After an extended downturn that tested the resilience of New Zealand’s IT sector, the market is showing unmistakable signs of renewed momentum.
In our latest IT Jobs Market Update our Managing Director, Richard Vaughan, reports a significant uplift in hiring activity, with one striking statistic capturing the shift: our open IT roles are up 80 per cent year-on-year in January 2026.
We’ve definitely seen an upturn in public sector which has been really positive,” Richard notes. “They seem to be busy. They’re hiring and we’re recruiting for them.”
Breaking the Seasonal Pattern
This year’s market recovery defied traditional expectations in a telling way. Typically, New Zealand’s recruitment sector experiences a predictable slowdown through December and January as organisations wind down for the holidays, with activity resuming after Waitangi weekend.
Activity remained robust through December, maintaining momentum that typically wanes during the holiday period. More significantly, January 2026 started strong, an unusual departure from the gradual ramp-up that normally characterises the post-holiday period.
“Activity was really at a high going into December and carried on right through until we actually broke for the holidays. That momentum continued and January 2026 started really strong.”
Where the Growth Is Happening
The 80 per cent year-on-year increase in open positions has been predominantly driven by business transformation roles, including:
- Business analysis
- Project management
- Delivery-focused positions
However, demand remains healthy across other critical IT disciplines:
- Software development
- Data engineering and analytics
- Cloud computing
- Cybersecurity
Notably, both public and private sector organisations are contributing to this growth, with activity spanning enterprise-level organisations and SMEs alike.
The Recovery Pattern: Lessons from the GFC
Drawing parallels to the Global Financial Crisis of 15 years ago, Richard observes important similarities in recovery patterns. Following the GFC, the market experienced single-digit steady growth over approximately 18 to 24 months, a measured, sustainable trajectory rather than a dramatic rebound.
“Cycles tend to have a habit of repeating themselves,” Richard explains. “I wouldn’t necessarily say we’re in the recovery period yet, but I don’t really see this as being any different.”
One critical distinction sets this downturn apart: duration. This particular recession has persisted considerably longer than previous cycles, creating unique challenges for both employers and jobseekers.
Permanent vs Contract: A Shifting Landscape
While there is still a trend of permanent roles coming out to the market, a notable shift is emerging. Contract opportunities are increasing across both public and private sectors, a pattern that mirrors the post-GFC recovery period.
This uptick in contract hiring may signal organisations’ cautious approach to expansion, preferring the flexibility of contract resources as they navigate uncertain economic conditions.
Skills shortage conundrum
Despite significant redundancies throughout the downturn, finding quality candidates remains challenging in certain sectors. The expected influx of available talent hasn’t fully materialized, and the reason is clear: migration.
New Zealand has lost a significant number of IT professionals during this cycle, with many departing for overseas opportunities. However, global migration patterns are shifting in unexpected ways.
The changing migration landscape:
- Migration to Australia has decreased over the past 12 months
- UK and US migration have similarly declined
- Canada is the only traditional destination bucking the trend, though facing significant infrastructure and services challenges
“We thought that given the redundancies we’ve experienced in this cycle that there would be more available talent,” Richard notes, “but we’ve also noted that we’ve seen a lot of people leave the country. Feedback I’m getting from the teams is that it’s still difficult to find good people in certain sectors.”
This talent shortage in key areas may actually accelerate hiring timelines and increase competition for skilled professionals as the market continues to recover.
2026 General Election
While optimism is building, Richard identifies potential headwinds that could temper the recovery momentum. The upcoming election later in 2026 represents a familiar pattern for public sector hiring.
Traditionally, public sector organisations pull back on recruitment towards their June-July year-end as they enter the election cycle. Given that public sector has been a significant driver of recent growth, any slowdown in this area could have measurable impact on overall market activity.
“I can’t see this being any different,” Richard observes. “What effect that has, we’re just going to have to wait and see.”
The AI Paradox: From Fear to Adoption
Younity’s annual IT sector survey reveals a fascinating shift in what’s keeping IT professionals awake at night. Last year, job security dominated concerns. This year, technology advancement, specifically AI, has taken centre stage.
Richard describes this as ”the AI paradox”: initial fear towards AI was high and job security concerns were at an all-time low. This anxiety has effectively replaced the workload stress that characterised the previous year.
Yet the survey data reveals surprisingly high uptake and implementation of AI tools within New Zealand workplaces.
“We think the companies that will win here are those that adopt and use this new technology to enable their teams to work in more value-add spaces.”
The Long-Term AI Impact
While media coverage has focussed heavily on job losses through AI, Richard maintains we’re still in the early stages of understanding the true impact. He references the World Economic Forum’s 2025 jobs report, which projects that by 2030:
- The world will lose approximately 78 million roles
- AI will create approximately 130 million new roles
- Net result: significant job creation, not destruction
“The market’s changing, job titles will change, responsibilities will change, but whether there will be a net gain of unemployment is yet to be determined,” Richard explains.
His perspective is pragmatic: AI represents another major technology shift, no different in principle from previous transformations. The key is embracing it strategically.
Richard’s advice for organisations:
- Be clear on what processes you’re trying to fix or improve
- Use AI to enable teams to focus on higher-value work
- Approach implementation thoughtfully, not reactively
At Younity, AI adoption hasn’t resulted in job losses, instead, team members have been freed to focus on more value-add activities, a pattern Richard expects to see replicated across forward-thinking organisations.
Looking Ahead: Cautious Optimism
As a recruitment firm operating at what Richard calls “the pointy end of the economic barometer,” hiring intentions provide a reliable indicator of organisational confidence and economic direction.
The outlook is unequivocally more positive than any point in the past 24 months.
However, Richard acknowledges the ongoing challenges: a significant number of IT professionals remain out of work after extended periods of unemployment. While the situation is improving, recovery remains uneven.
“I think you’ll all join me and bid farewell to 2025 says Richard. Now, we look forward to 2026, and there’s some definite renewed optimism in the market.”
What This Means for You
For IT professionals:
- The market is opening up, particularly in business transformation, project management, and business analysis
- Competition for roles remains real, but opportunities are increasing
- Upskilling in AI and emerging technologies will differentiate candidates
- Both permanent and contract opportunities are expanding
For hiring managers:
- Quality talent remains difficult to secure in certain sectors, move decisively when you find the right candidate
- Consider how AI tools can augment your team’s capabilities rather than replace headcount
- Prepare for potential election-related slowdowns in public sector activity mid-year
- Contract hiring offers flexibility during this transitional period
For everyone:
The extended downturn is easing. While recovery may follow the measured, single-digit growth pattern of previous cycles, the direction of travel is clear. Organisations are hiring again, confidence is building, and New Zealand’s IT sector is emerging from one of its longest contractions.
Things are looking up. At last.