Offshore Hiring Trends 2027: What AU & NZ Businesses Should Plan For

What should AU and NZ businesses plan for in offshore hiring in 2027?

Steady demand, AI-shaped roles and rising Philippine pay pressure, with privacy and employment rule changes arriving at the edges. The evidence points to 2027 rewarding owners who budget a pay review, write down how each hire is engaged and choose a market by role, not by headline cost.

This guide is for owners and managers planning next year's hiring. We place talent from the Philippines and South Africa, so we have a stake in the question, and these are our readings of the evidence rather than forecasts. Most of the rule changes below are proposals, and this is general information, not legal advice.

What do the 2027 trends look like at a glance?

Seven shifts, each with something to plan for. Table 1 sets them out, and the sections below explain the ones that need it.

One caution on the evidence. The best recent survey of Australian offshore users was run by a vendor and covers organisations already using or considering offshoring, so it shows direction among adopters and not the market as a whole. We have used it as a signal and said so where it matters.

Will demand for offshore hiring keep growing in 2027?

Probably among businesses that already offshore, though the case is thinner than it was. In the ConnectOS survey of 214 organisations, 66% expected to increase offshore hiring over the next 24 months (16% significantly), 31% expected no change and 3% expected to scale back. The reasons given were skill shortages and wage inflation (39%), compliance cost and risk (37%) and time to fill (34%).

Labour market data pull the other way. Australian unemployment was 4.7% in September 2026 (trend 4.6%) and New Zealand's reached 5.6% in the June quarter, its highest since September 2015. Jobs and Skills Australia found no clerical or administrative occupation in persistent shortage from 2021 to 2025. For admin and support roles, the argument for offshoring is affordability, not scarcity.

How will AI change offshore roles in 2027?

On the evidence so far, it changes the mix of work more than the number of people. In the same survey, 79% said offshore teams adopt AI at the same pace as onshore staff or faster, and data analyst (47%), AI engineer (35%) and automation specialist (32%) were the roles growing fastest. In July the Philippine industry body's chief executive, Jack Madrid, called AI "a real development" that the industry has "not really seen scale yet", and said entry-level staff affected by AI trials were redeployed.

Write down which AI tools your offshore staff may use with client data, and hire for judgement.

What is the Philippine industry expecting?

Slower headcount growth and a lower ceiling than it planned. In July 2026 the industry association IBPAP cut its 2028 outlook, citing rapid AI adoption, competition from emerging hubs including South Africa, Egypt, Poland, Vietnam, Colombia and Costa Rica, and geopolitical uncertainty. Table 2 sets out the figures.

On these figures revenue grows faster than headcount: about 6% against 3% in 2026 and about 7% against 1.5% in 2027. That fits the industry's stated shift from adding people to building an AI-ready workforce. Two cautions apply. The 2027 figure comes from one outlet, and it does not join up with the 2028 downside, where employment falls to 1.85 million, so treat them as separate scenarios.

The industry still employs about 1.9 million people, so this is a story of slower growth rather than a shrinking talent pool, although employment does fall in the downside case. What changes is the competition for the best people and your choice of markets.

How much pay pressure should you expect in the Philippines?

More than a flat rate suggests. Philippine inflation reached 7.8% in October 2026, up from 7.2% in September and the fastest since February 2023, with core inflation at 5.4% and transport costs up 20.1%. The central bank raised its policy rate by 50 basis points to 5.50% last month, and Chinabank Research expects a peak just above 8% in November, with core inflation staying above 5% until the first quarter of 2027. WTW's July survey of 408 Philippine organisations projects average pay rises of 5.1% for 2027, below the current inflation rate.

Minimum wages add a push at the bottom. Metro Manila's floor rose to PHP 755 a day on 26 September 2026, a further step to PHP 780 on 20 January 2027 is tied up in litigation and we treat it as unconfirmed, and Cebu's Class A rate rose to PHP 582 from 14 October. A professional on A$1,400 a month earns far above any floor, so the risk is retention: if pay lags prices, people leave. Our retention rate is 90% against about 60% for the industry average (company figures). We would budget a review in every hire's first year, and on an A$1,400 role a rise of 5.1% to 7.2% adds about A$930 to A$1,310 in year two, as our budgeting guide shows.

Which rules and dates matter for 2027?

Table 3 lists them with a status, because most are proposals and not law.

Three points need spelling out. First, the Australian privacy reforms are a draft. The exposure draft released on 31 August 2026 proposes 72-hour breach notification and a controller and processor framework, with commencement dates left blank. The commentary we read does not discuss overseas disclosure, so APP 8 and section 16C continue to apply as they do today.

Second, the proposed non-compete ban would apply below the $190,100 high-income threshold, but the sources we read do not say whether it reaches workers engaged overseas, so ask your adviser before assuming either way. Third, in New Zealand the Employment Relations Amendment Act 2026, including its five-part gateway test for contractors, has applied since 21 February. The preliminary election count on 7 and 8 November showed National, ACT and NZ First on track for 67 of a projected 131 seats, one over the 66 needed, with special votes still to count and the final result due on 27 November. Current law stays in force meanwhile, and we take no side.

How should you handle provider claims about direct hiring?

Some providers say hiring Filipino staff directly is now a criminal risk. Our reading of the primary texts, set out in our companion guide, is that the question is unsettled. The Labor Code's direct-hire ban concerns overseas employment, which it defines as work outside the Philippines, and the warnings we read cite no authority for extending it to remote staff.

Ask any provider which Philippine entity employs your worker, what licence it holds if it recruits for a fee, and whether it has written Philippine legal advice, and keep the answers in writing. Ask us the same questions.

Will offshoring face more scrutiny in 2027?

We expect so, and owners should be ready to explain their choice. 2026 brought job-cut announcements at large employers, some linked to offshoring or AI, including Telstra (up to 650 roles, per ABC in February), and the public debate rarely separates those cases from a small business adding capacity it could not otherwise afford.

The honest distinction is whether an offshore hire replaces someone or adds work that would not otherwise be done. The harm is real in the first case, and for many small businesses the hire is the second kind. Decide which you are doing, and be ready to say so to staff and customers.

How should an owner plan for 2027?

Five steps. Budget a pay review in the first year and hold a reserve, using the lines in our budgeting guide. Write down how each hire is engaged and who the legal employer is, and re-check it after the New Zealand result and when the Australian privacy bill is introduced. Decide in writing which AI tools staff may use with client data. Ask any provider the legal and security questions above and keep the answers. Run a paid trial task before committing.

The bottom line for Australian and New Zealand owners

2027 looks like a year of steady, more specialised offshore hiring with firmer pay and more paperwork, not a collapse or a boom. 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, but we cannot see 2027, so treat the dates above as a checklist, refresh your plan in January and ask every provider for answers in writing.

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.

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