2025 Skills in Demand Report: What does it tell employers about Australia’s new temporary skilled visa system?
The release of the 2025 Skills in Demand (SID) Report by Jobs and Skills Australia provides the first detailed assessment of Australia’s new employer-sponsored temporary skilled migration framework since the introduction of the Skills in Demand (subclass 482) visa in December 2024.
While the report concludes that the new framework is operating broadly as intended, it also highlights several important trends that employers should consider when planning workforce strategies and managing sponsored migration programs.
Our experience working with employers across sectors reflects a clear shift in how skilled migration is being used in practice. Rising salary thresholds, evolving policy settings, and increased scrutiny of labour market outcomes are driving a more targeted, and often higher-cost, approach to sponsored migration. As a result, employers are increasingly assessing migration as one component of a broader workforce strategy that also considers domestic recruitment, workforce development, and long-term talent planning.
Salary thresholds are changing employer behaviour
One of the clearest findings from the report is the impact of increased and indexed salary thresholds on employer-sponsored migration.
For many years, the Temporary Skilled Migration Income Threshold (TSMIT) remained unchanged at $53,900. Following increases in 2023 and the introduction of the Core Skills Income Threshold (CSIT), Jobs and Skills Australia found a significant shift in nominated salaries, with salary distributions moving towards the higher thresholds.
Annual indexation appears to be directly affecting remuneration outcomes, reinforcing what we’re seeing in practice. Accessing skilled migration increasingly requires employers to offer salaries that are both competitive in the labour market and sufficient to satisfy rising migration thresholds.
For employers, the question is no longer simply whether a role is eligible for sponsorship. It is increasingly unclear whether sponsorship remains commercially viable at the required salary level. We are seeing organisations reassess recruitment strategies, workforce planning and talent pipelines as migration costs continue to rise and salary thresholds become a more significant factor in hiring decisions.
The occupation list may matter less than many employers think
The introduction of the Core Skills Occupation List (CSOL) represented one of the most significant reforms to employer-sponsored migration in recent years.
However, the report indicates that the practical impact of the transition from the previous occupation lists has, to date, been relatively modest. More than 90 per cent of SID visas granted were for occupations that were already available under the previous Temporary Skill Shortage (TSS) visa program.
This suggests that while the new framework has expanded access to some occupations, employers have largely continued sponsoring workers in occupations that have historically relied on skilled migration.
The report also notes that the CSOL includes significantly more occupations than are currently assessed as being in national shortage, reflecting a policy objective of preventing future shortages rather than simply responding to existing ones.
Demand remains concentrated in a relatively small number of occupations
The report highlights continued strong demand across several familiar occupations.
Chef became the most commonly sponsored occupation in 2024-25, with visa grants increasing from 2,279 to 6,361. Other highly sponsored occupations included Resident Medical Officer, Motor Mechanic, Software Engineer, ICT Business Analyst, Registered Nurse (Aged Care), Mechanical Engineering Technician and Accountant.
The growth in hospitality-related occupations is particularly notable. Visa grants for Chefs increased by almost 180 per cent, while Café or Restaurant Manager and Cook also recorded substantial increases.
Interestingly, Jobs and Skills Australia observe that for some hospitality occupations, there appears to be a weaker relationship between visa grants and current vacancy levels, raising questions about whether some sectors may be developing an ongoing reliance on skilled migration rather than investing in domestic workforce development.
The Specialist Skills Stream is attracting highly paid professionals
The report provides the first meaningful insight into the operation of the Specialist Skills Stream.
As intended, the stream is heavily concentrated in management and professional occupations, with 98 per cent of visas granted to applicants in Major Groups 1 (Managers) and 2 (Professionals).
Top occupations include General Practitioners, Corporate General Managers, Management Consultants, Software Engineers, ICT Business Analysts, Finance Managers and Engineering Managers.
The findings suggest employers are using the Specialist Skills Stream when salaries comfortably exceed the relevant threshold and where the faster processing times provide a commercial advantage. The report also notes that only a small proportion of Specialist Skills visas are granted for occupations outside the Core Skills Occupation List.
This suggests that, in practice, the Specialist Skills Stream is operating less as an alternative occupation pathway and more as a premium processing pathway for highly paid professionals.
Labour Agreements continue to grow in importance
The report identifies significant growth in the use of Labour Agreements.
The number of Labour Agreements in effect increased from 3,093 in September 2024 to 4,751 by September 2025. Visa grants under Labour Agreements also continued to rise, reflecting their growing importance as a workforce solution for sectors facing ongoing labour shortages.
This trend is unsurprising given that Labour Agreements remain one of the few mechanisms available for occupations not on the CSOL, for occupations excluded from the Specialist Skills Stream, or for occupations where concessions to standard migration requirements may be available.
For employers operating in sectors such as aged care, meat processing, hospitality and regional industries, Labour Agreements are likely to remain an increasingly important component of workforce planning.
In our experience, employers are increasingly considering Labour Agreements earlier in their workforce planning, rather than as a last-resort option, particularly in sectors facing persistent or structural labour shortages.
What should employers take from the report?
The first SID Report paints a largely positive picture of the new employer-sponsored migration framework.
The report suggests that the program is successfully directing migration towards higher-skilled, higher-paid occupations, while maintaining flexibility for employers through the Core Skills, Specialist Skills, and Labour Agreement streams.
However, the findings also reinforce several realities for employers:
- Salary thresholds are now a central policy lever and will continue to increase.
- The Core Skills Occupation List will require regular review as labour market conditions change.
- Labour Agreements remain an increasingly important workforce solution for many sectors.
- Access to skilled migration remains available, but the cost and complexity of participation continue to increase.
As the Government continues to focus on integrity, wage growth and labour market responsiveness, employers should ensure their workforce planning strategies consider not only current migration settings but also the likelihood of ongoing policy reform and threshold indexation in future years.
How BDO can help
BDO’s migration services team assists employers to develop workforce strategies, manage sponsorship obligations and navigate Australia’s evolving employer-sponsored migration framework. With salary thresholds rising and policy settings continuing to tighten, forward-looking workforce planning will be critical to maintaining access to skilled migration and avoiding disruption to business operations.
