Labour market under further pressure as NZers head overseas

The labour market is expected to become increasingly challenging, with an unprecedented number of people moving away from New Zealand, while AI is driving demand for skills that are likely to be in short supply.

Recruitment firm Robert Walters says a lack of opportunities and inadequate salaries are driving people to seek employment overseas, which could see the country lose a substantial number of highly skilled individuals, potentially for the long-term.

"It's no secret that the job market in New Zealand is pretty dire currently," chief executive Shay Peters said.

A survey of top-200 tech sector companies by the Technology Investment Network (TIN) indicates about 47 percent of all workers are based overseas, with health-tech workers making up the largest group, followed by IT support workers, software solutions and fintech.

TIN head of research Alex Dickson said New Zealand had spawned a critical mass of profitable tech firms with global reach over the past two decades.

"A feature of these companies is their use of dynamic hiring strategies that balance onshore and offshore expansion," Dickson said.

Peters said remote work arrangements was one way to manage skills shortages.

"With a diminishing pool of qualified candidates available locally, employers in New Zealand may need to expand their search internationally and offer remote work options in order to bridge the skills gaps and address the talent shortage."

He said a shrinking pool of talented staff would also make it more difficult for employers to recruit people with the skills necessary to integrate AI with IT, finance and engineering functions.

"The workforce will increasingly need to embrace continuous learning to stay ahead of evolving technology trends. It's no longer enough to simply be proficient in current systems. The ability to adapt to new tools and platforms will be paramount."

AI drives demand for soft skills

Peters said a growing concern was a scarcity of soft skills among the up and coming workforce, who have been raised on a steady diet of digital, rather than face-to-face communication, collaboration and the negotiation skills required to make the most of AI.

"AI may replace technical tasks, but roles requiring stakeholder management, communication, influence and the ability to complement AI will remain in high demand."

Management candidates in short supply

Peters said there was also increasing demand for entry-level and junior management talent, with many industries struggling to find qualified mid-senior level managers and executives.

Research from Robert Walters indicates just 11 percent of professionals considered career progression a top priority, with most Gen Z employees saying they did not want the added pressures of management for low reward.

"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.

Sign up for Ngā Pitopito Kōrero, a daily newsletter curated by our editors and delivered straight to your inbox every weekday.