The first quarter of 2025 has brought some positive shifts in the IT job market across Wellington and Auckland. After a subdued 18 months, there are encouraging indications of a recovery, particularly in the private sector, while government hiring remains quieter.
As businesses recalibrate their hiring strategies and IT professionals weigh their options, it’s essential to understand the broader trends shaping the market.
A market in transition
The tech sector in New Zealand has faced significant challenges over the past two years, with economic pressures leading to cautious hiring and project delays.
However, recent months have shown clear signs of improvement, with companies beginning to reinvest in digital transformation and technology projects. This is particularly evident in the private sector, where businesses are seeking to enhance their capabilities and future-proof their operations.
One of the biggest drivers of growth has been the financial services sector. Banks and financial institutions in both Wellington and Auckland have increased their recruitment efforts, creating demand for IT professionals with expertise in cybersecurity, cloud computing, and data analytics.
This increased investment in technology is a positive indicator of market recovery, reflecting a shift from a defensive hiring strategy to one focused on growth and innovation.
Government hiring: a waiting game
While the private sector has shown positive movement, government hiring remains sluggish. Historically, the public sector has played a stabilising role in the IT job market, providing steady employment opportunities even during economic downturns. However, government agencies have been slower to restart large-scale recruitment, with many projects still in a holding pattern.
That being said, there are signs that this may change. We’ve heard of plans within government departments which suggest that upcoming technology initiatives could drive demand for skilled professionals, though these have yet to translate into a significant number of new roles.
IT professionals seeking opportunities in the public sector may need to exercise patience, but the expectation is that hiring will pick up later in the year as new budgets and projects are approved.
The offshore dilemma: retaining tech talent in New Zealand
A recent Younity IT sector survey highlighted a pressing issue: 41% of respondents stated that they were considering moving offshore. This statistic raises concerns about the potential loss of skilled professionals at a time when the New Zealand IT market is beginning to recover.
There are several factors driving this trend. The subdued market over the past 18 months has led some IT workers to explore opportunities overseas, where salaries and career prospects may appear more attractive. Additionally, the rise of remote work has made it easier for professionals to secure international roles without physically relocating, further expanding their options.
However, the real test will be in tracking whether these intentions translate into actual departures. While some IT professionals may choose to leave, others could be swayed by the growing opportunities within New Zealand as the market continues to recover. Employers who want to retain top tech talent should focus on offering competitive salaries, career development opportunities, and flexible working arrangements to prevent a talent drain.
New opportunities and hiring trends
Despite concerns about offshore migration, the overall outlook for the IT job market is becoming more optimistic. Companies are reassessing their workforce needs and gradually increasing hiring activity. This is particularly true for organisations that had put projects on hold in the past year and are now moving forward with their digital transformation initiatives.
Key areas of demand include:
- Cybersecurity: With cyber threats becoming more sophisticated, businesses are investing heavily in securing their systems and data. Skilled cybersecurity professionals are in demand, particularly those with experience in threat analysis, risk management, and incident response.
- Cloud Computing: As more organisations shift to cloud-based solutions, there is a growing need for cloud architects, engineers, and specialists who can optimise cloud environments for performance and security.
- Software Development: Full-stack developers, mobile app developers, and DevOps engineers remain crucial for businesses looking to enhance their digital offerings and streamline operations.
- Data Analytics and AI: Companies are leveraging data-driven insights to improve decision-making, which has increased demand for data scientists, analysts, and AI specialists who can develop predictive models and automation solutions.
For IT professionals looking for new roles, this means that there are emerging opportunities in key industries, and those with specialised skills will be in high demand.
Employer strategies for navigating a candidate-rich market
With a high number of candidates in the market and fewer available roles, employers are in a strong position when hiring. However, securing the right talent still requires a well-planned approach.
Here are some key areas for employers to focus on:
- Selective hiring: With an abundance of skilled candidates available, businesses can afford to be selective in their hiring processes. Taking the time to find the right cultural and technical fit is crucial. With the possibility of offshore migration, businesses need to ensure their salary packages remain competitive within both local and international markets.
- Strategic workforce planning: Rather than rushing to fill roles, companies should focus on long-term workforce planning. Identifying critical skill gaps and hiring accordingly will provide the best return on investment. Remote and hybrid work models have become standard expectations for many tech professionals. Offering flexible arrangements can be a major differentiator in talent retention.
- Re-evaluating salary expectations: While competitive salaries remain important, the employer-friendly market allows businesses to negotiate salaries more effectively. Employers should balance budget constraints with offering attractive packages that still appeal to top talent. Employees are more likely to stay with companies that invest in their professional development, so providing access to training, mentorship programmes, and career progression opportunities can be a strong retention tool.
- Retaining the best talent: Even with more candidates available, businesses should focus on employee engagement, career development, and workplace culture to ensure they retain their best performers in the long run. A positive and inclusive workplace culture is crucial for long-term employee satisfaction. Businesses should foster an environment that supports collaboration, innovation, and employee well-being.
Looking Ahead
While challenges remain, the overall sentiment within the IT job market is improving. The private sector is driving new opportunities, government hiring may soon follow, and employers are beginning to take proactive steps to secure and retain talent. For IT professionals, this means there are reasons to be optimistic about career prospects in 2025.
At Younity, we’ll continue to track these trends and provide insights into the evolving job market. Whether you’re looking for your next opportunity or seeking to attract top talent to your organisation, staying informed about market movements is key.
Watch the short recap of the quarterly update with Richard from Younity in the video above.