Desperation hires and skills gaps: What HR needs to know

Australia is no longer facing a skills shortage; we are experiencing a skills crisis, and it’s how businesses adapt that will determine whether talent scarcity impacts their bottom line, writes Daniel Cornett.

Australian businesses are facing an unprecedented recruitment challenge in 2026, with skill shortages no longer a looming risk but an operational reality that threatens growth and productivity, especially in key sectors such as manufacturing and mining.

Our recent research findings underscore the scale and complexity of workforce challenges facing both employers and HR professionals across the country.

Key among them is the lack of suitable applicants, a challenge that is further magnified in regional and remote parts of the country.

The latest national Jobs and Skills Australia Recruitment Insights Report shows 65 per cent of employers in regional and remote areas experiencing recruitment difficulties, compared to 49 per cent of businesses in major cities.

In addition, one-third (32 per cent) of businesses in regional areas took three months or more to fill a position, compared with just 9 per cent of city-based employers. Meanwhile, 20 per cent of businesses in regional and remote parts of Australia still reported a vacancy after three months or more.

Industries critical to regional economies, such as resources, energy, healthcare, infrastructure, agribusiness, and manufacturing, are struggling with chronic shortages across technical, professional, and leadership roles. As talent pools shrink, businesses that do not rethink their talent acquisition models risk falling behind.

For HR professionals, the growing reliance on Recruitment Process Outsourcing (RPO) providers has become a rational response to a labour market that has fundamentally changed. Regional employers, at the frontline of Australia’s skills crisis, are also increasingly leading the RPO adoption curve as they look beyond traditional hiring methods.

Skills requirements are evolving faster than many internal teams can adapt, and talent pools in certain sectors are becoming increasingly constrained.

It is no longer the case for a business to have multiple applicants for a role and take time choosing whom they want. Now, there is often just one applicant, leading to an increase in “desperation hires,” which cost more in the long run.

More companies are embedding RPO partners into workforce planning conversations early on because a longer recruitment cycle can translate into real economic costs for a business, including lost productivity or slowed growth.

One of the biggest constraints for businesses moving forward won’t be headcount but workforce capability. As the use of technology such as AI accelerates, roles will demand hybrid skill sets that don’t neatly exist in the market today.

As a result, HR departments will need to redefine what “qualified” looks like.

Talent acquisition experts are helping companies identify adjacent industries with overlapping capabilities and reframe role requirements around more core competencies, such as sourcing logistics leaders from defence into mining, frontline managers from hospitality into healthcare, or technical supervisors from manufacturing into renewables.

While hiring for transferable skills isn’t new, executing it consistently at scale and across geographies is.

RPO brings dedicated market intelligence, proactive sourcing capability, and the ability to build long-term talent pipelines, including transferable skills from one industry to the next.

In regions where “advertise and wait” no longer works, RPO offers a distinctive operating model with the power to scale by leveraging national and even global sourcing networks. This approach ensures a high-quality recruitment experience, even in geographically dispersed operations.

Australia is no longer facing a skills shortage; we are experiencing a skills crisis, and it’s how businesses adapt that will determine whether talent scarcity impacts their bottom line.

Daniel Cornett is a senior director at KellyOCG overseeing recruitment process outsourcing across Australia and the Pacific.