Are Australian organisations adopting AI faster than they are building workforce capability?

ConnectOS report reveals AI adoption is accelerating across Australian organisations, but workforce capability, governance and skills development risk falling behind.

Australian organisations are rapidly embedding artificial intelligence into everyday operations, but new research suggests many are failing to invest at the same pace in the people, skills and governance needed to realise its full value.

The ConnectOS State of Offshoring Report found two-thirds of employers are already using AI tools, while 79% reported their offshore teams were adopting AI at the same pace as, or faster than, onshore employees.

Despite this, only 29% of organisations currently provide ongoing AI training to offshore teams. Thirty-two percent deliver training on an ad hoc basis, while 28% provide no AI training at all, highlighting a growing capability gap as AI adoption accelerates.

Steve Evans, Founder and CEO of ConnectOS, said many organisations have moved quickly to adopt AI technologies but have underestimated the importance of developing workforce capability alongside them. "Technology alone won't deliver better business outcomes. Organisations also need people who understand how to use AI effectively, apply sound judgement, interpret information and work alongside these technologies. The businesses seeing the greatest value from AI are investing in both technology and the capability of their workforce," he said.

The report found AI is reshaping the types of roles organisations expect to build over the coming years. Data Analyst was identified as the fastest-growing AI-related role by 47% of employers, followed by AI Engineer (35%) and Automation Specialist (32%), reflecting growing demand for employees who can interpret data, automate workflows and integrate AI into business operations.

At the same time, AI is changing the nature of offshore work rather than reducing its importance. Seventy-nine percent of employers reported offshore employees were adopting AI at the same pace as, or faster than, their Australian counterparts, challenging assumptions that technology maturity differs significantly across distributed workforces.

"The conversation has shifted beyond whether AI can automate routine work. The real opportunity now is building teams that can combine AI with human expertise, commercial judgement and customer understanding. That's where organisations will create long-term competitive advantage," he highlights.

The research also found offshore work is becoming increasingly specialised, with 34% of employers reporting offshore roles have become more specialised during the past three years and 21% saying work has become more strategic or knowledge-based.

While customer support remains the most commonly offshored function, organisations are increasingly building capability offshore across technology and engineering, data and analytics, cybersecurity, finance, marketing and HR, reflecting broader changes in how businesses structure technology-enabled workforces.

As organisations become more reliant on AI-enabled operations, governance is also emerging as a key priority. Seventy-nine percent of employers reported compliance expectations had increased during the past three years, yet only 25% described themselves as very confident in their organisation's current compliance position, while almost three in 10 remained unsure which standards applied to their offshore operations.

"AI is accelerating the need for stronger governance. As organisations automate more processes and distribute work across global teams, technology and cybersecurity teams need confidence that security, compliance and workforce practices are evolving safely alongside innovation," he stresses.

Looking ahead, employers identified AI enablement as the single most important characteristic of future offshore workforce partners, ranking ahead of talent development, cultural alignment and cost leadership.

The findings highlight Australian organisations are entering a new phase of digital transformation, where competitive advantage will depend less on access to AI tools and more on how effectively businesses develop the people, governance, cybersecurity and operating models needed to deploy them responsibly at scale.

For Australian technology leaders, the report reinforces that successful AI adoption is no longer solely a technology initiative. Realising long-term value will require close collaboration between technology, HR, risk and executive leadership to build workforce capability, strengthen cybersecurity and governance, and ensure AI is implemented securely and responsibly across increasingly integrated onshore and offshore teams. As AI becomes embedded in everyday business operations, the organisations that invest equally in people, security and technology will be best positioned to innovate with confidence.