuation, payroll tax, workers' compensation, desk space, software and recruitment are counted, against AUD$68,400 for an offshore hire, excluding Pear Tree's one-time placement fee. For many owners that gap decides between hiring and not hiring at all.

Which Australian jobs does offshore hiring actually affect?

Mostly back-office work at larger employers, not trades or most professional roles. Jobs and Skills Australia's 2025 Occupation Shortage List found 293 of 1,022 occupations (29%) in national shortage, down from 33% in 2024 and a 36% peak in 2023. Almost one in two technician and trades occupations are in shortage, and 39% of professional occupations, but no clerical or administrative occupation was in persistent shortage from 2021 to 2025.

That last point deserves honesty. Admin roles are not scarce in Australia, so the case for offshoring them is affordability, not unavailability. A softer labour market sharpens the question: unemployment rose to 4.7% in September 2026, employment fell by 39,000 and underemployment was 6.3%. Owners should be able to explain their choice.

When is offshore hiring the wrong call for your business?

When it displaces someone or removes a local pathway you could realistically fund. This is our view of where the line sits.

How can a small business offshore responsibly?

Add capacity rather than swap people, pay fairly, and keep the local roles that need to be local. Hire directly so the person is a named member of your team, not an anonymous seat in an agency where the worker may see only a fraction of what you pay. Pear Tree's model is a one-time placement fee plus a flat $400 monthly management fee per hire, with every placement carrying a six-month replacement guarantee and a 90% retention rate against an industry average of around 60%.

Be open with your existing team before you hire. Explain what the role is, what it frees them to do and that it is not a replacement, because trust inside a small team is worth more than the saving. Write down why you made the hire, which also helps if a customer, supplier or staff member asks.

Then use the freed capacity. If an offshore administrator gives you back ten hours a week to sell, quote or serve clients, the revenue that follows is what funds the next local hire.

The bottom line for Australian small business owners

Offshore hiring is bad for Australian jobs when it replaces existing local staff, and the 2026 corporate examples show that risk is real. It is a different decision for a small business adding capacity it could not otherwise afford, provided the owner is honest about which one they are doing. Pear Tree, with offices in Sydney, Auckland, Hawke's Bay, Cebu, Manila and Cape Town, has placed talent with 750+ Australian and New Zealand businesses on a direct-hire model.

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About the author

Nick, Co-Founder of Pear Tree, leads sales, partnerships and business development. Pear Tree connects Australian and New Zealand businesses directly with vetted offshore professionals from the Philippines and South Africa, with no agency middleman.