Exclusive Employment Hero Jobs Report data reveals a widening productivity gap in New Zealand, marked by employment growth alongside falling hours, shrinking tech skills and weaker pay for young workers.

New Zealand added jobs through the end of 2025, according to Employment Hero’s December NZ Jobs Report. But underlying weaknesses are intensifying even as average hours worked fell sharply and high skill capability declined in key industries. The combination points to a workforce that is expanding in size but losing momentum in productivity and resilience.

Average hours worked dropped 4.7 per cent year-on-year, with declines recorded across every age group, including full-time workers. By comparison, Australia recorded a smaller fall of 1.3 per cent over the same period.

A Concerning Trend Emerges In A Key Sector

Neil Webster, Employment Hero general manager for New Zealand, said falling hours alongside rising job numbers should concern employers and policymakers.

“New Zealand has more people in work, but fewer of the skills that drive innovation and fewer hours being delivered overall,” Webster said. “If high skill sectors shrink while hours fall, you are building a bigger workforce but not a more productive one.”

The most striking skills decline occurred in Science and Technology, one of the country’s highest-paying sectors. Employment in the industry fell 3.7 per cent year-on-year, despite a median total hourly rate of $55.80.

Webster said the contraction of digital and technical capability posed a long-term risk.

“When your most critical capability is contracting, you have a strategic challenge,” he said. “Construction and manufacturing are accelerating, but digital capability is sliding backwards, and that gap will cost us.”

The News Isn’t Great In Media And Sales

Sales, Marketing and Media roles also showed volatility. Job numbers in the category rose 6.1 per cent month-on-month in December but remained down 19.5 per cent year-on-year.

Major New Zealand media companies have cut hundreds of roles over the past year as advertising revenue fell and spending shifted toward global digital platforms.

The closure of Newshub, job cuts at TVNZ and NZME, and restructures across Stuff, MediaWorks and RNZ have reduced demand for marketing, content and newsroom support roles.

“These cascading job losses have reshaped the entire media ecosystem,” Webster said. “Employers are hiring in short bursts and then pulling back as budgets tighten.”

Flexible Workers Face Big Swings

Casual employment surged 18.6 per cent over the year, but the increase did not translate into more work. Hours for casual workers slumped by 21.2 per cent year-on-year and 7.4 percent month-on-month.

Webster said the pattern reflected rising uncertainty. “Casuals are being hired, but the hours simply are not there,” he said. “They are working more jobs and not earning more money.”

The pressure was most acute for younger workers. Employees aged 18 to 24 saw pay fall 2.0 percent over the month, while those aged 25 to 34 experienced a 0.9 per cent decline.

“With living costs still rising, even a small drop hurts,” Webster explained. “Young workers are the most mobile and the most financially exposed, and right now, they are going backwards.”

What Are The Pressure Points In 2026?

The report suggests the labour market is adjusting through reduced hours rather than large scale job losses, a pattern that can mask economic strain.

“More people working fewer hours is a sign of unstable demand and employer caution,” Webster said. “It is a productivity warning light.”

Employment Hero data shows clear pressure points as New Zealand enters 2026, particularly around skills development, job quality and income security.

“If New Zealand wants a labour market that is resilient and future ready, 2026 must be the year we invest in skills, protect hours and support workers at both ends of the wage spectrum,” Webster said. “The data is telling us exactly where the pressure points are.”

A Success Story Has Emerged In The South 

There was one welcome story of regional resilience. Employment Hero data from Otago revealed massive year-on-year employment growth of 24.4 per cent. 

This may be driven by a “triple threat” of local factors creating a demand for labour – the $1.88B Dunedin Hospital project; the resurgence in South Island tourism, particularly due to increased visitation by Australians; and the strongest level of home consents in the country.

SME owners from other regions may look to Otago with a glimmer of hope for a similar recovery.