Market Overview

Economic Sentiment:

Continued interest rate cuts and New Zealand officially exiting recession (modest 0.7% GDP growth in Q4 2024) created conservative optimism across the Auckland market.

However, the impact of US tariffs (10% on all NZ exports) has contributed to a drop in business confidence. For exporters and those with international exposure, the future may feel uncertain.

Also in parallel, as we head into the NZ Govt Budget, expect continued fiscal restraint in the public sector. The Government has cut discretionary spending by more than half, from $2.4B to $1.3B, a sign that austerity will continue into the foreseeable future.

Technology & IT Market:

According to SEEK’s March Employment Report, the ICT job market continues to cool, with job ads down 5% month-on-month and 18% year-on-year. The competition for roles also continues to increase, with applications per job rising by 4%.

In contrast to that data however, the Talent Auckland team’s role and placement volume is increasing month on month. The majority of new job requisitions in and job placements are in the areas of data analysis, engineering, and business analysis. There is noticeable increase in leadership changes and hiring of new leaders who can successfully initiate and lead change.

Offshoring continues to gain momentum as a cost-driven strategy with Spark’s recent announcement as an example signaling a growing reliance on global talent to build a more flexible, scalable workforce model.

AI as a disruptor and for the opportunities is a significant talking point. Some clients have made significant strides implementing AI taskforces, appointing AI leadership roles and have either had successful implementations or successful pilot programmes. Over in Australia, the hottest new role companies are hiring for quickly are Heads of AI or Chief Artificial Intelligence Officers. Candidates are commanding salaries in the range of $250,000 to $500,000 plus, before short- and long-term incentives. According to our teams over the ditch, boards are the ones who are pushing these roles.

On the other hand, we are also speaking with clients where AI is still very much a discussion, and they are business casing. Many organisations however agree that in the medium term, there will be a shift towards leaner and more AI enabled teams. What that means in the short term is likely an increase in contingent hiring whilst organisations form a view of their skills gaps and what their time horizons will be to realise these changes.

Candidate needs

The top concern for candidates in today’s market continues to be job security and transparent, clear communication from leaders is needed now more than ever. Flexibility, while still valued, is increasingly negotiable.

AI Upskilling: As AI reshapes the workforce, the demand for AI-skilled professionals is growing rapidly. Employees are prioritising learning opportunities in AI, data science, and automation to remain competitive. Companies that offer these upskilling opportunities will find it easier to attract and retain top talent.

Location Mobility: New Zealand is seeing an increasing number of candidates considering moves to Australia, lured by its more robust market.

Retention and Engagement: LinkedIn’s 2025 Workplace Learning Report highlights that organisations that promote career mobility see stronger engagement and higher retention rates. In the context of a leaner workforce, companies should provide clear career development pathways and transparent communication to keep their employees engaged.

Business needs

For employers, the “new normal” is operating with leaner teams, driven by both economic necessity and the strategic need to remain agile in the face of technological disruption.

Priorities for businesses now include:

Reducing onboarding time by prioritising candidates who need minimal investment.

Implementing AI and automation in data processes to streamline operations and improve efficiency.

Hiring leaders who are proven at initiating and executing change

Leaders or technical practitioners who can support the organisation on it’s AI journey

The year ahead

While job ad volumes are yet to fully rebound, contractor extension rates at Talent NZ are at their highest in 12 months, an encouraging sign of confidence among employers.

Given the high pace of technological change and the transformative impact of AI, we anticipate increased volatility in the short-term. However, this also presents an opportunity for those who can adapt quickly.

We recommend the following actions for businesses looking to thrive amidst change:

• Invest in AI education for your leadership team, ensuring they are equipped to manage change and drive growth in an AI-powered environment.
• Proactively engage with contractors and talent now to secure the essential skills you will need in the near future.
• Regularly check in with your key talent about their professional development and concerns for FY26.
• Consider your workforce data (from engagement surveys to exit feedback) to identify how to best retain and motivate your talent in a leaner environment.
• Create “show and tell” opportunities for employees to self report their AI use cases

Amid the uncertainty, opportunities abound for those prepared to reset, recalibrate, and thrive in a rapidly changing environment.