Australian Millennial managers look to offshoring to solve global talent shortage problem

Australian Millennial managers look to offshoring to solve global talent shortage problem

By Cloudstaff
27 March 2023
Partner Content

New research reveals that more than half of Australia’s next-gen leaders are considering offshoring to solve the ongoing talent shortage facing their businesses. 

In a sign that a generational shift is taking place in attitudes towards offshoring, more than half (55 per cent) of Millennial managers already understand that hiring overseas workers will be essential to tackling their skills gaps compared to only one in five (19 per cent) so-called Baby Boomers. 

As a further sign of a permanent shift in attitudes, almost two-thirds (63 per cent) of up-and-coming Gen Z managers understand that offshoring roles will be vital to the growth prospects of their business.

The research was commissioned by Cloudstaff, recently named one of Australia's fastest-growing companies for the third year in a row.

According to Cloudstaff VP of growth Chris McDonald, the research findings indicate the next generation of leaders climbing the corporate ladder have a more global point of view and a more pragmatic approach to recruitment.

“The workforce has changed considerably since Baby Boomers started out in their careers”, McDonald said. 

“Australia already relies heavily on overseas workers in the form of migration. In fact, the 2021 Australian census showed that for some professions such as general accounting, more than half (51 per cent) of the current Australian workforce was born overseas. 

“It’s therefore not surprising that younger leaders are more open to working across borders.”

Despite this encouraging generational shift, Australia’s Millennial managers lag behind their UK and US counterparts, with almost two thirds (63 per cent) of UK Millennial managers and almost three quarters (73 per cent) of US Millennial managers indicating they are on board with offshoring.

By comparison, Baby Boomers across the three countries were the generation most reluctant to consider offshoring jobs: only 19 per cent of Australian Boomers were open to employing overseas-based workers, compared to 16 per cent from the UK and 23 per cent from the US.

“The days of people needing to live close to their workplace are well and truly over”, McDonald said. 

“Smart companies today hire where the talent lives. While the tech industry pioneered that model years ago, COVID ended up being a worldwide training program for every company globally in how to manage remote workforces and work with remote colleagues.”

The study also found that while Australian hiring managers across all age groups were less likely to consider offshoring than their US or UK counterparts, overall they found it more difficult to recruit. 

Two-thirds (67 per cent) of Australian managers surveyed said that over the last two years it had been hard to hire people with the skills needed to operate their business effectively compared to 45 per cent in the UK and 56 per cent in the US. 

Across all three markets and all age groups, Australian Baby Boomers found hiring the right people most difficult, with 75 per cent admitting it had been hard over the past two years.

“The reality is that available Australian talent pools have all but run dry”, said McDonald. 

“There simply aren’t enough working-age people in the country to fill open roles and drive economic growth.

“With specialist skills severely lacking onshore, accessing these roles offshore means Australian workers and the Australian economy are better positioned to thrive and grow."

The openness of younger generations to consider offshoring is linked qualitatively to their frustrations with traditional recruiting practices. 

Across all three countries, Millennial managers were most likely to say that the recruitment process - writing job descriptions, placing ads, conducting interviews, organising onboarding - takes up far too much of their time (Australia 73 per cent, UK 68 per cent, US 74 per cent). In comparison, older managers were least likely to find the recruitment process time consuming (Australian Baby Boomers 48 per cent, UK 33 per cent, US 42 per cent).

The time-consuming and frustrating nature of recruitment has become so bad that Australian Millennial managers were most likely to be risking physical and mental burnout with six in 10 declaring that the hiring process was so hard that they simply gave up and took on the extra work themselves rather than trying to hire the staff they need. This meant that Australian Millennials were the hardest hit by recruitment burnout across all age groups in all three markets. 

Boomers across all three markets were least likely to be risking burnout with only one-fifth in the US, UK and Australia taking on the extra work themselves. 

“With unemployment at all-time lows, it’s no surprise that hiring staff in this current environment is hard and time consuming”, said McDonald. 

“The burden on business owners and managers and the risk of physical and mental burnout is clear. But if companies are solely looking for talent based in Australia, the only option they have available is to poach staff from other firms. 

“This results in spiralling wages and creates a constant cycle of hiring, training and hiring again.” 

McDonald said that the process of outsourcing jobs overseas was a reality for many Australian companies of all types and all sizes but noted that it was not often talked about publicly. 

“While this research indicates a generational shift, it also highlights a particular mindset: a global view of the world that values the contribution an individual can make, whether they sit in Manila or Melbourne,” McDonald said.

“Many of the small businesses we work with have MDs and CEOs over 55 and have been successfully outsourcing functions overseas for many years. 

“This isn’t hard. It just needs a small leap of the imagination.”

You can read more about Cloudstaff’s research in its latest white paper

More from Cloudstaff

Australian Millennial managers look to offshoring to solve global talent shortage problem
Partner Content
New research reveals that more than half of Australia’s next-gen leaders are cons...