No - the data does not show AI replacing offshore teams. It shows something more useful to know: AI adoption inside Australian businesses is still low, the local skills shortage has not eased, and offshore professionals themselves are adopting AI tools as fast as anyone. What is changing is which offshoring model holds up - and Australian business owners weighing up a Malaysian hire in 2026 need to understand that distinction before they decide anything else.
If you are asking this question because a supplier, a LinkedIn post, or a competitor's blog has suggested your offshore hire is about to become redundant, this article works through the actual 2026 figures, explains why the "AI versus offshore" framing is the wrong one, and sets out what to look for in a role - and a provider - so your team stays useful regardless of how fast the tools move.
What the 2026 Data Actually Shows
Three separate data sets, from three very different sources, tell a consistent story: AI capability is accelerating quickly, but Australian businesses are adopting it slowly, and the underlying people shortage that drives offshore hiring has not gone anywhere.
AI capability is genuinely moving fast
Gartner forecasts that 40% of enterprise applications will feature task-specific AI agents by the end of 2026, up from less than 5% in 2025 - an eightfold jump in a single year. That is a real and rapid shift in what software can do on its own.
But most Australian businesses have not caught up yet
The Australian Bureau of Statistics' 2024-25 Business Characteristics Survey found that only around 12% of Australian businesses reported using AI in the workplace, up from just 1% in 2022-23. Adoption is heavily skewed by size: about 35% of large businesses use AI, versus 22% of medium businesses and roughly 11% of small and micro businesses - the segment that makes up most of CMX Co's client base.
In other words, the businesses most likely to be asking "should I offshore or just use AI instead?" are, on average, the least likely to have actually deployed AI in any meaningful way yet. The fear is running ahead of the practice.
The local skills shortage has not eased
Jobs and Skills Australia's Occupation Shortage Report for the March 2026 quarter put the national vacancy fill rate at 68.2%, down from 69.1% in the December 2025 quarter and 3.3 percentage points lower than a year earlier. Skill Level 3 occupations - the technical and para-professional roles many businesses try to offshore first - were the hardest to fill of any group, at just 55.5%. AI has not made local recruitment easier; if anything, the gap between the roles businesses need filled and the candidates available to fill them locally has widened.
Offshore professionals are using AI more than most people assume
A 2026 survey of nearly 2,000 offshore professionals by workforce provider Sourcefit (covering the Philippines, South Africa, the Dominican Republic and Madagascar - not Malaysia specifically, but indicative of the wider industry) found that 74% use AI tools at least occasionally and 52% use them daily or several times a week. Fewer than 7% were concerned AI would harm their role, and 68% reported it had made them more productive. The most common uses were writing and documentation (36%), research and analysis (30%) and customer support (14%).
The picture that emerges is not "AI versus offshore staff." It is offshore staff, using AI, doing more - while most Australian businesses are still working out how to use it themselves.
The Question Itself Is the Wrong One
"Will AI replace offshore staff?" assumes offshore staffing is one thing. It is not. There are two very different models sitting under that label, and they respond to AI very differently.
Transactional, task-based outsourcing
This is the shared-pool BPO model: a queue of tickets or calls routed to whichever agent is available, work measured in transactions, and staff often rotating between multiple client accounts. This model is genuinely exposed to AI, because it is built on the routine, high-volume, scripted work that generative AI and automation now do faster and more consistently than a person reading from a script.
A dedicated team member
This is a named person who works inside your systems, reports to your managers, knows your customers, and stays with your business for years rather than rotating between accounts. AI does not replace this person - it becomes one more tool they use, in the same way it becomes a tool for your Australian staff. A dedicated bookkeeper who now drafts reconciliation notes with AI assistance is still the person who understands your chart of accounts, spots the transaction that does not look right, and knows to flag it to you before it becomes a problem. The judgement, context and accountability do not come from the software.
This distinction also explains why global outsourcing spend keeps growing rather than shrinking as AI improves. Grand View Research puts the global business process outsourcing market at USD 302.62 billion in 2024, projected to reach USD 525.23 billion by 2030 - a compound annual growth rate of roughly 9.8%. Businesses are not pulling back on people; they are shifting what they ask people to do.
| Offshore role | What AI is taking over | What still needs a person |
|---|---|---|
| Bookkeeping & accounts | Data capture, bank feed matching, first-pass categorisation | Reconciliation judgement, BAS-ready accuracy, flagging anomalies, client communication |
| Customer support | First-response drafting, FAQ handling, ticket triage | Escalations, complaints, retention conversations, reading tone and context |
| Executive assistance | Meeting notes, inbox summarising, scheduling suggestions | Prioritising a principal's time, managing competing stakeholders, discretion |
| IT / helpdesk support | Level 1 password resets, known-issue troubleshooting via chatbots | Diagnosing new issues, client relationship, judgement calls on escalation |
| Marketing support | First drafts of copy, content research, basic image generation | Brand judgement, campaign strategy, knowing what will land with your market |
What This Means for Your Hiring Decision
Use these four questions to work out whether a role you are considering offshoring is AI-resistant, AI-enhanced, or genuinely at risk:
- Is the work mostly transactional, or does it involve judgement? Pure data entry and templated responses are the most exposed. Anything requiring a decision - what to flag, what to prioritise, what to say - is not going away.
- Does the role need context about your business specifically? AI has no memory of your last client complaint, your supplier's quirks, or why a particular account needs careful handling. A dedicated team member does.
- Is the person accountable, or interchangeable? In a shared BPO pool, one agent is much like another and AI competes directly. A named employee who owns outcomes is not competing with a chatbot - they are using one.
- Will this role still exist in three years, just changed? Most roles Australian businesses offshore - bookkeeping, EA work, IT support, marketing coordination - are shifting in content, not disappearing. Hire for the shifted version of the role, not the 2020 version of it.
How CMX Co Approaches This
We build dedicated teams, not shared task queues - your Malaysian hire works inside your own systems, tools and communication channels from day one, which means they use whatever AI tools your business already relies on rather than sitting behind a separate BPO platform. That is also why our pricing is transparent: you are paying for a specific person's time and capability, not a per-ticket rate that a script could eventually undercut. When a role is genuinely better suited to automation than to a person, we would rather tell you that during the scoping conversation than place someone into a job that will not exist in two years.
Practical Takeaway
Before offshoring - or automating - a role, run it through this checklist:
- List the tasks in the role and mark each one as routine/scripted or judgement-based.
- If more than half is routine, consider automating that portion first and hiring for what is left over.
- Check whether the role needs ongoing context about your business, customers or systems - if so, prioritise continuity of the person over cost per transaction.
- Ask any provider directly how AI fits into the role, and whether the person is dedicated to your business or shared across accounts.
- Revisit the role description every 12 months rather than assuming it is fixed - the content of most support and admin roles is shifting faster than the job titles are.
AI is not going to make the decision to build an offshore team in Malaysia less relevant in 2026. It is going to make the decision of who you hire, and how they work more important than it has been in years. Businesses that offshore a dedicated person who is equipped to use AI well will keep getting more capacity for their money. Businesses that were buying cheap, transactional task processing were always the most exposed - with or without AI.
Thinking about whether a role should be offshored, automated, or both?
Talk to CMX Co before you decide. We will help you work out what a dedicated Malaysian team member for that role would actually look like - including where AI fits - before you commit to anything.
Sources: Gartner, AI agents in enterprise applications (Aug 2025) · Australian Bureau of Statistics, Business adoption of AI 2024-25 · Jobs and Skills Australia, Occupation Shortage Report, March 2026 · Sourcefit, 2026 offshore workforce AI survey · Grand View Research, Outsourcing Services Market Report