Australia’s AI ambitions face growing workforce challenges as technology employment declines and demand for specialist skills rises, according to industry reports.
The Australian Computer Society’s Digital Pulse 2026 report found that the technology workforce shrank by 0.3% in 2025, despite projections of a need for 259,000 additional technology professionals by 2035.
Research from Hays, ISACA and Gartner also points to shortages in AI, machine learning and cybersecurity skills.
Tech workforce gap widens
Australia’s technology workforce is projected to grow at twice the rate of the overall workforce. Meanwhile, AI is already affecting 70% of technology workers’ tasks, increasing demand for skills in AI development, security and governance.
Around 150,000 businesses report skills deficiencies, including 40% of those already using AI. As adoption expands, deploying AI agents is adding to demand for technical expertise and oversight.
AI and cyber skills in demand
Hays research found that 83% of employers seek technical and digital skills, with AI and machine learning shortages reported by 28% and cybersecurity by 26%.
ISACA research highlights understaffed cybersecurity teams, gaps in AI incident response and governance frameworks struggling to keep pace with adoption. These weaknesses could make it harder for organisations to scale AI while managing emerging security risks.
AI adoption raises skills needs
Gartner has highlighted the complexity of deploying and scaling AI agents beyond initial experimentation, increasing the need for specialised technical, operational and governance capabilities.
For Australian employers, addressing the widening skills gap will require stronger technical training, upskilling existing employees and recruitment in AI, cybersecurity and governance.
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