New Zealand jobs rise but wages & hours fall amid caution

New Zealand's jobs market recorded employment growth in the past year, but workers continue to feel pressure amid stagnant wages and declining hours as the year draws to a close.

Uneven gains

Employment levels across the country increased by 4.5% year-on-year and 6.0% quarter-on-quarter, according to figures compiled from real-time payroll data.

The South Island outpaced the North Island, with annual employment growth of 8.5% compared to 1.6%. Otago led regional performance with a substantial 32.5% yearly increase, while Hawke's Bay saw significant month-on-month growth of 12.7%.

Hiring was strongest in casual roles, with a 12.6% rise year-on-year and 4.48% month-on-month, reflecting businesses' continued reliance on flexible labour. Industries such as Construction and Trade Services continued to deliver strong employment outcomes, up 13.1% year-on-year. The Science and Technology sector led monthly growth, rising 4.8%, buoyed by increased demand for skills in artificial intelligence.

Wages fail to keep pace

Despite more people in work, workers' pay did not see similar improvements. Median hourly wages declined 0.1% in October and 1.4% quarter-on-quarter, settling at NZD $35.10 per hour.

The South Island recorded the highest annual wage growth at 4.1% yet experienced a month-on-month drop of 0.6%. Median wages in Canterbury grew 5.4% over the year but dropped 2.3% in the latest month. Wage stagnation persisted across casual, full-time, and part-time positions.

The largest hourly wage growth was found in Retail, Hospitality, and Tourism (up 4.1% year-on-year), with Education and Training registering declines of 1.9% annually and 0.9% month-on-month. Many of the lowest-paid roles remain concentrated in customer-facing sectors, with earnings typically under NZD $27 per hour.

Falling hours worked

The number of hours worked continued to contract, despite rising employment figures. Nationally, average hours dropped 0.1% in October and 0.6% annually and quarterly. This decline was mirrored in Australia, pointing to a broader regional trend that could impact productivity and job security. The North Island's average hours worked fell 0.7% year-on-year and 0.1% month-on-month, while the South Island saw little change.

Notably, casual work hours fell 8.9% year-on-year and 5.2% month-on-month. Part-time hours increased by 3.5% annually. Education and Training was the only sector where hours worked rose noticeably, up 13.6% year-on-year, while Healthcare and Community Services marked the biggest monthly drop at 2.0%.

Younger workers, especially those aged 18-24, continued to drive employment growth, posting a 12.4% year-on-year increase.

However, this group also saw their average hours decline. Employment for women dropped 0.6% over the same period.

Business response

Employers face ongoing challenges related to inflation and regulatory compliance, driving cautious hiring strategies even as overall employment numbers climb. A pattern has emerged of more workers holding several jobs to offset falling hours and unchanged wages.

"Jobs are returning with force after a slower few months. Businesses are hiring again, but they're still cautious about how much work they're giving people. A spike in hires alongside a dip in hours suggests many Kiwis are patching together multiple jobs just to stay afloat. Plus, this dip in hours is across all employment types, including full-time, which is a red flag for output and job security. More people are working, but we're not necessarily getting more done," said Ben Thompson, Co-founder and CEO, Employment Hero.

He added, "Employers are still doing what they can to stay competitive amid inflationary pressures, but layers of legislation and increasing cost of compliance mean it's never been a more expensive or confusing time to be an employer. Businesses aren't pulling back, but they are feeling restricted and doing what they can to keep their employees and their business above water."