In a world where artificial intelligence is reshaping industries by the day, how ready are we really?

To find out, we surveyed 864 professionals across Australia and New Zealand, including Chief Execs, HR leaders, and tech specialists, about their experiences, expectations, and concerns around AI. The results reveal a mix of excitement and uncertainty, optimism and hesitation. In short: the AI shift is here, but many are still finding their footing.

Confidence is low but belief is high

Over 90% of business leaders believe AI will positively impact their teams within the next two years. But when asked how well their organisation is responding to this change, just 5% said “extremely well.” That’s a gap worth paying attention to.

“We’re seeing two extremes,” says JP Browne, Practice Manager from our office in Auckland. “In some companies, AI tools are already being used on the ground, but leadership is scrambling to put the right controls in place. In others, execs are racing ahead out of FOMO, and tech teams are having to slow them down to make sure it’s the right solution.”

In both cases, the need for clarity, structure and strategy is clear. This isn’t just about embracing new tools, it’s about aligning people, processes, and platforms around a shared vision for the future.

More defence than offence

One in three organisations in our survey have already implemented policies restricting external AI tools, a sign that risk awareness is high. But in many boardrooms, fear is still outweighing forward thinking.

Rather than asking “How can we lead with AI?”, the question for many remains “How do we contain it?”

This caution is especially apparent in highly regulated sectors. As JP explains:

“Insurance, for example, is cautiously optimistic. They’re exploring AI but always keeping a human in the loop. Nobody wants to be the company on the front page because a bot denied a claim.”

Strategy, skills and leadership: the missing pieces

So, what’s holding organisations back? According to our data, the top three blockers are:

• No clear strategy – 41% of respondents say their organisation hasn’t defined a direction for AI.
• Skills gaps – while 52% of organisations are offering training, many teams are still catching up.
• Unclear ownership and goals – 34% say there’s no clear owner for AI, and 41% report unclear goals.

“The biggest shift we’re seeing in hiring isn’t just for AI Engineers,” says JP. “It’s for the roles that support AI behind the scenes. Data Engineers, Infrastructure Engineers, platform specialists who can enable the functionality in AWS, Microsoft, Salesforce and so on. That foundation is everything.”

Interestingly, only 12% of organisations are planning to hire an AI leader in the next 12-18 months, which suggests many are still unsure of how to structure their approach.

Agentic AI is coming and workers are wary

As AI tools become more autonomous, the implications for the workforce are getting real. One in four workers in our survey said they’re concerned about job displacement due to agentic AI systems, a tension that may slow down adoption if not addressed head-on.

“This isn’t a tech challenge, it’s a leadership challenge,” says Jack Jorgensen, Data, AI & Innovation Practice Lead from our consultancy arm, Avec. “Organisations need to move beyond fear-based narratives. That means involving their people, investing in relevant training, and being transparent about the intent behind every AI initiative.”

Where to from here?

If there’s one takeaway from this research, it’s that no one has it all figured out, and that’s okay. AI transformation doesn’t have to be perfect to begin. But it does need to begin with purpose.

That means building AI into your strategy, not just your tech stack. It means empowering teams to experiment, not just comply. And it means treating people, their concerns, their skills, and their potential, as central to the journey, not a barrier to it.

If you’re curious to explore more of what we learned from 864 professionals across Australia and New Zealand, you can access the full findings in our free report here.

“AI is a tool and only brings what has been inputted into it,  humans bring creativity and discretion.”

The message from workers is clear: AI won’t replace people, but people who understand how to use AI will be better positioned to thrive.

And right now, most teams are still early in that journey.

Our latest survey of 864 business leaders and tech professionals across Australia and New Zealand shows that while AI is gaining traction in the workplace, the skills needed to use it confidently and responsibly are still catching up.

Training is happening but, for most, it’s basic at best. The result? A lot of curiosity, and a whole lot of untapped potential.

Skill levels are rising… slowly

When we asked participants to rate their current skill level using AI tools:

• Just 2.3% identified as “experts”
• 11.3% said “advanced”
• The majority sat at “intermediate” (36.5%) or “beginner” (43.7%)

This isn’t surprising in such a fast-moving field but it does highlight the need for structured support, especially with AI tools evolving week to week.

“I firmly believe that it’s through knowledge, research, and learning that people are able to develop their AI readiness skills.”

Training is happening, but most of it isn’t sticking

The good news? Most organisations are starting to take action:

• 52.4% of organisations said they’re offering some form of AI training (44.5% limited, 7.9% comprehensive)

But when we asked individuals if they had completed any training:

• 68.2% said “no”
• And just 4.4% had completed “comprehensive” training

Even among those who had received training, only 7.7% found it “extremely relevant” to their work. The disconnect suggests many training efforts are still too broad, too theoretical, or poorly timed.

It’s one thing to roll out training and it’s another to make it useful. Teams need learning that is contextual, practical, and directly tied to how they work.

Confidence gaps are slowing progress

What we’re seeing is a classic enablement gap.

The tools exist. The appetite is there. But without real capability building, usage stays shallow.

And when people aren’t confident, they hesitate or, worse, they misuse the tools. That holds back experimentation and fuels the kind of fear that makes governance trickier than it needs to be.

As one participant put it:

“It will be hard to know whether people have capability and can think strategically when everything is done for them.”

The goal isn’t to create AI experts in every role. It’s to build a workforce that’s comfortable, capable, and ready to use AI with discretion and clarity in ways that support their goals, not distract from them.

So, what should leaders do now?

If you’re serious about using AI to gain a competitive edge, upskilling can’t be an afterthought. It has to be part of your core strategy.

This means:

• Offering hands-on, role-specific learning – not just AI awareness
• Creating space for safe experimentation
• Recognising that enablement is a journey and not a one-off webinar

Because when people feel empowered, not overwhelmed, the quality of AI use goes up and so does trust in your broader business strategies.

Want to find out how your organisation compares? Download the full survey findings here to explore how others are approaching AI adoption, skills, and strategy.

Before planning ahead, it’s important to understand what’s already happening on the ground. AI is no longer just a future trend, it’s part of the everyday reality for many professionals. But how it’s being used (and how it’s being managed) varies widely.

Our latest survey of 864 business leaders and tech professionals across Australia and New Zealand revealed both momentum and misalignment, with many teams using AI regularly, even in the absence of formal strategy or support.

Note: This survey closed on 16 June 2025 and reflects a moment in time in a rapidly evolving space.

AI is already in play and it’s changing how people work

AI is firmly embedded in daily workflows for many. Over two-thirds of respondents are using it for search and research (67.7%), 65.4% for summarising content, and more than half for drafting emails and documents. One in three are even using it for data analysis, with more advanced tasks like coding assistance and multi-step workflows also starting to gain traction.

And when asked whether AI use has led to greater efficiency or productivity, nearly two-thirds (64.7%) said yes, with 15.1% reporting significant improvements.

Cameron Robinson, Head of Enterprise Solutions at Solve by Talent, put it simply:

“The research shows that the vast majority of people are using AI already. We haven’t got an adoption problem. Businesses won’t succeed trying to suppress AI usage. If leaders treat AI for what it is – technology – then many of the tried-and-tested principles for change and risk management will still apply.”

In short: your teams are already moving. The question is whether your strategy and support systems are keeping up.

Control and caution are creeping in

Despite widespread adoption, 38.3% of organisations now have policies in place restricting the use of external AI tools. Another 28.9% say they use tools like ChatGPT and Gemini with minimal governance. It’s clear many organisations are still figuring out how to balance innovation with risk.

Some workplaces are stepping up:

• 12.9% are currently exploring secure, fit-for-purpose AI solutions
• 11% have already developed in-house AI capabilities

But many others are stuck in a grey area, trying to contain AI use without clear plans for enablement.

AI adoption is still in the early stages

While usage is high, formal adoption lags behind. When asked how they’d describe their organisation’s current stage of AI integration:

• Just 4% say AI is fully embedded in their business strategy
• Nearly half (47.6%) say they’re still in the experimental or pilot stage
• 13.5% say they haven’t started at all

And when it comes to frequency:

• 33.7% use AI tools daily
• Another 26.3% use them a few times a week

But only 19.7% report AI being implemented in a few departments, and just 8.7% say it’s widely adopted. There’s a clear disconnect between individual uptake and organisational planning.

Excitement meets uncertainty

Some teams are leaning into AI’s potential, using it for content creation, document management, knowledge sharing, and even code generation or customer support. But there’s still uncertainty around how to scale these use cases effectively.

As one participant put it:

“We’re seeing some exciting use cases, but also a lot of uncertainty around skills, change management, and long-term planning.”

Another flagged resourcing concerns:

“We are using AI and love it, but we are limited in our usage due to budget limitations and lack of experience.”

And then there’s the ongoing question of safety and ethics:

“Although amazing things can be done using AI, the lack of governance and data privacy is deeply concerning.”

AI is already here even if strategy isn’t

The data tells a clear story: adoption is happening from the ground up. It might not be part of your long-term roadmap yet, but your people are using it. They’re testing it. They’re learning. Sometimes with support and often without.

What’s missing is clarity, consistency, and leadership.

Now is the time to catch up. Where to start?

• Establishing a governance framework that enables safe, confident AI use
• Understanding the tools their teams are already using
• Scaling the use cases that work, and ditching the ones that don’t
• Treating AI like any other strategic investment: purposeful, aligned, and people-focused

Curious how your organisation compares? Download our full report here to see the complete findings and discover how teams across Australia and New Zealand are navigating the AI shift.

With AI dominating headlines and boardroom agendas alike, it’s easy to get swept up in grand predictions. But behind the hype, what’s really happening in Australian and New Zealand workplaces?

To cut through the noise, we surveyed 864 business leaders and tech professionals across ANZ to find out how AI is being adopted, what’s holding it back, and where it’s headed next. While the excitement is palpable, Jack Jorgensen, Data, AI & Innovation Practice Lead from our consultancy arm Avec, says what’s really unfolding is more complex and more revealing than the headlines suggest.

“A lot of organisations are still stuck in the Proof of Concept stage,” says Jack. “That’s not surprising – AI isn’t a magic wand. It’s a tool. Like any tool, it has to be embedded within real processes to have an impact. Right now, many businesses are still reconciling the hype with the reality of what AI can actually do.”

From urgency to uncertainty: Why strategy is still missing

Despite executive-level urgency to “do something” with AI, many organisations are struggling to translate that into tangible strategy. Our survey found:

• 41% of respondents cited “no strategy” as a major AI adoption barrier
• 41% said their organisation had “unclear goals”
• 34.4% pointed to a “lack of clear ownership”

“We saw this with Automation too,” says Jack. “Executives want momentum, but the problem is that every department has its own unique processes and that nuance often isn’t visible from the top. Without input from people actually doing the work, AI initiatives stall. The better approach? Let teams experiment, find real use cases, and celebrate the wins. That kind of bottom-up traction creates momentum that sticks.”

Fear of AI is real, but is it justified?

One in four survey respondents (24.9%) listed “job displacement or change” as their top concern when it comes to agentic AI systems. But Jack warns against jumping to conclusions.

“We’ve seen this fear before. The same anxiety was there when Automation started gaining traction. The reality is, many of the job cuts we’re seeing today aren’t because of AI, they’re because of economic pressure and over-hiring corrections. AI is being used as a scapegoat because it makes layoffs look like a forward-thinking decision, when really it’s about cost. If we focus too much on AI as a threat, we risk missing its actual value.”

Instead of seeing AI as a way to cut headcount, Jack says organisations should utilise it as a tool to enhance quality, speed, and productivity.

“If you reward people for improving their workflows with AI – instead of fearing they’ll work themselves out of a job – you’ll get two things: better, more reliable use cases, and more engaged teams actively looking for new opportunities. That’s what drives real business growth.”

Data use is up, but so are the risks

Our survey found that 33.9% of professionals are already using AI for data analysis; a promising sign of adoption in everyday workflows. But Jack adds a note of caution.

“It’s great to see adoption in areas like analytics, but we have to be careful. Large language models don’t understand truth, they generate probability. AI can support analysis, but it shouldn’t replace rigorous, traditional verification. We still need humans to make sense of what’s surfaced.”

Security is another concern that’s keeping some businesses from going further. 46.2% of respondents said “security or compliance” was the biggest barrier preventing more regular AI use.

“It’s encouraging that people are thinking seriously about security,” says Jack. “We need to treat AI systems and the data behind them with the same level of scrutiny we give to any other sensitive tool.”

So, where are we in the AI journey?

Jack believes we’re in an AI bubble, similar to the dot-com boom – full of excitement, investment, and a fair amount of overreach.

“The tech is real. The opportunity is real. But it’s early. We’re seeing fear, confusion and fast moves, often without strategy. If organisations can stop chasing the hype and start embedding AI into processes with care, they’ll not only unlock value but avoid repeating the mistakes of past tech cycles.”

Want to find out more?

Access the full findings from 864 professionals across Australia and New Zealand here. Discover how teams are really using AI, and what the data tells us about the future of work.

Sick of AI events telling you stuff you already know?

We’re cutting through the hype with a real-world look at what’s actually going on.

Join Jack Jorgensen, our in-house AI expert from Talent’s project delivery arm, Avec, and JP Browne, Practice Manager at Talent Auckland as they unpack:

• Where organisations are really at
• What’s holding teams back
• Concern and resistance on the ground
• Why security and trust matter now more than ever
• Early signs of change in workforce planning as a result of AI
• AI readiness: Sector comparison

Register today

AI is changing the way individuals and businesses are approaching work as revealed in Talent’s latest survey report which was released today. The report features insights from over 850 business leaders and technology professionals across diverse industries in Australia and New Zealand. Access the findings HERE.

The survey, focused on six key themes, Perception, Current Use & Adoption, Strategy & Leadership, Skills & Enablement, Barriers & Challenges, and Agentic AI, offer an in-depth understanding of how AI is being implemented today and its implications for the future of work.

Key findings include:

• Only 12% of organisations are planning to hire an AI specialist or leader over the next 12-18 months.
• AI has not impacted workforce planning for 55% of organisations.
• Only 5% of survey participants feel their organisation is responding to the changing AI landscape ‘Extremely well’.
• 90% of business leaders believe AI will positively impact their team’s work in the next 2 years. Whereas only 63% of workers believe AI will positively impact their role in the next 2 years.
• 25% of workers are concerned about job displacement due to agentic AI systems.
• Security or compliance concerns remains to be the biggest barrier preventing teams from using AI more regularly for 46% of respondents.
• 52% of organisations are offering training or upskilling opportunities related to AI.

Matthew Munson, Talent Managing Director NSW, weighed in on what he is seeing in the recruitment market, “AI is reshaping how businesses and individuals approach work, but our latest survey shows there’s still a cautious optimism in the market. While 90% of leaders see AI’s positive impact on their teams, only a small number are actively hiring AI specialists. This gap highlights the opportunity, and urgency, for organisations to build stronger AI capabilities otherwise risk being left behind.”

Jack Jorgensen, Practice Lead – AI, Data & Innovation at project delivery company Avec, said, “AI is fundamentally transforming the workplace. However, there are many unseen challenges. The implementation of large-scale AI projects can necessitate the storage of enormous volumes of data, which in turn requires fast and reliable access. Cloud storage, while convenient, comes with substantial costs which may not be considered in this regard. There are also security considerations evolving at an accelerated pace. There needs to be a greater focus on developing effective solutions and having the right AI leaders in the business to ensure the success.”

Auckland market overview

Economic sentiment across New Zealand

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.

The Technology & IT market in Auckland

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 in Auckland

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 in Auckland

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 for Auckland and New Zealand

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.

Talent RISE has been recognized on the national stage, taking home the Best Contribution to the NZ Tech Sector at the prestigious 2025 NZ Hi-Tech Awards.

The award highlights Talent RISE’s outstanding work in empowering young people, particularly those from underrepresented backgrounds by opening pathways into meaningful employment in the tech and innovation sector.

Held in front of a sold-out crowd of over 1,300 at the TSB arena in Te Whanganui-a-Tara, Wellington, the 2025 NZ Hi-Tech Awards showcased Aotearoa’s most innovative and impactful tech companies. The judges praised Talent RISE for its “genuine commitment to social impact through, talent development” and called out its ability to “turn real-world barriers into real-world opportunities.”

Shanelle Patridge, Kaiārahi, Talent RISE Youth Program Manager for New Zealand, said:
“This award is a huge honour and a testament to the incredible young people we work with every day. At RISE, we believe talent is everywhere, but opportunity is not and we’re here to change that. Being recognized alongside so many incredible innovators across the tech ecosystem reminds us that inclusion and innovation must go hand in hand.”

‘The ROI of AI in procurement isn’t always about speed or savings. It’s also about better decision-making, supplier transparency, and creating space for value-led work.’

The buzz around AI isn’t slowing down, and in the procurement space? It’s ramping up.

Last week, at Talent’s Future Trends for AI and technology event in our office in Melbourne, the room was full of procurement and professionals asking the same question: Where is AI taking our industry and how do we keep up?

With the expertise of APA Group’s Head of Procurement Excellence, Lexia Laracy, and Leader of Technology & Corporate Category Management, James Sharman, the session unpacked what’s happening on the ground right now, what’s failing, and where the biggest opportunities are.

1. AI is here but most are struggling to use it well

From forecasting and spend analytics to supplier risk and contract automation, AI is already weaving its way into procurement teams. But there’s a gap between what’s possible and what’s actually working.

“85% of AI projects in procurement fail.”

The reason? Not the tech but everything around it: unclear strategy, messy data, lack of governance, and resistance to change.

Executives are excited but often frustrated. They want transformation at speed, but pilots don’t scale, outcomes aren’t clear, and the data foundations just aren’t there.

APA’s take? The tools are only as good as the ecosystem they’re plugged into.

2. A human-centric, data led shift

Throughout the session, one key idea kept surfacing: AI is not replacing people, it’s reshaping roles.

With automation taking over admin-heavy tasks like invoicing or basic sourcing, procurement teams are shifting from “process runners” to strategic advisors, ESG partners, and relationship builders.

But that shift isn’t automatic. It demands new capability frameworks, role redesign, and a serious focus on bringing multi-generational teams along for the ride. Some procurement veterans fear being replaced. Digital natives are frustrated by the pace of change. Lexia and James stressed the importance of clear communication, active change management, and recognising the value all generations bring to AI adoption. Lexia and James stressed the importance of clear communication, active change management, and recognising the value all generations bring to AI adoption.

3. Procurement is uniquely positioned to lead AI adoption

One of the standout moments was when Lexia described procurement professionals as the connectors of the business.

Unlike siloed functions, procurement touches almost every corner; finance, legal, risk, sustainability, tech. This makes them a natural fit to lead AI adoption. But it also means the stakes are higher if things go wrong.

To avoid the common traps, APA and other leading teams are focusing on a few core areas:

• Governance first: Align AI with ethics, values and strategic risk tolerances.
• Data integrity: Poor data in = poor outcomes out. Procurement must own its data foundations.
• Process documentation: AI can’t optimise what it doesn’t understand. Every manual workaround is a future barrier.
• Use case prioritisation: Start with what matters, risk, cost, ESG, efficiency and build from there.

4. Rethinking ROI: It’s not just about speed

The ROI of AI in procurement isn’t always about speed or savings. It’s also about better decision-making, supplier transparency, and creating space for value-led work.

Tools like predictive supply chains, generative tender creation, and supplier risk scoring are just the beginning. APA highlighted the value of focusing not only on technology ROI, but also on people ROI, freeing up skilled procurement talent to do the high-impact work they were hired for.

And while off-the-shelf solutions can look shiny, the panel reminded us that customisation isn’t always the goal. Standardisation and usability are what drive adoption at scale.

Key takeaways

1. Don’t get distracted by the hype. Focus on data, governance, and change management before chasing shiny tools.
2. AI is a capability amplifier, not a magic fix. It works best when it complements human expertise.
3. Procurement has a chance to lead. With their cross-functional influence, procurement professionals are well-placed to drive meaningful AI adoption.
4. Every organisation is on a different journey. Whether you’re in firefighting mode or thinking digital twins, the key is progress over perfection.

“We don’t want to be the 85% that fail. Let’s build systems and teams that give AI something meaningful to work with.”

Looking to implement AI into your business strategy?
Learn more here or get in contact with us if you’d like to discuss any of this further here.

Auckland Market Overview

Survive to 2025 was last year’s motto.

Leaders went away for the Christmas holidays hoping the beginning of 2025 would start with more optimism. However, January and February statistics from sources we follow tell us that if there was optimism, it didn’t yet translate into the employment market.

In February 2025, job advertisements on SEEK New Zealand decreased by 17% compared to February 2024. On a month-to-month basis, there was a 2% decline from January to February 2025.

Seek NZ Country Manager Rob Clark tells us, “After two years of steady and significant decline in job ad volumes, the past eight months have been broadly flat. While we may not be out of the woods yet, the days of significant, broad-based drops in worker demand should be behind us.”

It was confirmed that NZ eased out of technical recession last quarter, with 0.7% growth in the GDP.

As we end the fiscal year for a lot of New Zealand organisations, one must be wondering if we’re going to see renewed budget and investment released soon. Organisation’s will also be closely watching the Government budget announcements in May; who and what will receive investment and what is the latest plan to “get New Zealand back on track”.

From 1 April, there are a number of new initiatives being rolled out by the government.

An interesting one is an additional 1% interest added to student loan interest rates for overseas borrowers, on top of the yearly re-calculation in rates that occurs.

Given student loans don’t bear interest if you’re living and working in NZ, will this help to halt what has seemingly felt like an exodus of our young, bright talent?

Should we interpret this combined information to mean that we are at or past the trough in our market now?

The year ahead

Considering I’ve now committed to updating this market update monthly is an indicator of just how inconsistent the market has been.

For some positivity, from an anecdotal perspective over the last couple of weeks, the employment market seems to be slowly picking up. It will be interesting to see if this is reflected in key indicators and reports that we follow and if there is genuinely a market change.

Talent NZ contractor extensions are being confirmed at a much higher percentage than in the past 12 months – we take this as a sign of increased confidence too.

We believe we are likely at a tipping point. From our experience of riding several market downturns, our market has shallow highly skilled talent pools so when the market turns it will turn fast.

We recommend:

• Organisations strategically invest in their engagement and retention of high potential and high performing team members. Engagement survey data & exit survey data is key here.
• In parallel, leaders must identify key members in their teams and ensure you’re having open, transparent two-way communication.
• Even though job security has been a very high motivation, if an employee or contractor is not clear on what the future holds, then there is increased risk of them either actively considering opportunities or being responsive to approaches.
• With your contracting workforce, get proactive and lock and load the key talent you need in from an extension perspective. Ensure they know they are critical to the work or project.
• For your upcoming pieces of work, where are your skills gaps? Where you will require external talent, engage specialist recruitment organisations like Talent early and let’s work with you to create a plan.

To finish with something cheesy, because why not, if you’re still “surviving in 2025” now is the time to pause and ensure you have a plan to thrive in 2025.

Within the context of New Zealand’s turbulent economy, where cost-of-living continues to rise and employees are increasingly deciding to move to Australia or other places overseas, what’s something you can do internally to keep your employees engaged despite challenging conditions externally?

It’s time to home in your focus on company culture; the set of shared attitudes and behaviours that define the people in the business as outlined in the company’s mission and vision.

Why culture matters more than ever

While it seems like a nice-to-have, why should business leaders prioritise this into a must-have? Research shows that a focus on employee engagement during tough economic times can help companies withstand and even thrive.

• Employee engagement: Fostering a sense of belonging and purpose among your people leads to motivated and resilient teams and increased job satisfaction
• Talent attraction and retention: Attract top talent who align with the organisation’s values and help retain your top talent by creating a supportive work environment
• Performance and productivity: Promoting collaboration, innovation and a focus on achieving common goals leads to an increase in productivity
• Employer brand: Company culture influences the external perception of the business, shaping perceptions to clients and potential top talent you’re looking to hire
• Employee wellbeing: Prioritising mental health and work-life balance contributes to a healthier and more supportive workplace, and helps produce higher quality work

Practical tips for leaders

As the foundation of an organisation’s identity, how can leaders maintain or build this culture? Megan Woodbury, Global Chief Operating Officer at Talent, shares her insights.

“Resilience is an important trait to foster among your people. Building a work culture and trust in leadership through open communication will keep your teams engaged and help maintain morale,” Megan says.

Workplace culture is critical to maintain; assess what your people need to succeed, whether it’s flexible working arrangements, additional L&D opportunities, or mental health support. Position the wider company to succeed when the market recovers by keeping them engaged; keep open lines of communication, celebrate the small wins, and emphasise the business’ long-term vision by fostering resilience. “People want clarity and transparency, and CFOs must talk openly, and face-to-face to ease their worries,” says Megan.

Keeping the wider team engaged is key to retaining the staff who are instrumental in driving the organisation’s success. CFOs should identify critical roles and high performers and develop retention strategies that keep these vital team members engaged and motivated. Transparently sharing both good and bad news about the business’ financial health and the reasoning behind why decisions are made helps reduce uncertainty and fosters trust among the business. Focus in on the company’s employer brand, and ensure it remains attractive.

Wellbeing on a budget

We understand that resources can be limited when the market is uncertain, so for those who want to make strides in company culture, Oonagh Hall, General Manager of Human Resources at The Trusts, says to keep it simple: “Initiatives like shared lunches, social activities, and fostering a culture of openness can have a powerful impact.”

When it comes to your people’s wellbeing, you don’t need to reinvent the wheel. A Talent survey of over 2000 workers revealed that a significant 77% value remote work the most when it came to flexible work arrangements. From initiatives such as mental health days to allowing the flexibility to work remotely, there are a range of initiatives that have varied costs and investments involved. Allowing your people to take a break when they need it or being able to be online while at home or away, can foster a sense of trust and understanding, and overall happier employees.

Wellbeing and culture don’t always require large budgets; what matters is the authenticity in your approach and meeting your people where they’re at, even without a dedicated budget.

Maintaining culture and engagement within your teams is important no matter the department and continues to remain a key focus area for successful leaders. From Board and C-Suite to Heads and Managers, we’ve gathered insights from 26 business leaders across industries who’ve thrived in turbulent markets. Read our leadership guide here.

Looking to improve your people strategies? Whether it’s people, process, technology, or brand, our advisory service takes a modular approach to tackling specific gaps or dysfunctions. Learn more here.

Auckland Market Overview

It’s a new year and with that, brings a lot of opportunities.

2024 was an up and down market for us Kiwis. The economy was tough and that had a knock-on effect for the hiring market. There were some great wins though towards the back end of the year with the Reserve Bank lowering the Official Cash Rate. AI took centre stage, and cybersecurity was still a hot topic for businesses.  There’s no doubt, leaders will still be focusing in on these areas as we begin 2025. Let’s get into what we’re experiencing currently.

We are nearing the next Reserve Bank meeting (happening on the 19th of February) where they’ll discuss potentially lowering the Official Cash Rate (OCR) again. Rumours are swirling with the major banks’ economists picking 0.50%. With this in mind, many mortgage holders are hoping this will ease worries, however it has been reported much of the drop expected throughout the year has already been priced into rates. Time will tell though, as if one bank drops their rates further, we’d hope that others will follow suit to stay competitive. With the Trump administration in power, that could potentially influence the rest of the world’s economies and inflation rates. Time will tell.

According to Stats NZ, New Zealand’s annual net migration gain continues to fall but the number of departing Kiwis looks to have peaked. The net gain for the year to November 2024 was 30,600. That number was made up of a net gain of 78,500 non-New Zealand citizens and a net loss of 48,000 New Zealand citizens. Meanwhile, the 127,800 migrant departures in the November 2024 year were, provisionally, the highest on record for an annual period, Stats NZ said.

According to SEEK, job ads fell by 23% for December 2024. This is tough to hear as it was only a few months ago that we’d seen a lift. These results may be indicative of businesses slowing down given it is after all the December period and potentially were waiting for the new year to begin before making critical hires.

It’s not all industries that have seen a halt though. SEEK Country Manager, Rob Clark, said, “Some industries ended the year with more opportunities, including banking & financial services and insurance & superannuation, thanks to growth spurts at the end of the year.”

Now when you consider all of this and that markets move in cycles, one can’t help but think if spending / investment / project decisions are building up when they push go, will they all push go together?

Candidate needs

• Security; whether that’s for perm or continuity of their extension. Security is by far the highest priority.
• In line with that, increased, frequent and consistent communication from their workplace to assure them of the organisation’s plan.
• If they have flexibility in their role, for that to continue. This is a perk people really do not want to give up if they have it established. However, we are seeing candidates begrudging soften on this in line with job security.
• Making themselves “sticky” in a highly changeable employment market.
• Drive to increase their personal brands, networking given the changeable nature of workforces.
• Increased AI literacy – there is a growing sense that if you don’t increase your AI knowledge you’ll be outpaced by those who do.

Business needs

• Contractors who hit the ground running, add significant value and don’t take up a lot of management bandwidth. Highly likely in permanent candidates too.
• Increased physical visibility in the office across both contractors and permanent employees.
• Continued initiatives to reduce the cost of their workforce and driving efficiencies.
• Streamline processes and automate where possible. Drive increase in productivity.
• Leadership who can lead change and can do so in volatile times.
• AI and data governance strategies.

The year ahead

The year ahead will be an interesting one for us Kiwis. What some may feel as a tipping point, others may think that we’re still in the thick of it. Business leaders will be grappling with the confidence to invest, however without investment they may be losing out to their competition.

I was recently reading an article from Spark CEO, Jolie Hodson, who stated that she wants New Zealand to fully embrace advance digital technologies like AI, cloud computing, and the Internet of Things (IoT).  For the past 20 years, New Zealand has consistently spent less than the OECD average on research and development. The article also stated that by international standards, our businesses are particularly low investors in R&D which as a result we’re in a place where our ability to transform businesses with technology is underleveraged.

The question remains; when is the right time to push go on projects and invest? Pressure will remain for our leaders to do more with less from their team members. The advice I would give to them is ensure clear communication and speak with honesty – team members will see right through it if it’s not. Continue to showcase empathy and have support systems in place. Be ready to pivot and empower team members to be agile. Above all, keep learning. Stay up to date with industry trends and other relevant information that can then be fed back into teams. It’s going to be an interesting market and you’ll want to keep your top talent.

Candidates want stability, long contracts for those that are contractors and a feeling of safety within a business and on a project. Continuous learning and skill development will ensure you stand out in a crowd when applying for roles. Use your voice to showcase your knowledge on industry trends through platforms such as LinkedIn. Networking is another great way to increase your visibility and help you land that top gig.

Candidates are still seeking higher salaries in line with the increased cost of living however if they are actively looking for a new job are willing to negotiate.

No matter what, looking after your team members should be any business’s number one priority. With the global tech skills shortage sticking around, NZ losing Kiwis to other markets, demand for hard-to-find, highly skilled talent isn’t going anywhere. The biggest difference between NZ and Australia is the very drastic difference between the decreasing amount of job opportunities and the significantly increasing amount of job applicants.

In my last update, I shared the statement “survive till 2025” which had been said quite a lot. Well, we’re here now. It’s not going to be a quick fix. We must set our teams up for success so we can thrive. Where we can, invest in technology and don’t be afraid to embrace AI. For candidates, upskill and continue to tap into your network. Don’t give up hope. I’m always available to meet for a coffee and a chat, as is my team.

To finish with something cheesy, because why not, let’s all thrive in 2025.