New Zealand, as with basically everywhere, has seen an increase in the adoption of AI technologies across industries. However, contrary to alarmist predictions of widespread job losses, the impact of AI on employment remains modest at this stage. According to reports from New Zealand’s Treasury and the AI Forum, while AI has begun influencing specific job sectors, the displacement of workers remains minimal, with only 8% of businesses reporting any significant changes in tasks traditionally performed by humans.
Peter Griffin recently discussed AI’s slower-than-expected impact on the job market in BusinessDesk. Griffin states that although AI has reduced the need to hire in some areas, it hasn’t resulted in large-scale job losses yet. AI is making its most notable mark in white-collar sectors such as administration, marketing, and project management, which are more susceptible to automation due to the repetitive nature of the tasks involved. This aligns with the Treasury’s prediction that New Zealand’s higher concentration of knowledge-based jobs makes its labour market particularly vulnerable to AI’s transformative impact.
Subtle Shifts, Not Drastic Changes
In New Zealand, AI’s immediate impact on employment is felt in how it has streamlined tasks, but it has not yet eliminated entire jobs. AI tools like chatbots, predictive algorithms, and machine learning systems are increasingly being integrated into daily business operations to improve efficiency. This has, notably, led to a reduction in hiring needs, especially for roles that involve routine administrative tasks. A report from the AI Forum found that 29% of businesses have reduced the need for new hires due to AI’s ability to automate processes.
Dr Andrew Lensen, a senior lecturer in AI at Victoria University of Wellington, emphasised that most organisations prefer not to admit that AI has led to job losses, often citing improved productivity instead. “Organizations don’t tend to want to admit that they have fired people because of AI,” Lensen noted, adding that AI’s full impact on hiring may become clearer in the coming years.
AI’s Role in Reducing Hiring Needs
One of AI’s most significant contributions has been its ability to increase productivity while reducing workforce requirements. A 2024 AI Forum survey revealed that the introduction of AI in New Zealand businesses has, unsurprisingly, allowed companies to perform more tasks with fewer people. This is particularly evident in industries like marketing and software development, where AI tools such as generative AI have automated tasks that would otherwise require multiple employees. For example, Amazon reported saving 4,500 developer years of work by using AI to streamline tedious software updates.
This increase in efficiency has prompted concerns that hiring will slow down in specific sectors. As more businesses adopt AI to manage routine tasks, fewer entry-level positions in areas like administration and customer service are expected to remain. As AI increasingly handles repetitive tasks such as data entry and compliance checks, businesses may opt for smaller teams augmented by virtual assistants and AI-powered tools.
The Disproportionate Impact on Skilled Jobs
For perhaps the first time, skilled professions are more exposed to technology disruption than lower-skilled jobs in New Zealand. AI’s capacity to perform complex analytical tasks, automate decision-making processes, and enhance operational efficiency means that roles traditionally held by highly skilled professionals, particularly in finance and technology, are at greater risk.
Christian Brown, COO of Absolute IT and Madison Recruitment, expressed cautious optimism about AI’s role in shaping New Zealand’s job market. He noted that while some jobs will inevitably be lost, new opportunities will also emerge, particularly in technology-focused roles. This view is echoed in the Treasury report, which emphasises that advanced economies like New Zealand are more susceptible to AI’s effects on skilled labour, with jobs requiring high levels of education and training most at risk.
Balancing Productivity Gains with Job Displacement
The trade-off between productivity gains and potential job displacement is a central issue in the ongoing debate about AI’s impact. AI is boosting productivity in New Zealand, with businesses reporting both cost savings and operational efficiency. The AI Forum’s survey found that 96% of respondents acknowledged improvements in efficiency, and 50% reported a positive financial impact on output through the integration of AI into their operations. Interestingly, however, productivity as a whole is only expected to increase by 1.5% annually.
Ultimately, the question remains: Will these productivity gains lead to fewer jobs in the long run? Some analysts predict that AI’s continued integration could slow job growth, particularly in sectors where automation is most effective.
How Are We Adapting to AI’s Impact? Skills Development and Government Initiatives
There is a growing consensus that both businesses and the government need to focus on skills development and upskilling to ensure workers remain relevant in the AI economy. According to the New Zealand Productivity Commission, up to 46% of jobs could be at risk of automation over the next 20 years, making reskilling a priority. The AI Forum’s survey also highlighted that AI has created new career opportunities within organisations, but there is an urgent need to train workers for these roles.
The New Zealand government has launched the Artificial Intelligence Action Plan to help businesses and workers adapt to AI’s growing influence. This includes initiatives aimed at upskilling the workforce, particularly in areas that complement AI technologies such as data analysis, machine learning, and digital literacy. A key focus will be on developing educational programs and training initiatives to equip workers with the skills needed to thrive in an AI-driven economy.