Positive signs from a recruitment perspective despite rising unemployment

Rising unemployment figures often dominate headlines, shaping perceptions of a labour market under strain. When joblessness reaches decade highs, confidence can falter quickly, particularly among businesses weighing up whether now is the right time to invest, hire or expand. Yet labour markets rarely move in straight lines, and headline numbers alone rarely tell the full story.

Periods of economic pressure tend to expose a gap between sentiment and reality. While uncertainty can slow decision-making, it can also create opportunities for organisations willing to act early. Subtle indicators such as hiring intent, job flow and changes in role mix often shift before broader recovery becomes visible in official data.

Understanding these early signals is critical. Employers, job seekers and policymakers alike benefit from recognising when caution is warranted and when momentum may be quietly rebuilding beneath the surface. In the current environment, the challenge is balancing realism about rising unemployment with attention to the positive movements beginning to emerge across parts of the market.

“There are some really positive signs starting to come through, even though it’s still early to get a clean read on the market.”

On the Newstalk ZB Kerre Woodham Morning Show, host Kerre Woodham was joined by Frog Recruitment Managing Director Shannon Barlow to unpack the latest unemployment data and what it really means for employers and job seekers. With unemployment reaching a ten-year high of 5.4 percent, the conversation focused on whether the market is beginning to turn despite the challenging numbers.

Barlow described the data as “a pretty unpleasant surprise”, particularly given the level of business confidence heading into the end of last year. However, she remained optimistic, noting that sentiment itself plays a powerful role in shaping outcomes. “If we can talk ourselves into a recession, surely we can talk ourselves into a more buoyant economy and labour market,” she said, pointing out that some of the underlying data supports a more positive outlook.

From a recruitment perspective, Barlow emphasised timing. She explained that it is “a little bit early to get a clean read on the market”, as hiring activity often doesn’t properly resume until after Waitangi Day, once decision-makers are fully back at work. Despite this, December delivered encouraging signs, with “a lift in permanent roles and businesses keen to hire before the new year”. She added that January had also been “solid”, which was notable given it is “usually a really dead month”.

This early activity matters. According to Barlow, it suggests that business confidence is beginning to translate into “real hiring and growth decisions”, rather than remaining theoretical. She explained that when markets start to shift, sales roles are often the first to move, as organisations focus on driving growth. “Businesses are looking at, right, we’re going to really target growth, but to do that we need to go out into the market and go after new business,” she said.

Beyond sales, Barlow highlighted increased movement in HR-related roles, particularly in change management. She attributed this to organisations adapting to new legislation and reassessing how they operate. These signals point to businesses repositioning themselves for the future, rather than simply standing still.

Youth unemployment was another key theme. Barlow noted that younger workers are typically hit hardest during tougher periods, which has contributed to a decline in participation rates. Many have chosen to remain in or return to education instead. “Rather than sit around, they’ve gone back to bring some new skills on board,” she said, expressing hope that this would “better their chances” as the market improves.

Regional differences also featured strongly. Barlow observed that recovery has begun earlier in some parts of the country, such as Canterbury and further south, while Auckland continues to face greater pressure. While relocating is not an option for everyone, she suggested that those with flexibility may benefit from keeping an open mind. “If you have that flexibility, it’s not a bad idea to think about a sea change or tree change,” she said, noting it can offer both career opportunities and lifestyle benefits.

Throughout the discussion, Barlow returned to the importance of momentum. She warned that excessive caution can quickly become self-fulfilling, slowing recovery further. If too many businesses “sit on the fence and wait and see”, she said, it risks stalling progress altogether. Her message was clear: talking positively, making informed decisions and acting with intent all play a role in shaping what comes next.