Published Date: 11th November 2024
A growing focus on restructuring, belt-tightening and a steadily increasing New Zealand unemployment rate has made recruitment much easier for organisations – or so it seems.
As hiring activity cools off in Aotearoa, employees are less likely to make a move, which in turn has lowered staff turnover and reduced salary pressure. It’s no wonder that organisations appear confident in their ability to retain talent of late. Job applications and views on job ads have surged, giving internal recruitment teams a sense of optimism.
Is it possible that employers now have the upper hand? The answer is perhaps – but not for long. We explain how hiring dynamics are shifting and why employers might have to be more strategic in their workforce planning than they are right now.
Panic in the Water
Despite high numbers of job applications, New Zealand recruitment teams are not quite seeing a corresponding rise in the quality or suitability of candidates. This isn’t a reflection of individual applicants' abilities but rather a sign of growing panic among job seekers.
More job seekers are applying for any role they see advertised, creating plenty of mismatched applications that recruiters must wade through to find the handful of candidates with genuine potential. It’s a phenomenon that our clients are also experiencing, one that is straining internal recruitment teams – despite the seeming abundance of job applicants.
New Zealand’s Brain Drain
Enter a highly significant and complicating factor for anyone recruiting in New Zealand: the growing exodus of talent leaving the country. It’s no coincidence that, as the cost of living rises and the New Zealand employment rate inches upwards, working-age Kiwis are leaving the country in search of more financial stability.
We have seen significant numbers of qualified, experienced individuals heading across the ditch in search of the Australian dream. Whilst not at historic highs (yet), the net migration loss of 27,000 people from New Zealand to Australia in 2023 represents a strong uptick from the pre-COVID years.
Unlike moving to the UK, leaving for Australia may be a more permanent decision for many New Zealanders. Australia is just a 4-hour flight away, making it easy to pop back home for Mum and Dad’s anniversary. Culturally speaking, we have more in common with our Aussie neighbours than the UK.
What does this all mean? Drawing on previous experience from the GFC and the recent COVID lockdowns, employers should be wary of resting on their laurels and assume that a softer labour market means recruitment will remain easy. These migration loss figures are a sign that the talent pool will indeed be smaller when the market shifts back into growth mode.
Economic Conditions Can and Will Change
We are seeing the early signs of a recovery. Business confidence has recently surged to a 10-year high, whilst inflation expectations dropped to 2.9%, falling below 3% for the first time since July 2021, ANZ data shows.
However, we expect the next few months to remain challenging on the economic front. However, when the green shoots of recovery fully materialise, will we see the recruitment challenges from 12-18 months ago make a comeback? During that time, candidates were effectively pulling the strings, and organisations found themselves clambering for the best talent in the market.
We may not see a direct repeat of 2023, but we believe we will again eventually see a highly competitive market – and one where our national talent pools have been getting closer to puddles.
How to Plan Ahead
Before the tide turns once again, building relationships and employer brand will be key, along with the ability to access passive candidates. Knowing how to collaborate with those who understand your organisation's unique style and partner with the right recruiters is a crucial part of your workforce planning.
As we noted last year, a slower hiring market creates opportunities for organisations to do workforce planning and shore up their HR practices and workplace culture. Now is an ideal time to make improvements to your recruitment processes and read just talent strategies with more of a long-term view. That way, your teams can be more effective and agile when hiring demand increases.
It's also sensible to work on identifying current and future skills gaps in your organisation, accounting for major projects and business transformations that might be on the horizon over the next 12-18 months.
New Zealand Recruitment Expertise You Can Trust
The feverish competition for talent may appear to be on hiatus for now, but we can guarantee it will return as market conditions improve. The question is, are employers ready?
At Beyond Recruitment, we help organisations consider such questions and decide on the right course of action with their hiring. Whether it’s help with identifying future talent pipelines, shortlisting candidates or providing essential support to your recruitment process, our teams will provide you with a tailored solution. Please feel free to reach out to us today for a discussion.
