In 2025, New Zealand’s employment market is balancing on a fine edge—caught between economic caution, persistent skills shortages, and the acceleration of technology. Employers are making more selective hiring decisions, favouring flexibility and efficiency over sheer headcount growth. Job volumes remain steady, but fixed-term, temporary, and fractional roles dominate as organisations seek to remain agile in uncertain times.

On a recent New Zealand market update, Frog Recruitment Managing Director Shannon Barlow spoke with Rebecca Clarke from the RCSA and Tim Stark from Trade Me Jobs about how the job market is evolving under both pressure and opportunity.

“Businesses hired up too quickly when things bounced back. Now they are making sure they don’t go too fast again, and that they’re hiring the right people.”

The post-pandemic boom has left its mark. As Tim Stark from Trade Me Jobs reflected, “We hired up too quickly when things bounced back. Now businesses are making sure they don’t go too fast again—and that they’re hiring the right people.” Recruitment processes are now longer and more deliberate, focused less on filling seats and more on ensuring every hire adds measurable value. This shift is reinforced by Rebecca Clarke from the RCSA, who noted, “We’ve seen more need for flexible options… fixed-term roles, temporary, and fractional workers.” The emphasis is firmly on adaptability, with employers choosing cautious progress over risky expansion.

Productivity is also under sharper scrutiny. “You don’t have room to have coasters,” Stark said. Clarke added that soft skills are becoming decisive, with problem-solving, communication, and self-driven development now considered just as critical as technical expertise. Employers want people who can adapt, contribute, and grow, with the focus shifting from simply filling gaps to hiring talent that can lift overall workforce performance.

Skills shortages remain one of the market’s biggest challenges—especially in trades and technical areas.

“Electricians, plumbers, drivers, mechanics—we need them now, and we’ll need more later,” Stark warned. With Australia continuing to draw talent across the Tasman, New Zealand faces ongoing pressure to retain and attract skilled workers. Clarke emphasised the importance of clarity in job design and employer branding: “Be really clear about what the job is—and what it isn’t. That helps people opt out if it’s not the right fit.” At the same time, she encouraged leaders to look inward: “Ask your best staff why they stay. You might be surprised—and you can use that to attract people like them.”

Broadening the talent pipeline is critical. Clarke highlighted New Zealand’s progress in tapping into overlooked communities, particularly in sectors like construction. “We’ve got an edge over Australia in inclusion,” she said, pointing to diversity, equity, and inclusion (DEI) initiatives as a long-term advantage. Immigration policy also remains a key lever. As Stark put it: “We’re going back to a skills-short environment—and probably staying there. We need good-quality immigration and better tech uptake to stay competitive.”

Technology is also reshaping how companies attract, manage, and retain staff. Stark noted, “AI is improving personalisation. You can’t do that at scale without it.” Clarke agreed but cautioned against over-automation: “Just because something can be automated doesn’t mean it should be. AI should free up time so people can do what they do best.” From recruitment marketing to onboarding, performance management, and even exit processes, digital tools are enabling smarter, more personalised decisions—though human oversight remains vital to ensure fairness and mitigate bias.

Looking ahead, both Clarke and Stark emphasised the need for deliberate action. Gen Z is entering the workforce with clear expectations for authenticity, corporate responsibility, and alignment with values. As Clarke summed up: “People expect businesses to be good corporate citizens. Even if candidates don’t raise it at the interview, it still matters.” For New Zealand employers, success in 2025 and beyond will depend on striking the right balance between digital agility and human values, immediate needs and long-term planning.

Practical takeaways for employers in 2025:

• Adopt flexible hiring models—temporary, fixed-term, and fractional roles keep organisations agile in times of uncertainty.
  
• Hire for adaptability—prioritise soft skills like problem-solving, communication, and self-management.
• Shape your EVP with employee feedback—ask staff why they stay and use those insights to attract like-minded talent.
• Use AI wisely—automate where it improves experience, but ensure human oversight remains central.
• Expand your talent pipelines—leverage inclusion, immigration, and cross-skilling to address persistent shortages.