The 2026 Hiring Market: What We Learned in 2025 & What’s Next
Posted December 16, 2025

Nathan Coller
Senior Account Director | Paxus
Each year, there is demand for tech talent, but 2026 may be one for the record books as companies bid from a shrinking talent pool.
At Paxus, we have witnessed firsthand how rapidly the demand for digital talent is evolving, particularly around AI and Cyber Security. Understanding what drives salary expectations and contractor rates is critical for both organisations and professionals navigating 2026’s competitive market.
There is no better example of this than the Federal Government’s recent announcement that the public service is facing a potential digital talent shortfall of more than 8,000 over the next five years.
The forecast is contained in the Commonwealth’s Digital Transformation Agency 2025 Digital Workforce Insights Report. It found that the workforce shortfall is due to a combination of new technologies, and that approximately 20% of the tech workforce will retire in the coming years.
The Australian Public Service has a digital workforce of about 8,000, this means one new digital worker must be added for every worker currently employed.
Compounding the problem, the Future Skills Organisation, an Australian government-funded Jobs and Skills Council, predicts a shortfall of more than 61,000 digital roles nationally by 2030. As the report points out, the APS will not be able to rely on the market to secure its digital workforce requirements for its future.
PwC's Global AI Jobs Barometer found that AI is making workers more valuable. The report found that industries most able to use AI have seen productivity grow by nearly four times since 2022 and are seeing three times higher growth in revenue generated per employee. Jobs numbers and wages are also growing in virtually every AI-exposed occupation, with AI-skilled workers commanding a 56% wage premium, on average.
Investment bank UBS estimates that companies will spend $US375 billion globally this year on AI. They project that figure to rise to $US500 billion in 2026. These are significant numbers for an industry in its infancy. While we expect candidate shortages in AI and Cyber Security, shortages are also likely in Cloud, Data, and among organisations undergoing transformation.
Which specialisations will be the most in demand?
As outlined earlier, there is demand in all areas of tech, although we believe Cyber Security is going to become an even more prominent part of the ICT landscape.
In 2024-25, the Government’s Australian Signals Directorate received 84,700 cybercrime reports, that’s roughly one every six minutes.
The Australian Computer Society says Australia has an estimated 137,000 cyber security professionals, but they project we will need an additional 54,000 specialists by 2030 to mitigate cyber threats effectively.
Cloud and AI demand will remain high. AI roles are growing, but in practical delivery roles rather than big standalone AI teams. Data will keep growing as digital programs ramp back up.
Cloud demand will come from many companies rushing adoption, and their requirements to optimise or re-platform their systems.
Transformations are also a constant driver of demand – and that takes expertise. Look at SAP’s bid to move clients from ECC6 to S/4 HANA. That was slow this year, but we believe it will be restarting at full strength in 2026.
There is strong demand for functional consultants, testers, integration people, data migration specialists and change managers. Basically, anyone with S/4 experience will be busy. That will especially be the case in Brisbane with the likes of the Brisbane City Council, the Department of Transport and Main Roads, and the Department of Justice, among others undergoing transformations.
Which cities will see the strongest demand?
Brisbane will see demand for the SAP migration, while Sydney continues to lead, especially across financial services, consulting and cyber.
Canberra remains the most stable market, with constant demand for Cyber, Cloud and Data due to security clearance requirements.
Melbourne has been steady but is expected to lift in 2026 as government projects resume, including digital upgrades, cloud initiatives, transport technology, and ERP.
While Brisbane softened this year overall, it will bounce back in 2026 with more activity in energy, utilities and finance, plus strong interstate migration. We don’t expect the Olympic “halo effect” to begin until 2027, when digital and infrastructure programs ramp up.
Perth will remain solid, driven by mining, resources, automation and OT-focused talent needs.
Adelaide continues to grow, particularly in defence, cyber and engineering-aligned ICT roles, with steady and consistent demand.
Different industries drive demand in each city:
· Sydney is powered by banks and large consulting firms.
· Melbourne follows state government funding cycles.
· Canberra is steady because of federal projects and clearance requirements.
· Brisbane is driven by major transformation programs in utilities, energy and infrastructure.
· Perth’s demand is tied to mining and heavy industry tech uplift.
· Adelaide is influenced by defence, cyber and long-term engineering programs.
Flexibility is just as important as salary
We are finding negotiations are more balanced between clients and candidates. While clients hold more influence in markets with larger talent pools, strong candidates continue to steer the conversation.
Hybrid work remains a non-negotiable for most professionals. Candidates now weigh stability and company culture as heavily as salary, prompting clients to strengthen their employer value proposition (EVP) to remain competitive.
2026 contractor rate trends
Contractor rates should remain steady with small increases in Cyber, Cloud and specialist Software Engineering. We are unlikely to see the big spikes of previous years, but strong contractors with the right skills will still get strong rates.
Contracting is still sitting at around 31% of ICT hiring nationally. While contracting continues to give companies flexibility, that that trend will continue. They can scale up and down based on projects, budgets and priorities.
What did we learn in 2025 that we can take into next year?
The market in 2025 didn’t slow, it just became more selective. Companies focused on maximising value from existing resources and made more deliberate hiring choices. This meant clients were looking for talent who could solve problems, not just fill a seat. For example, instead of hiring big project teams, our clients preferred to hire one or two strong specialists who could unblock delivery or steady a project.
The big takeaway for 2026 is that demand shifts, it doesn’t disappear. People who can adapt and deliver outcomes will always be in demand.
Plan Your 2026 Workforce with Confidence
As 2026 approaches, understanding where demand is highest, which skills are scarce, and what rates and salaries are realistic will give you a competitive edge.
Our 2026 Salary Guide & Market Insights provides:
- Contractor rate benchmarks and permanent salary trends across tech, digital, finance, and project delivery roles
- Sector-specific insights to guide strategic workforce planning
- Exclusive intelligence from thousands of placements and candidate engagements
This data can help you make informed hiring decisions, attract the right talent, and optimise your workforce strategy for the year ahead.
For a personalised discussion about your 2026 hiring plans or to understand how the trends apply specifically to your organisation, contact Nathan Coller, Senior Account Director at Paxus.










