In 2025, the New Zealand employment market is navigating a complex mix of economic caution, skills shortages, and rapid technological advancement. Against the backdrop of a cost-of-living crisis, employers are making highly selective hiring decisions, with a strong preference for flexibility and strategic efficiency over headcount growth. While job volumes remain steady, roles are more likely to be fixed-term, temporary, or fractional—allowing businesses to stay nimble amid uncertainty.



A clear shift is underway from reactive recruitment to long-term workforce planning. Companies are increasingly focused on retaining top performers, investing in their development, and exploring how automation and AI can extend internal capability without increasing staffing costs. Job seekers, in turn, are prioritising culture, values alignment, and long-term stability—often placing greater importance on an employer's authenticity and flexibility than on salary alone.

At the same time, AI is reshaping how companies manage the employee lifecycle. From attraction and onboarding to performance management and exit processes, digital tools are enhancing personalisation, improving efficiency, and driving better decision-making—while still requiring human oversight to avoid bias and ensure fair outcomes.

With a shrinking labour pool, ageing population, and competition from overseas markets, especially Australia, organisations in New Zealand must act deliberately to retain talent, address gaps through immigration and inclusive hiring, and prepare for a future where values-based leadership and digital agility are key to resilience.

“You don’t have room to have coasters.”

In discussion with Frog Recruitment Managing Director Shannon Barlow, Rebecca Clarke from RCSA, and Tim Stark from Trade Me Jobs highlighted how the New Zealand job market is evolving under pressure—and opportunity.

Rebecca Clarke explained the impact of economic strain on recruitment decisions: “We’ve seen more need for flexible options… fixed-term roles, temporary, and fractional workers.” Stark echoed this: “Employers are a lot more conservative. There’s a lot more thought and deliberation around headcount. They’re cautious but still want to move forward.”

The pandemic’s legacy also looms large. “We hired up too quickly when things bounced back,” Stark said. “Now businesses are making sure they don’t go too fast again—and that they’re hiring the right people.” He described a rise in longer, more deliberate recruitment processes. “It’s not just, do we need someone—it’s who exactly are we saying yes to?”

Both experts noted a renewed focus on workforce productivity. “You don’t have room to have coasters,” Stark said bluntly. Employers want staff who can actively contribute to growth and adapt to a dynamic landscape. This is where soft skills are becoming decisive. “Problem-solving, communication, and self-driven development are key,” said Clarke.

Skills shortages remain acute, especially in trades and technical roles lost to the Australian market. Stark pointed out: “Electricians, plumbers, drivers, mechanics—we need them now, and we’ll need more later.”

To compete for talent, Clarke urged employers to clarify job expectations and EVP. “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,” she said. Stark added: “Ask your best staff why they stay. You might be surprised—and you can use that to attract people like them.”

Diversity, equity, and inclusion are also shaping future workforce strategies. “In construction, we’ve got an edge over Australia in inclusion,” Clarke said. “We’re tapping into overlooked communities—and that widens the skills pipeline.”

Technology is driving change across the employee lifecycle. “AI is improving personalisation,” said Stark. “You can’t do that at scale without it.” Clarke noted that while automation has value, human oversight is critical. “Just because something can be automated doesn’t mean it should be,” she cautioned. “AI should free up time so people can do what they do best.”

Looking ahead, immigration and tech adoption are priorities. “We’re going back to a skills-short environment—and probably staying there,” Stark warned. “We need good-quality immigration and better tech uptake to stay competitive.” Clarke added that ESG leadership and workplace values will grow in importance as Gen Z enters the workforce. “People expect businesses to be good corporate citizens,” she said. “Even if candidates don’t raise it at interview—it still matters.”

Practical Takeaways for New Zealand Employers in 2025

• Use flexible hiring models—like temporary and fractional roles—to stay responsive during economic uncertainty.

• Prioritise soft skills such as adaptability, communication, and self-management in recruitment.

• Leverage employee feedback to shape your EVP and attract culturally aligned candidates.

• Invest in AI carefully: automate where it improves experience, but retain human oversight for judgment calls.

• Expand talent pipelines by focusing on inclusion, immigration, and cross-skilling existing staff.