Tech Shapers Hiring Predictions – September 2025

Hiring predictions: Time for Contractor or Permanent hiring?

This is Sourced’s Tech Shapers with our hiring predictions, opinions, and experience of the Tech hiring levers across New Zealand. As we hit the end of Q3 for 2025, we start to look ahead at what to expect across the remainder of the year, while reflecting on the predictions we made for this quarter, coming out of a very subdued H1 2025.

What we will cover

Reviewing the key takeaway from March 2025’s report:

With new budgets being finalised for the new financial year, we hear a lot of chatter around ‘intention’ ‘need for growth’ and ‘investment’, but we have yet to see pen on paper around actual spend. With a relentlessly sluggish economy, shrinking budgets, and reduced headcount vacancies for the year, it is hard to imagine that any rebound will be strong. Perhaps a more gradual return to normality is on the cards.

Have those intentions translated into market growth and economic optimism, or are we still hiding under the blankets of uncertainty?

This time it’s “No, and maybe!” – for the private sector at least.

The purpose of these hiring predictions is to address the questions of ‘Where have we come from?’, ‘What did we predict would happen for the tech recruitment scene?’, ‘What took place?’, and ‘What we can expect going forward?’.

As usual, there is something for everyone here so a lot to cover:

RECAP: Recruitment activity * Contract recruitment * Infrastructure & Support roles * International candidate markets * Staff retention

HOW WE SEE THINGS: * So what happened? * Employer Intentions * Contract Employment * International Talent

SUMMARY AND PREDICTION: * So how did we do? * The Market in a Nutshell

Tech jobs market recap: The past 12 months

The theme of the 12 months to April 2025 was that candidates were staying in the market longer before taking up permanent positions. Additionally, demand for contractors had softened considerably. Canterbury and Wellington were feeling the burn more than Auckland, with the majority of downsizing and redundancies in Auckland having happened by mid-2024. Permanent headcount retention was at an all-time high (when employers were not downsizing/restructuring), and international talent had been parked by most employers, citing costs, timeframes to onboard offshore candidates, and local talent availability as the key reasons.

Recruitment activity

Those who were available and willing to move roles locally were finding their opportunities limited due to a lack of internal movement or growth. As mentioned above, International candidates new to New Zealand were also finding their options extremely limited. Those out of work were finding it extremely difficult to re-enter the market, and were being forced to consider sub-optimal solutions such as out of industry work, short fixed-term contracts, very short contracts or were focused on upskilling and future proofing.

Contract recruitment

Contractors were finding fewer opportunities following the downturn, with new contracts coming to market less regularly and more highly contested. Wellington-based contractors seeking work in other regions as public sector opportunities dried up, continued to drive competition levels locally. Organisations made the most of the perceived availability of talent to stop using contractors in favour of Fixed-term engagements. This continued to drive uncertainty into the contracting market.

Business Analysts and Project Managers, typically the golden children of contracting, were finding themselves more and more on the outer, with more on the bench than seen in any other time in recent history.

Infrastructure & Support roles

As we’d seen over the past 3 years, L1-3 Service Desk and Support roles were holding centre stage in terms of any volume, however, this was also offset by a significant amount of redundancy in this area, so a roundabout of sorts as permanent employees transitioned into temporary opportunities and vice versa

International candidate markets

Unfortunately, the opportunity to migrate to NZ for a skilled Technology role was all but gone (for now) by March of this year. With unemployment at a record high, there were more candidates than there were roles across both skilled and early career areas, with little to no desire for employers to look further afield.

Working Holiday Visa candidates were supplying the mid-market well, and those fortunate enough to secure post-study work visas were about the only international candidates filling local talent pipelines.

Staff retention

For those companies not downsizing, retention was at an all-time high, while anecdotally, a lot of candidates are not fully engaged in their current employment and would like to work somewhere new. Market conditions drove a very cautious approach, with stability being cited as the key decision driver.

There was a continued and heightened sense of power shift from candidate to employer, and where candidates were opting to leave, they were rarely being counter-offered, or even more rarely, replaced.

So how did we do?

So what happened?

As mentioned in March, the full year of 2024 and into early 2025 presented severe market instability and economic uncertainty. While there is occasional chatter about a return to growth for FY26, there is little in the way of actual evidence. Punctuated by rounds of liquidations or redundancies, we were correct in predicting that a strong rebound this year was unlikely, with perhaps a more gradual return to normality, though that is far from confirmed.

While the public sector and contracting opportunities have been the heroes of local hiring, these have been very carefully considered, for short, sharp pieces of work, and with a very high expectation on value return.

Gone are the days when contractors can hop from one gig to the next, now experiencing significantly higher levels of competition, far fewer opportunities, and employers holding the upper hand in terms of demand for skill, experience, and flexibility in working arrangements.

Most employees are staying put in roles, regardless of job satisfaction, and since our last report, demand for contractors has lifted ever so slightly, but from an all-time low, as fixed-term contracting arrangements have lost favour.

Employer Intentions

6 months ago, the market was extremely sluggish, with even the contracting market dipping. The past 6 months has seen a further retraction still. The market has almost come to a standstill, with no real sign of relent as we see out the last couple of months of 2025.

Almost all of Sourced’s hiring activity has been directed towards short-term contracts (3-6 months), short fixed-term contracts (up to 12 months) and almost exclusively in the public sector. While the government has been trying its best to reinvigorate all but dead private business confidence, the public sector has kept the recruitment market afloat as it continues to chug away at longer-term programme initiatives, improvements, and focus on business improvement and efficiency gains.

Looking ahead to 2026, just as we thought for 2025 (but were incorrect), our prediction is that we will return to higher levels of hiring activity (higher than zero?), buoyed by a lift in private business confidence (we’re being extremely optimistic), driving those dissatisfied in current employment to give up the wait and jump ship. Currently, employers are not looking ahead with plans to grow, transform or innovate. There is still a much stronger sense of returning to ‘BAU done better’ and optimising. This holding pattern has been in place for over 2 years now, so at some point, something must give.

Surely.

Permanent Employment

The theme for the 12 months to March 2025 was candidates staying in the market longer before taking up permanent positions if they could be found. Unfortunately, this has continued through the year. Exacerbated by the lack of new hiring and a significant number of restructures and downsizing, it has created an even larger pool of candidates seeking employment. As we talked about in March, skills have been broad and have not been in one particular area but have still tended to be at the higher/senior end of the spectrum. Unfortunately this has been a recession that has seen no one skill area left untouched. Salary discussions are not on the table at this time.

Contract Employment

Contracting opportunities have unfortunately continued to follow the downturn with new contracts coming through sporadically. They are very highly contested from across the country with those out of work much more prepared to lower rates, consider remote, part time, or relocation. Canterbury continues to experience an influx of talent from Wellington and Auckland. This puts even more pressure on an already over-resourced contractors market. Organisations are taking advantage of the availability of talent to drop contract rates, and shorten up engagements, however much more so, are opting not to engage contractors in favour of redeploying internal resources.