As we progress through 2025, the HR recruitment landscape in New Zealand continues to evolve under the influence of shifting workforce expectations and strategic business priorities. Recent insights show that 73% of HR leaders across the region are focusing on improving the employee experience. This includes enhancing leadership development and expanding learning opportunities. Flexibility, effective leadership styles, and a focus on work-life balance remain critical in attracting and retaining talent.

Artificial Intelligence is gradually entering HR operations, particularly in recruitment and training. However, its real impact is still emerging, with nearly half of HR teams reporting minimal current effects despite many already investing in AI solutions.

Recruitment remains a major pressure point. The top challenge is replacing departing staff, followed by the demands of business growth. In response, 63% of organisations are increasing salaries to attract candidates, although the practice of offering counteroffers appears to be on the decline.

The turnover rate presents a more optimistic picture, with 49% of HR professionals indicating that retention has improved compared to the previous year. Moreover, well-being initiatives and flexible work arrangements have gained momentum. A significant 81% of businesses offer employee assistance programmes, and nearly half support healthcare costs. Flexibility is no longer optional, with most employers now providing flexible hours and remote work.

"The big focus is improving the employee experience."

According to Leanne Lazarus, Specialist Recruitment Manager at people2people, the 2025 HR priorities strongly centre on enhancing the employee experience. "About seventy-three percent of HR leaders are prioritizing this," she explained, highlighting the sector-wide commitment to boosting workplace engagement and satisfaction.

Leadership development and learning continue to be core areas of investment. "Developing leadership and supporting learning and development" are now seen as pillars of long-term organisational success, reflecting a shift toward sustainable talent strategies rather than reactive hiring.

Despite the growing presence of AI, its current effect is moderate. "Nearly half of HR teams say it hasn't been an impact just yet, even though half of them are already investing in it." This underscores a transitional phase where technology adoption is progressing faster than its measurable impact.

Recruitment efforts are increasingly about filling vacated roles rather than expanding new ones. "The main challenge is replacing outgoing staff," Lazarus stated. This suggests a reactive hiring environment where maintaining headcount is a more immediate concern than scaling up teams. Salary adjustments have become a key tactic to remain competitive. "Sixty-three percent of organizations are raising salaries to fill roles," she noted, though most are stepping back from making counteroffers, potentially shifting the dynamic of negotiation.

Retention trends, on the other hand, offer some relief. "Around forty-nine percent of HR teams say turnover is either better or significantly better compared to last year," Lazarus shared, indicating positive results from renewed focus on well-being and flexible arrangements. Efforts to support employee well-being have expanded. "Eighty-one percent in fact, are offering employee assistance programs and almost half are helping their employees with health care costs," she said. These measures, coupled with widespread flexible work options, are becoming standard rather than exceptional.

Nonetheless, HR departments are feeling the strain. "Half of HR professionals say they are under-resourced," Lazarus revealed. This gap between expectations and capacity points to the need for continued investment in HR infrastructure.

Tips for Navigating 2025 HR Challenges

• Embrace flexibility by embedding remote work and non-linear work hours into standard policy.

• Prioritise upskilling and reskilling programmes to develop internal leadership pipelines.

• Invest in AI cautiously, ensuring clear ROI and integration with existing HR systems.

• Strengthen support for employee well-being, including mental health and healthcare subsidies.

• Review HR resource allocation to ensure teams are equipped to meet strategic goals.