New Zealand’s labour market is preparing for a challenging year ahead in 2025, with rising unemployment and an increase in migration to Australia expected to reshape the job landscape. Shay Peters, chief executive of Robert Walters Australia-New Zealand, labels the coming year as a “period of transformation” for all involved.
Talent Drain and the Impact on New Zealand’s Workforce
The talent drain to Australia continues, with over 30,100 New Zealanders leaving for Australia in the year ending March 2024, a trend expected to worsen in 2025.
New Zealand’s unemployment rate stood at 4.8% in the September 2024 quarter, and this migration pattern is further complicating the job market.
“The fact of the matter is, there just aren’t enough job prospects and opportunities to keep people here,” Peters said. Australian recruitment offices have already reported an influx of inquiries from New Zealand applicants, signalling a long-term challenge for New Zealand’s workforce.
This is a concerning trend which could impact the country for many years, as it stands to lose a substantial number of highly skilled individuals, potentially for the long term,” Peters warned. To mitigate this, Peters suggests businesses invest in upskilling and reskilling initiatives.
“Businesses will need to invest in upskilling and reskilling their existing workforce to stay competitive. This approach will help to address skill shortages while also fostering employee loyalty and growth,” he noted. Furthermore, expanding remote work opportunities may provide a solution to the ongoing talent shortages.
The Role of Artificial Intelligence in Shaping Job Markets
New Zealand’s job market is undergoing significant changes as artificial intelligence reshapes various industries, including IT, finance, and engineering, which are expected to see a rise in demand for skilled professionals. Peters noted, however, that while AI may replace some technical roles, human expertise will continue to be in high demand.
“AI may replace technical tasks, but roles requiring stakeholder management, communication, influence, and the ability to complement AI will remain in high demand,” he said.
A recent Robert Walters survey revealed that 96% of professionals believe soft skills are just as important, if not more, than technical know-how. Communication, emotional intelligence, and problem-solving are becoming essential for success in this new job market.
Employers are also noticing this shift, with 92% acknowledging they’ve turned down candidates who lacked these abilities. “
As the workplace becomes more automated and tech-driven, employers are placing a higher value on qualities like emotional intelligence and collaboration,” Peters said.
The Changing Expectations of Future Leaders
Shifting generational views on leadership are becoming a hurdle for businesses looking to develop the next generation of managers. A recent survey revealed that just 11% of professionals prioritise career progression, reflecting Gen Z’s diminishing interest in management roles.
“The increasing complexity of management roles, especially in hybrid and remote environments, as well as inter-generational differences is making it more difficult to find people wanting to be managers,” Peters explained.
Businesses will need to invest in internal development programmes to address the leadership gap. Peters emphasised that fostering leadership is essential, as industries struggle to find qualified mid-senior level managers who can navigate today’s complex workplace dynamics.
Adapting to Economic and Geopolitical Shifts
Economic and geopolitical factors, coupled with the lingering impacts of the Covid-19 pandemic, are shaping New Zealand’s job market as it enters 2025.
The importance of adaptability and innovation is being underscored for both employers and jobseekers. “As we move into 2025, the ability to adapt, learn, and embrace innovation will be critical for both employers and jobseekers,” Peters advised.
Preparing for the Future of Work
“The future of work in New Zealand is evolving, and those who stay ahead of the curve will be best positioned for success,” Peters concluded. For businesses and professionals willing to adapt and innovate, the challenges of 2025 could become opportunities for growth.