Navigating New Zealand’s Shifting Labour Market

The New Zealand job market in 2025 is marked by a unique contradiction: rising unemployment paired with continued skill shortages. While the national unemployment rate has reached 5.1%, employers still report difficulty finding suitably skilled candidates for critical roles. Sectors like healthcare, construction, education, and technology remain under strain, as the labour mismatch persists.

Job ad volumes fell by 10% in 2024, while applications surged by 18%, signalling an oversupply of candidates. Yet this has not made hiring easier. Employers are experiencing increased volumes of irrelevant applications, driven in part by candidate desperation and in part by tighter definitions of “relevance” in a more cautious labour market. As businesses prioritise productivity and restructuring, fewer roles are being filled through traditional recruitment, and internal mobility is taking on new importance.

Flexibility remains a top priority for job seekers, with remote and hybrid models firmly entrenched in knowledge-based sectors. However, rising living costs and regional disparities are prompting employers to reevaluate pay structures, retention strategies, and total reward offerings. Amidst ongoing economic pressures and lingering recessionary effects, a more intentional and strategic approach to hiring has taken hold.

“Resilience and anti-fragility… are sort of the themes of 2025.”

In a discussion hosted by Frog Recruitment Managing Director Shannon Barlow, NZ & Digital Community Manager at RCSA Rebecca Clarke and Trade Me Jobs Sales Manager Tim Stark offered a detailed view of New Zealand’s employment landscape.

Clarke described the market’s current state as a paradox: “More people available in the market doesn’t mean it’s easier to find jobs.” The issue, she explained, is a persistent mismatch between available talent and the skillsets required for growth. “Skill shortages continue to persist,” particularly in key industries listed on New Zealand’s Immigration Green List.

Employers, she noted, are responding to these pressures by becoming more deliberate. “They’re looking at high-impact roles… and also what they can offer in return,” she said. This includes prioritising internal mobility, rethinking total reward strategies, and speeding up hiring processes to avoid losing top talent in a competitive market.

Stark echoed this, describing the current environment as a “more employed recession.” Despite the technical downturn, employers are holding onto talent longer, recalling how difficult hiring became post-COVID. “We have seen businesses hold on to staff members longer than they would have traditionally,” he said, creating a temporary oversupply of labour. However, as workloads grow, this excess capacity will diminish, and hiring is expected to ramp up in the second half of the year.

He also addressed the surge in irrelevant applications. “Desperation in candidates is causing this,” Stark said, with many job seekers applying broadly in hopes of securing anything. At the same time, employer definitions of suitability have narrowed. “When people were really desperate for staff, a relevant application had a broader definition than it does now.”

On pay, Stark highlighted a renewed focus on salary expectations. “Cost of living has made pay become slightly more relevant than other aspects,” he said. Yet, flexibility and growth remain top considerations for candidates. “There’s a mismatch between what employers think candidates want and what they actually want,” he added. Career progression, learning and development, and meaningful benefits are central to retention strategies in 2025.

Clarke emphasised that employers must also consider regional cost differences, housing pressures, and geo-specific strategies in their workforce planning. “Remuneration strategies are recalibrating,” she said, with national pay structures giving way to more customised approaches.

Importantly, both guests pointed to an evolving workforce mindset. “There’s learning on the job… and a lot of change and transformation,” Clarke noted. Businesses must invest in staff development not only to fill gaps but also to futureproof their workforce.

Practical Takeaways for New Zealand Employers in 2025

• Balance an oversupplied candidate market with strategic speed to secure top talent before competitors.

• Recalibrate what “relevance” means in applications and improve clarity in job ad messaging.

• Invest in internal mobility and professional development to address persistent skills shortages.

• Customise pay and benefits strategies based on regional and industry-specific cost pressures.



• Align hiring and retention strategies with what candidates actually value—career growth, flexibility, and purpose.