Flexible work, AI, cost-of-living to impact employment landscape: report
The year 2025 will be a "year of transformation" for New Zealand's workforce as employers face the pressure in retaining talent, accommodating work preferences, and addressing cost-of-living challenges.
This is according to Shay Peters, Robert Walters CEO of Australia and New Zealand, during the release of the Robert Walters 2025 salary survey.
"It is clear that 2025 will be a year of transformation in the New Zealand workforce," Peters said in a statement. "Employers will need to balance the need for flexibility, career progression, and fair compensation in order to stay competitive and retain top talent."
According to the report, 66% of businesses are actively looking for new employees this year. However, they are faced with a multitude of trends that can impact their competitiveness.
The report found that 22% of employers agree that their employees aren't earning enough to keep up with the rising costs of living and inflation.
"Employers know their staff are not earning enough, but they simply do not have the means to increase wages," the report said.
It noted that only 62% of employers are likely to provide salary increases this year. Expectations in the workforce are also low, with only 57% of employees anticipating a pay hike.
The report described them as "relatively low" findings that reflect the broader economy, with employees lowering their expectations amid a lack of job security and a weak job market.
Employers also have to deal with the shift in workplace preferences.
Robert Walters found that 54% of employees prefer a combination of in-office and remote work, indicating a stronger demand for flexibility.
"This contradicts what we are seeing in the media around businesses requesting their employees back to the office five days a week," the report said.
In fact, 73% of employers in New Zealand said they prefer hybrid work arrangements, while only 16% of employers prefer full-time office-based arrangements.
Meanwhile, the report also found that AI will continue to reshape the employment landscape in New Zealand.
It noted that 82% of employers are already encouraging the use of AI at work, despite 61% of employees expressing concerns over job security as the technology continues to advance rapidly.
"However, experts at Robert Walters believe AI is unlikely to replace jobs but will instead support daily responsibilities," it said.
A recent World Economic Forum report found that 41% of employers across the world are planning to downsize their workforce in areas where AI can replicate human work.
But more than three in four employers said they plan to reskill and upskill staff to better work alongside AI.