in 2017


Key drivers

Overall wage pressure (6.2)

Wage pressure increased substantially in New Zealand this year. Wage growth in 2018 is expected to be high relative to historical averages.

Labour market participation (5.4)

With labour market participation rates already high, slowing growth may put pressure on firms in New Zealand seeking to expand.

Talent mismatch (5.3)

The rate of job vacancies to employment has risen, indicating that it is increasingly difficult for firms to find and retain workers with the right skills.


Education flexibility


Labour market participation


Labour market flexibility


Talent mismatch


Overall wage pressure


Wage pressure in high-skill industries


Wage pressure in high-skill occupation


View from the Ground

Despite recent concerns over business confidence and immigration, and an increase in the minimum wage, unemployment has fallen and career-advancing opportunities are available for top talent. With employers continuing to add to their teams, the demand for highly-skilled professionals will rise. However, such talent is already in short supply. Add a high labour market participation rate and employers have a smaller pool of workers to choose from. As our findings show, talent mismatch is already an issue for employers, although this is not leading to salary growth, with increases best described as restrained. Instead, employers are turning to upskilling, career progression and other non-financial benefits to attract and retain top talent.

Adam Shapley, Managing Director, Hays New Zealand

COUNTRY profile

Unemployment in New Zealand has been steadily declining for the past five years, reaching a ten-year low of under 4.5% in early 2018. This comes despite additional people joining the labour force, as the participation rate reached an all-time high of 71% in 2017.

Although economic growth is forecast to remain solid in the short- and medium-term, spare capacity in the labour market is likely to become more of a limiting factor. Businesses report ongoing difficulties in finding both skilled and unskilled labour, intensified by the low level of joblessness. Plans to reduce immigration by 20,000 to 30,000 a year will place additional constraints on New Zealand’s growth potential.

Key skills in demand

  • Construction Management/Skilled Building Trades
  • Structural Engineers
  • Civil Engineers
  • Project/Transformational Change Managers
  • Payroll Specialists