What’s Driving HR Stability Amid Economic Uncertainty

New Zealand’s HR sector has experienced relative stability in the past year, with many organisations reporting strong employee retention across people and culture teams. This trend has been driven by a mix of job market caution and proactive internal strategies, such as upskilling and structured mentorship programs. As the national employment landscape continues to adjust to economic pressures, employees are placing greater value on job security, career growth, and employer support.

The challenges for HR have been largely shaped by changing legislation, particularly pay equity requirements, and ongoing fluctuations in immigration law. These changes have had widespread implications for workforce planning, especially within sectors that rely heavily on community support workers or migrant talent.

Recruitment remains a pain point, with organisations frequently reporting a high volume of applicants but low suitability for specialised roles. In regional areas, the issue is compounded by geographic limitations, making talent attraction and retention especially difficult.

On the salary front, expectations have begun to rise after a period of relative stability. As businesses move into a new financial year, job seekers are becoming more vocal about pay, driven by cost-of-living increases and the need for long-term financial security. The continued rise of New Zealand’s living wage also factors heavily into both candidate expectations and employer planning.

“The biggest thing for candidates has been that job security… they’ve got families to support.”

In discussion with people2people Specialist Recruitment Manager Leanne Lazarus, Samantha McCall, Recruitment Consultant at New Zealand Health Group, shared practical insights into the current HR climate across the country.

“We’ve managed to retain our staff really well… across the wider business,” McCall said, noting that while this could reflect internal engagement efforts, it may also be a reaction to the state of the job market. “People are really wanting that job stability, security and holding on to their jobs,” she added.

To support retention, the organisation has increased its investment in employee development. “We have shifted our change into investing into our people… offering more of the in-house upskilling and mentorships,” McCall explained. This focus on long-term career growth has helped reduce turnover while encouraging internal mobility.

However, new challenges have emerged. A recent pay equity law has had a significant impact on HR and compliance workflows, especially for community support staff. “That’s kind of been one of the more biggest things that we have had to deal with,” McCall said.

From a recruitment perspective, the quality of applicants remains inconsistent. “There’s still definitely the quantity over quality in terms of candidates that are coming through,” she noted. Immigration law changes further complicate recruitment, as organisations work to retain employees on work visas amid evolving regulations.

These pressures are particularly acute in regional areas, where sourcing qualified and committed candidates remains difficult. “Finding good talent, attracting it and retaining it” continues to be a major priority.

As companies approach the new financial year, salary negotiations are beginning to shift. “It has been pretty stable… but the living wage in New Zealand is consistently going up,” McCall said. While job security has been the dominant concern over the past 12 months, employees are now re-evaluating pay in light of rising household costs and inflation.

The broader takeaway is that employees still crave certainty—but with expectations increasing, HR teams must balance financial planning with competitive compensation and internal growth opportunities.

Practical Takeaways for HR Leaders in New Zealand

• Boost retention with structured upskilling and mentorship initiatives that support long-term career growth.

• Stay ahead of legal and immigration changes that may affect workforce compliance and retention strategies.

• Focus on improving recruitment processes to better filter candidate quality, especially in regional markets.

• Prepare for a shift in salary expectations by benchmarking compensation against the rising living wage.



• Maintain open communication around job security, particularly for employees navigating a cautious job market.