Economic Shifts Challenge NZ Job Market in 2025

New Zealand's labour market is in a period of significant flux as we approach 2025, with various challenges and shifts impacting both employers and job seekers. The unemployment rate has seen a notable increase over the past year, though it remains below the peaks experienced during the height of the COVID-19 pandemic and earlier periods of economic instability. Despite these concerns, the overall trends suggest there may be some stabilisation on the horizon.

The employment rate, sitting at 67.8%, has seen a slight decline from 68.4%, indicating a relatively steady number of people in work. Job advertisements have experienced fluctuations, with a surprising peak in July that provided a moment of hope for many in the recruitment sector. The participation rate has also remained stable, now at 71.2%, down only slightly from 2023 levels. These figures reflect the resilience of the labour market, though they also highlight areas where attention is needed to support further growth and sustainability.

However, it's important to acknowledge that certain sectors are feeling the strain more acutely than others. Industries such as retail and hospitality have faced particular challenges, with reduced consumer spending impacting job availability. Conversely, sectors like healthcare and technology continue to show resilience, providing a glimmer of hope for sustained employment growth. As we move into 2025, maintaining a balanced view of the labour market's strengths and weaknesses will be key to navigating these uncertain times.

“We're not facing the extreme highs we saw during COVID or prior to that. It's about recognising the trends and hoping for a levelling out as we move forward.”

In Frog Recruitment Thrive in 2025 Market Update, NZ's Managing Director, Shannon Barlow, offered in-depth insights into the current state of the labour market during a live stream discussion. Shannon began by addressing the rise in unemployment, stating, “While the increase in unemployment is concerning, it's important to keep a broad perspective. We're not facing the extreme highs we saw during COVID or prior to that. It's about recognising the trends and hoping for a levelling out as we move forward.” Her balanced perspective helped to paint a more nuanced picture of the current economic situation—yes, the rise is worrying, but it's not unexpected given the current climate.

Shannon also touched on the employment rate, noting that despite the drop to 67.8%, the figures remain fairly stable, and many people are still in work. This stability has provided some optimism for those navigating the job market. She pointed out that the July spike in job advertisements was a significant but temporary moment, which gave the market a boost before things began to ease off again. Her expectation is that while December and January are typically slow, “we can hopefully expect a gradual increase in activity as we move further into 2025”.

The NZ Market Update also explored regional trends, particularly in Auckland and Wellington. Shannon highlighted how these major urban centres are reflecting the national stats but are also seeing specific regional dynamics. For example, both cities have had to adapt to changes in job availability influenced by shifting economic conditions. The conversation underscored the importance of both employers and job seekers being flexible and resilient in response to these shifts. Employers are increasingly seeking candidates who can navigate uncertainty, while job seekers are focusing on skill development and adaptability as crucial tools for securing opportunities.

Shannon also emphasised the need for collaboration between businesses and the government to create initiatives that support employment growth. She mentioned that targeted support for industries struggling the most could help mitigate some of the negative impacts of rising unemployment. By fostering a supportive environment for both employers and workers, there is hope that the labour market can regain its momentum and build towards a more stable future.

Tips for Navigating the Labour Market in 2025

As we look ahead, adapting to the evolving labour market is key for both job seekers and employers. Here are some strategies to help make the most of the current conditions:

1. Diversify Skills and Stay Relevant: With the labour market experiencing shifts, upskilling and reskilling are more important than ever. Workers should focus on building versatile skills that are in demand, particularly in industries like technology, healthcare, and sustainability. This will help make them more attractive to potential employers in a competitive environment.
   
   
2. Leverage Temporary and Contract Roles: Temporary and contract work can be a strategic way to gain experience, network, and keep income flowing during uncertain times. Many employers are opting for more flexible work arrangements, which presents an opportunity for job seekers to enter new industries and prove their value.
   
   
3. Be Open to Relocation or Remote Work: Flexibility in location can expand job opportunities, particularly as some industries grow more rapidly in certain regions or embrace remote working options. Considering roles outside your immediate area or exploring fully remote positions can increase your chances of landing a job.
   
   
4. Focus on Sectors with High Demand: Industries such as technology, healthcare, and sustainability continue to show strong growth potential in New Zealand. Job seekers should align their skills and experience with the needs of these industries, as they are likely to provide the most stable opportunities moving forward.
   
   
5. Adapt to the Changing Recruitment Landscape: Employers are looking for candidates who demonstrate adaptability, resilience, and a proactive approach. Emphasise these traits during your job search to better position yourself for opportunities. Personal branding and networking, particularly through platforms like LinkedIn, can also play a significant role in creating new connections and job leads.
   
   

Navigating the evolving labour market in 2025 will require a proactive and flexible approach, both from job seekers and employers. With the right strategies and an understanding of market dynamics, there is hope that we will see positive movement in the months to come, providing more stability and growth opportunities across the country.

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In business since 2002 in New Zealand, Frog Recruitment is an award-winning recruitment agency with people at our heart. Located across Auckland and Wellington, we specialise in accounting and finance, business support, education, executive, government, HR, legal, marketing and digital, property, sales, supply chain, and technology sectors. As the proud recipients of the 2024 RCSA Excellence in Candidate Care Award, we are dedicated to helping businesses achieve success through a people-first approach.