Migrants now make up 6% of Australia's workforce as skills shortages persist

Recent migrants are playing an increasingly important role in Australia's labour market, accounting for 6 per cent of the country's workforce in 2026, up from 3.5 per cent in 2007, according to new research by the Australian Industry Group (Ai Group).

The findings highlight the growing reliance of Australian employers on overseas talent to address persistent skills shortages, particularly across industrial trades, healthcare and care services.

The research note, published on November 2, draws on Australian Bureau of Statistics (ABS) labour and population data to examine the employment contribution, educational qualifications and occupational distribution of migrants who arrived in Australia within the past five years.

Ai Group Chief Executive Innes Willox said the growing share of recent migrants reinforced the importance of maintaining skilled migration pathways to support businesses and essential services.

"The share of recent migrants in Australian workforce has almost doubled in the past 20 years, reaffirming the need to protect and support the skilled labour streams for Australian companies to support and care for communities," Willox said.

The increase has been particularly pronounced since the COVID-19 pandemic. The share of recent migrants in the labour force rose from approximately 4.5 per cent to 6 per cent over the past two years, equivalent to around 222,000 additional employees compared with a scenario in which migration rates had remained unchanged.

The research also highlights the educational contribution of overseas workers. Almost 58 per cent of recent migrants held university qualifications in 2025, compared with 32.9 per cent of Australian-born workers. This included 18.9 per cent with postgraduate qualifications and 38.8 per cent with undergraduate degrees.

Their educational profile has supported their representation in knowledge-intensive industries, including information and communications technology (ICT), engineering, healthcare and professional services, where employers continue to face challenges sourcing specialised skills domestically.

Recent migrants are also becoming increasingly important across occupations facing persistent labour shortages. In 2025, they accounted for 21 per cent of food trades workers and 17.2 per cent of cleaners. They represented 14.5 per cent of hospitality workers, reflecting the sector's reliance on overseas labour.

Their contribution is also expanding across technical and operational roles. Recent migrants accounted for 6.5 per cent of machine and plant operators and 4.8 per cent of automotive trades workers in 2025, compared with 1.8 per cent and 3.2 per cent, respectively, in 2015.

In the care sector, migrants accounted for 9.3 per cent of carers and 6.3 per cent of health professionals, according to Ai Group's analysis. Their participation is particularly relevant as Australia faces growing demand for aged care and healthcare services amid an ageing population.

Across industries, accommodation and food services recorded the highest representation of recent migrants, who accounted for 14.3 per cent of the workforce in 2025, up from 9.7 per cent in 2015. Migrants also made significant contributions to administrative and support services, healthcare and social assistance.

The research noted that newly arrived migrants often enter industries with relatively lower barriers to employment, including hospitality, food services and cleaning. However, difficulties in securing recognition of overseas qualifications and previous work experience can also result in some migrants taking up jobs below their skill levels.

The increase in recent migrant participation has largely been driven by temporary visa holders rather than a significant expansion in permanent migration.

In 2025, temporary visa holders accounted for 81 per cent of net workforce-related migration arrivals, including international students, working holiday makers and skilled temporary migrants. Permanent migration numbers, meanwhile, have remained relatively stable over the past two decades.

Although net overseas migration has declined substantially from its record high in 2023 following tighter visa settings and policy reforms, temporary migrants continue to account for around 80 per cent of migration inflows when visitors and Australian and New Zealand citizens are excluded.

Willox said migrants were contributing to industries critical to Australia's economic and social infrastructure, including housing construction, industrial development and care services.

"It is critical Australia maintains its skilled migration pathways because without migrants we would not be able to deliver the services and goods the community expects," he said.

The findings underscore the growing role of migration in addressing Australia's workforce requirements, with overseas talent supporting both immediate labour shortages and longer-term skills, productivity and investment needs.