What is the Auckland tech hiring market experiencing?

Well, spring is nearly here…will a new season bring a brighter economic outlook and a more buoyant employment market? 

Since the Reserve Bank has lowered the OCR and the bank's followed suit by decreasing their rates, it has created a more positive tone in conversations.  However, we believe a market turnaround will be a slow recovery versus a bounce back. "Survive until 2025" is a phrase that has been uttered by many a leader. 

Reports state that the economy has edged out of a recession driven by service industries and energy production, however economists warn we aren't out of the woods just yet. Annual inflation is currently at 3.3%, according to Stats NZ, in July. According to SEEK, for the first time since January, job ads rose by 3% m/m, and applications per job ad were up 7% m/m in the July quarter. This is a good sign that we are slowly moving towards a more stable hiring market however there are still a lot of candidates searching for opportunities. 

Much has been reported about the impact of the change in government on Wellington and the public sector, however it must be noted it has had rippling effects across Auckland and the private sector as well. Therefore, what are the impacts that we've seen on the ground? 

• Longer hiring cycles
• Cautious spending and austerity measures
• Implementing rate cards 
• Negotiating rate reductions upon extensions or even at the offer stage
• Retrenchment of teams
• Increased approvals/signs offs 
• Longer notice periods for contractors
• Implementing 9-day fortnights
• Negotiation with supplier's commercial terms

One of the many unfortunate results of our economic situation is a much-reported "brain drain".  According to Stats NZ, there was a provisional net migration loss of 55,300 New Zealand citizens in June 2024. The net migration loss of New Zealand citizens in June 2024 was made up of 24,900 migrant arrivals and 80,200 migrant departures. For every migrant arrival of a New Zealand citizen there were just over three migrant departures.

Typically, when we lose Kiwis on the good old-fashioned overseas experience, we normally do get them back when they decide they want a more "Kiwi lifestyle".  However, it's not quite the same when we lose Kiwis to Australia.  So - how will the government plan on enticing them back?  And given all we've said about the economic climate and the reality for public and private sector organisations, how will businesses retain our best and brightest? We've got a few recommendations below. 

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? And when this happens, what will be the impact? Could we see another post-COVID hiring market? Will it be exasperated with our increased net migration?
Will organisation's be even more impacted based on how they approached their employees and hiring during this time? These are questions that businesses and the government must be considering. 

CANDIDATE NEEDS 

• Security, whether that's for perm or continuity of their extension. Security is a high priority. 
• 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, and people really do not want to give up if they have it established. 
• Exciting growth opportunities and staying abreast of growing technologies. 
• Making themselves "sticky" in a highly changeable employment market.

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.
• Wanting people to be in the office more and contribute to collaboration more.
• Reduce the cost of their workforce / driving cost efficiencies. 
• Streamline processes and automate where possible. Drive increase in productivity. 
• Leadership who can lead change and can do so in volatile times.

What the next few months will bring

With only 4 months till Christmas, we anticipate leaders to continue to be cautious in their decision making and to continue to find opportunities to streamline processes and increase productivity. At the same time, with AI being a hot topic, leaders are also grappling with the potential of technology. 

There will be increased pressure on leaders to do more with less from their team members and from their C-Suite. They'll need to hold together teams culturally whilst balancing return-to-office mandates and the need for flexibility. Leaders must ensure clear communication and speak with honesty – team members will see right through it if it's not. They must 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. With the recent tech layoffs taking top space in the front-page news, security in roles has been a big topic of discussion with candidates looking at making a move. 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. 

In good news, mortgage rate cuts are starting to happen following the Reserve Bank's decision to lower the OCR earlier this month. BNZ were the first to honour this, announcing both its classic and standard rates were lowering on top of its fixed rates. 
Candidates are still seeking higher salaries, given that inflation is above average, yet organisations are making cost-conscious decisions, which will continue to make for an interesting and potentially volatile market. 

No matter what, looking after your team members should be any business's number one priority. With the global tech skills shortage sticking around, demand for hard-to-find, highly skilled talent isn't going anywhere. Look after your teams, and they'll look after your customers.