Australia’s migration landscape is changing once again. After experiencing record levels of migration following the reopening of international borders, the Australian Government has signalled a gradual reduction in Net Overseas Migration (NOM) over the coming years. While the headlines often focus on migration “cuts,” the reality is far more nuanced and for Australian employers, understanding the distinction is essential.
Many businesses continue to face ongoing labour shortages despite improvements in the economy. Skilled workers remain difficult to source across numerous industries, and employer-sponsored migration has become a critical workforce strategy. As Net Overseas Migration gradually declines, employers should not assume that opportunities to sponsor overseas workers are disappearing. Instead, businesses should recognise that competition for skilled talent is likely to increase.
The organisations that begin planning now will be in a much stronger position to meet their workforce needs through 2028.
Australia’s Net Overseas Migration Is Returning to Sustainable Levels
The Australian Government’s population forecasts indicate that Net Overseas Migration will continue to decline over the next several financial years as migration returns to more sustainable, long-term levels.
Current projections estimate:
- 260,000 in 2025–26
- 245,000 in 2026–27
- 225,000 in 2027–28
These figures remain historically strong. However, they represent a significant moderation compared with the unusually high migration experienced immediately after Australia’s borders reopened following the COVID-19 pandemic.
The surge in migration over recent years was largely driven by temporary entrants, particularly international students, working holiday makers, and temporary visa holders returning to Australia after border restrictions ended.
The Government has consistently stated that these elevated levels were temporary rather than a new long-term benchmark.
Today’s policy direction aims to restore migration to levels that better align with Australia’s infrastructure, housing capacity and long-term economic planning.
Declining Net Overseas Migration Does Not Mean Skilled Migration Is Ending
One of the most common misconceptions is that a reduction in Net Overseas Migration means Australia is reducing opportunities for skilled migrants.
That is not what the current reforms indicate.
Net Overseas Migration measures the overall increase in Australia’s population through migration. It includes international students, temporary workers, visitors who stay long enough to be counted, and permanent migrants entering Australia.
Australia’s employer-sponsored visa programs remain an essential component of the migration system because they directly address genuine skill shortages that cannot be met through the local labour market.
In fact, employer-sponsored migration continues to be viewed as one of the most productive migration pathways because it supports businesses, fills critical occupations and contributes to economic growth.
The key difference is that employers may have access to a smaller pool of temporary migrants already living in Australia.
Why Is Australia Reducing Net Overseas Migration?
Several long-term policy considerations are influencing the Government’s migration settings.
Housing Pressures
Australia continues to experience one of its most challenging housing markets in decades.
Rental vacancies remain exceptionally low across many metropolitan and regional areas, while demand for housing continues to outpace supply.
Population growth naturally increases demand for housing, making migration policy closely connected to housing affordability.
By gradually reducing temporary migration, the Government hopes to ease pressure while additional housing projects are delivered.
Infrastructure Capacity
Migration supports economic growth, but population growth also increases demand for public infrastructure.
Hospitals, schools, childcare services, roads, public transport and community facilities all require significant investment to accommodate growing populations.
The Government’s migration strategy increasingly reflects the need to balance economic growth with Australia’s ability to provide adequate public services.
Long-Term Population Planning
Australia remains committed to migration as an important economic driver.
However, policymakers are shifting away from rapid population growth towards a more sustainable migration model that balances workforce requirements with national planning priorities.
Rather than reducing migration indiscriminately, the Government is seeking better alignment between migration levels and Australia’s capacity to support new arrivals.
Which Industries Will Feel the Greatest Impact?
Although every employer should understand these changes, several industries are expected to experience greater workforce pressure than others.
Hospitality
Restaurants, hotels, cafés and tourism operators have traditionally relied heavily on temporary migrants and international students.
As fewer temporary entrants become available, employers may experience:
- Increased competition for experienced staff
- Longer recruitment periods
- Higher wage expectations
- Greater employee turnover
Many hospitality businesses may increasingly consider employer sponsorship as part of their long-term recruitment strategy rather than relying solely on local recruitment.
Construction
Australia faces an unusual challenge.
At the same time the country is attempting to increase housing supply, the available workforce remains under pressure.
Construction businesses continue to report shortages across skilled trades including carpenters, electricians, plumbers, painters, bricklayers and civil construction workers.
A tighter migration environment may increase recruitment challenges unless employers begin workforce planning well in advance.
Agriculture
Regional Australia has historically relied on overseas workers to support seasonal demand.
Whether managing harvests, food production or regional processing facilities, many employers continue to experience difficulties attracting sufficient local workers.
As Net Overseas Migration declines, workforce shortages may become more pronounced during peak production periods.
Healthcare and Aged Care
Healthcare remains one of Australia’s fastest-growing industries.
Demand continues to rise for:
- Registered Nurses
- General Practitioners
- Aged Care Workers
- Disability Support Workers
- Allied Health Professionals
Australia’s ageing population means these workforce shortages are expected to continue regardless of broader migration trends.
Employer-sponsored migration will remain a critical solution for healthcare providers across metropolitan and regional Australia.
Why Employer Sponsorship Will Become Even More Important
As the pool of temporary migrants within Australia gradually reduces, businesses will increasingly compete for the same skilled workers.
This makes employer sponsorship a valuable strategic advantage rather than simply an immigration process.
Businesses that already hold Standard Business Sponsorship approval can respond much faster when recruitment opportunities arise.
Instead of beginning the sponsorship process after identifying a suitable candidate, prepared employers can move directly to nomination and visa stages, reducing delays and improving recruitment outcomes.
For employers that are not yet approved sponsors, now may be the right time to consider obtaining sponsorship approval before workforce shortages become more acute.
Workforce Planning Should Replace Reactive Recruitment
One of the biggest lessons employers have learned over the past several years is that workforce shortages cannot always be solved quickly.
Recruiting skilled overseas workers requires planning, compliance and realistic timelines.
Businesses should begin asking themselves important strategic questions:
- Which positions have become consistently difficult to recruit?
- Which occupations are eligible for employer sponsorship?
- Are existing sponsored employees approaching permanent residency eligibility?
- Which critical staff members should be retained through employer-sponsored pathways?
- How will future migration changes affect our recruitment strategy?
Businesses that answer these questions early place themselves in a far stronger position than employers who only begin exploring sponsorship after vacancies arise.
Retaining Skilled Employees Is Just as Important as Recruiting Them
Finding skilled workers is only part of the solution.
Retaining experienced employees has become equally important in today’s labour market.
Many sponsored workers seek employers who offer long-term career opportunities, professional development and pathways to permanent residency.
Employers that invest in employee retention often benefit from lower recruitment costs, stronger workplace stability and improved productivity.
Practical retention strategies include:
- Offering clear permanent residency pathways where appropriate
- Providing competitive salaries and benefits
- Supporting career progression
- Maintaining compliant sponsorship obligations
- Creating positive workplace cultures that encourage long-term commitment
Businesses that prioritise retention are more likely to maintain workforce continuity while reducing future recruitment pressures.
A Strategic Approach Will Deliver Better Outcomes
Migration policy continues to evolve alongside Australia’s economic priorities.
Rather than viewing migration reforms as restrictions, employers should view them as an opportunity to strengthen workforce planning.
The decline in Net Overseas Migration does not eliminate access to skilled overseas workers. Instead, it reinforces the importance of acting early, understanding sponsorship options and developing recruitment strategies that extend beyond immediate vacancies.
Businesses that continue relying solely on last-minute recruitment may find themselves competing in an increasingly constrained labour market.
Those that build sponsorship into their long-term workforce strategy will be better equipped to attract and retain skilled employees.
Final Thoughts
Australia is entering a new chapter in its migration program. While Net Overseas Migration is forecast to decline through 2028, employer-sponsored migration remains a cornerstone of Australia’s skilled workforce strategy.
For employers, the message is straightforward: the competition for skilled workers is likely to intensify, not disappear.
Forward-thinking businesses should use this period to review their workforce needs, assess sponsorship opportunities and strengthen employee retention strategies before labour shortages become even more challenging.
At Rehman Sheriff Group, we work closely with Australian employers to develop practical, compliant migration solutions tailored to their workforce requirements. Whether your business is considering becoming an approved sponsor, sponsoring skilled overseas workers or transitioning existing employees to permanent residency, obtaining advice early can make all the difference.
As Australia’s migration settings continue to evolve, proactive planning not reactive recruitment will be the key to maintaining a resilient and competitive workforce through 2028.
Disclaimer: This publication contains general information only and is not legal advice. Immigration law and workplace law obligations may change, and outcomes vary depending on individual circumstances. Readers should obtain independent legal advice tailored to their specific situation before acting on any information contained in this article.
