Cracks of light at end of the tunnel for small and medium businesses

Auckland, New Zealand, 20 May, 2026 — Sustained employment growth is being driven by small and medium businesses continuing to hire staff despite economic pressures, according to the latest Employment Hero Jobs Report. 

Month on month data held steady with April employment growth up 0.5%, slightly lower than February and March at 0.9% and 0.7% respectively. 

The Jobs Report, based on data from more than 2,000 Kiwi businesses and 85,000 employee records, is a monthly representation of the employment market, especially the SME sector. 

“These incremental gains over the last few months indicate SMEs are hiring but taking a cautious approach given the continued economic uncertainty,” says Neil Webster, Employment Hero General Manager NZ. 

“It’s still a little fragile out there; there is no denying it. However, SMEs are working through it, sticking to their knitting, and keeping on going.

“Another positive is employment growth continues its upward trajectory over the long term, with 8.8% year on year growth in April compared to just 1.5% this time last year.”  

Uptick in average hours worked 

Webster says countering the reality of the current economic landscape is the increase in average hours worked, up 2.2% year on year and up 2.1% against three months ago. 

“Not only are we seeing employment growth but with average hours worked also increasing it means employees have the opportunity to take home more in their pay packet,” he says.   

There was a significant uptick in hours worked for casual employees – 8.4% year on year and 1.9% against three months ago. “This means casual workers are getting extra hours during the week which is great news for the likes of students, whose living costs continue to bite.”

Wages show signs of life

Wages have had a bounce back, up 0.8% month on month after three months of negative or stagnant growth. However, with wages up just 0.4% year on year, the data shows a continued trend of being a real-term loss for workers, with it still well below inflation. 

“The monthly gain is positive, but the year on year growth figure is the lowest in the last 13 months. In April last year, wage growth stood at 5.4% year on year, with a rapid decline since September.”  

Regionally, Auckland leads wage growth at 1.4%, which is positive in contrast to negative growth in Canterbury (-0.5%), Wellington (-0.4%) and Waikato (-3.0%). 

Youth employment stutters 

In line with Statistics New Zealand’s latest youth employment data for the first quarter of 2026, Employment Hero’s April report shows employment growth was down -0.9% in the 18-24 age bracket month on month. 

However, year on year youth employment growth data shows an up tick of 12%. 

Webster says the year on year figure is likely to be driven by a swing towards hiring casual workers as businesses face ongoing economic pressure. 

“For example, SMEs in New Zealand are heavily represented in hospitality, retail, and trades sectors. These sectors may be having a ‘micro-boom’ in hiring young people which isn’t happening in the corporate or manufacturing sectors. 

“While casual roles were down 2.1% month on month, they were up 20% year on year, which can benefit the younger end of the workforce because they are ideal candidates for casual contracts rather than permanent roles. This enables businesses to maintain operational flexibility.”