Employment Hero: Kiwi jobs market grows but wage stagnation is eroding worker gains

Auckland, New Zealand, 30 March 2026 — The latest data from Employment Hero reveals that despite strong job growth, stagnating wages are impacting Kiwis, as average pay increases fall well behind inflation.

Employment Hero’s Jobs Report for February 2026 found that wage growth is in long-term decline. Twelve months ago, wage growth sat at 5.6% year-on-year, compared with 0.2% in the latest year-on-year data. The Jobs Report is based on data from more than 10,000 Kiwi businesses and 70,000 employee records. 

“Wages have well and truly stalled for Kiwis. With inflation hovering around 3%, this represents a real-time loss for Kiwi workers,” says Neil Webster, Employment Hero General Manager NZ.

One age bracket is bucking the trend, with wage growth sitting at 2.3% year-on-year for people 45-54.

“That age bracket is faring better than others, where growth is below 1%. However, this data shows even the best-performing bracket is failing to keep pace with rising costs,” Webster says. 

“The situation is particularly stark for the 25–34 age group, where year-on-year wage growth is -1.1%.”

Webster says the 45–54 age cohort could be benefiting from the demand for experienced staff.

“We know businesses are struggling to find highly skilled workers, which could be why this age cohort is more desirable. Another possible reason is the growing focus on retaining skilled staff and ensuring existing employees are compensated fairly with annual increases.”

Greenshoots in the job market as employment growth up 

Despite wage stagnation, employment growth is positive for much of the country – up 6.7% year-on-year compared to February last year. 

Canterbury is leading the way (up 6.2%), closely followed by Auckland (up 6.1%), and the Waikato (up 0.5%). Workers aged 25–34 saw the largest increase in job numbers, up 9.7%.

The report shows casual work is driving the employment growth up 21.7% year-on-year with consistent monthly increases over the past 12 months. 

Webster says the uptick in casual work has persisted after the holiday period, which could point to the economic uncertainty businesses are feeling.

“One of the drivers for this increase could be businesses opting to hire casual workers instead of expanding their full-time staff because they’re cautious of future economic headwinds.”

AI literacy increasingly desired 

Employers are treating basic AI understanding as an expected skill for a wide range of roles. For example, the report shows employers in NZ are increasingly seeking out non-technical staff with strong AI literacy skills, and at the same time, dedicated AI engineering roles are growing steadily. 

Mentions of AI in job listings is sitting at 0.6% in the first quarter of this year – almost identical to Australia on 0.67%. 

Webster says this is significant, given the dataset for New Zealand is roughly 20 times smaller than that of Australia. 

“This shows that the AI hiring shift is a consistent trend for small businesses across both New Zealand and Australia. Employers value talent with strong AI skills even outside of technical roles.”

Wellington employment and wage growth still going backwards

The report underscores ongoing challenges for the capital, where employment growth is -1.5% year-on-year and wage growth is -4.6%. This downward trend appears to be continuing with employment growth down 1.5% percent from January to February this year. 

Waikato is also under pressure, with wage growth at -1.9% year-on-year. Notably, Christchurch stands out as the only region where wage growth is keeping pace with inflation, up 3.2% year-on-year.

Retail and hospitality lead employment growth

Of the sectors with the most robust available data, employment growth is being driven by retail, hospitality and tourism (up 13.4% year-on-year) and agriculture, energy and mining (up 10.9%). Healthcare and community services and manufacturing, transport and logistics are also up 7.7% and 7.6% respectively. Meanwhile, construction is fairly flat at 0.4%, while science and technology is down 2.7% year-on-year. 

Wage growth uneven across sectors

Retail, hospitality and tourism, along with manufacturing, transport and logistics, are driving wage growth, up 3.1% and 3.2%, respectively. Construction and trades have also seen a 3.1% year-on-year increase. Science and technology is fairly flat at 0.2%, while agriculture, energy and mining wages are down 0.6%, and healthcare and community services are down 5.5% year-on-year. 

Webster says the data highlights an overall trend: while more jobs are available, earning potential remains limited across many sectors.

“It’s positive to see the number of available jobs increasing, but with unemployment still high and a large pool of available workers, this is being reflected in workers’ pay.”