New Zealand small and medium businesses have moved out of survival mode into a period of stability but are yet to find the confidence for growth, according to Employment Hero’s June Jobs Report.
Employment across Kiwi SMEs rose 1.3 per cent month-on-month in June, the strongest monthly gain in six months. By contrast, wages were steady at 0.0 per cent, extending a run of flat pay growth.
The June figures, drawn from Employment Hero’s platform data covering thousands of New Zealand SMEs, suggest cautious discipline. Businesses are expanding where they need to, but owners are not yet loosening the purse strings to offer higher wages or make big investments. The picture isn’t uniform: regional divides are emerging, and some sectors are pulling ahead of others.
The Trend For June Is Careful And Intentional Hiring
June’s 1.3 per cent monthly lift in employment is the standout figure, capping a 2.3 per cent rise over the past quarter. The persistent quarterly build suggests hiring decisions are being made deliberately, with employers adding roles where the workload demands it but stopping shy of more ambitious expansion.
The measured pace reflects a broader economy that is improving but not yet firing on all cylinders. The Reserve Bank of New Zealand last week raised the official cash rate by 25 basis points to 2.50 per cent, while noting that the economy was back on the road to recovery after the fallout of the Middle East crisis halted the rebound. The Reserve Bank expects economic growth will resume during the September quarter after the economy began recovering from recession, but warns inflation remains above target and further rate increases are on the cards.
Against that backdrop, SMEs appear to be positioning themselves for a recovery that is gathering momentum but still carries uncertainty.
Small Businesses Are Keeping Wages Bills In Check
But while employment edges up, wages are barely moving. June recorded 0.0 per cent movement in average wages across New Zealand SMEs. The picture looks slightly better on a quarterly basis, with wages 1.7 per cent higher than three months ago.
Coming off the back of a deceleration in the second half of last year, this counts as a resurgence, but the year-on-year picture is still noteworthy. Wage growth is flat at 0.0 per cent in the year to June, which is the lowest level observed in 13 months.
Stagnant wage growth in a hiring environment typically points to one of two things: businesses are recruiting new staff in entry-level or lower-cost roles, or a higher unemployment rate means employers are not offering the pay reviews or salaries they would in a stronger market.
Until margins and demand improve, small and medium business owners may choose to keep wage bills contained, but this also means taking a punt on retention. Employees who see hiring activity around them but no movement in their own pay may start looking elsewhere.
Differences Emerge In Regional Labour Markets
The national numbers mask a discernible regional split. Employment in the North Island has grown by 2.2 per cent over the past month, alongside 0.5 per cent wage growth. But both employment and wages have declined across the South Island, dipping 0.3 per cent and 0.4 per cent respectively in June.
The figures do not reveal what’s driving the regional divergence. It may reflect the North Island gaining momentum as the broader economy improves, the South Island cooling after a period of stronger growth, or a combination of both.
“Wellington’s latest results really are a tale of two halves,” says Employment Hero APAC Managing Director James Keene, singling out the capital. “On one hand, the region continues to command the highest median hourly wage in the country. On the other, annual wage growth has remained in negative territory, making it one of the more interesting regional trends in this month’s data.”
Wellington enjoys the nation’s highest median hourly wage at $38.70, above the median of $36.10. June has seen a slight uptick in wages, with an increase of 1.2 per cent, but further growth will be needed to reverse the annual trend, with the year-on-year figure sitting at -3.5 per cent.
Amid the negative figures in the South Island, Canterbury stands out as an exception. Bucking the broader trend, it has continued to post positive employment growth, up 0.5 per cent in June and a healthy 5.9 per cent compared to three months ago. “Canterbury has consistently recorded employment growth above the national average since the start of the year, which is encouraging to see,” says Keene. “It shows that local SMEs are continuing to slowly but surely grow their headcount with small incremental gains.”
But Canterbury has not escaped the weak wage growth of the wider South Island. While wages have grown 0.3 per cent month on month, they’re down 0.4 per cent for the quarter and 1.5 per cent year-on-year.
“The challenge for employers is to convert the region’s employment growth, business momentum, and opportunities like Te Kaha Stadium into stronger wage growth,” says Keene.
Certain Sectors Stand Out As Hiring Hotspots
Sector-level data also hints that the recovery is uneven. Sales and Marketing (6.1 per cent), Education and Training (5 per cent), Healthcare (4.1 per cent) and Science and Technology (4.1 per cent) stand out as the strongest performers for employment growth in June, reflecting sustained demand for skilled roles and services that businesses and consumers continue to prioritise.
On the other side of the ledger, Administration and Office Support (-7.5 per cent), Real Estate and Property (-7.4 per cent) and Retail, Hospitality and Tourism (-1.7 per cent) have shed roles over the same period.
Some sector swings may be influenced by sample sizes but the broader signal is that the roles being created in 2026 are increasingly concentrated in knowledge-based, service-heavy and health-related industries.
