Hiring predictions, Round 1 for 2024.

This is Sourced’s Tech Shapers with our hiring predictions, opinions, and experience of the Tech hiring levers across New Zealand. We have dragged this one a little later into the year to see if time creates some clarity in our foggy crystal ball, it has been a slow start and the holding patterns from last year linger. Are we still hiding under the rug when it comes to hiring?

The cat is hiding from hiring predictions too!

The cat is hiding from hiring decisions too!

What we will cover

Asking Sept 2023’s opening question again: “Is the recession hitting (still), has the hiring intensity of 2022 finally softened, and is it an ‘employers market’ right now?

This time it’s “Yes, yes, and yes!”

As mentioned in September, candidates are staying in the market longer before taking up permanent positions. In addition, demand for contractors has also softened moderately, with a mix of public sector casualties, and employers making the most of more readily available permanent resources to release contractors in favour of Fixed Term contract options.

International talent remains readily accessible, giving clients a heightened sense of confidence around their talent attraction, however, some key talent areas remain in high demand and hard to find.

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

Recruitment activity * Contract recruitment * Infrastructure & Support roles * International candidate markets * Staff retention * So what’s next? * Employer Intentions * Going remote * Salary levels * Contracting * So how did we do? * The Market in a Nutshell

What is Tech Shapers about? Hiring Predictions and based on market conditions.

Recruitment activity

While in the 6 months to March 2023, the red-hot tech job market was starting to cool, by September it was best described as ‘in decline’, and over the past 6 months, hiring activity, particularly on the permanent front, has well and truly fizzled. This was certainly to be expected, given an unprecedented post-Covid recruitment drive, and we see ourselves now in the middle of a ‘rebalance’.

With mortgage interest rates on the rise, cost of living increases and company restructuring/right sizing being a common occurrence, particularly around the use of contract resources, permanent and contract candidates are keeping their heads down and opting for stability in favour of seeking career progression or better work/salary conditions.

Those who are available and willing to move locally now find their opportunities limited unless working in highly specialist areas with only Modern Desktop/M365 and Infrastructure currently bucking the trend. International candidates new to New Zealand are finding their options a lot more limited than they would have seen over the past 12 months, and in some cases have been unable to establish themselves locally, choosing to return home.

Despite budgets now being in place for the new financial year, lower levels of business confidence, and a sluggish economy have seen these budgets shrink for FY24, reducing headcount vacancies for the year ahead, and becoming more reliant on permanent and fixed-term options.

Canterbury* and Wellington appear to have been hit harder than Auckland, with the majority of downsizing and redundancies in Auckland having happened by mid-year 2023.

*RCSA’s latest Jobs Report cites a nearly 26% reduction across the board in Canterbury alone

Contract recruitment

Contracting opportunities have unfortunately followed the downturn with new contracts coming to market in far less regularity, and now highly contested. For the first time in many years, Canterbury and Auckland are also seeing an influx of Wellington-based contractors seeking work in other regions as public sector opportunities dry up. Organisations are taking advantage of the perceived availability of talent to drop contractors in favour of Fixed-term engagements, and this again is continuing to drive uncertainty into the contracting market.

Business Analysts and Project Managers, typically the most sought-after contract resources, are now available in greater volume with contracting opportunities at the Senior PM/Programme Level very limited. Contracting demand, where it does exist tends to sit at the low levels across Support, Infrastructure Deployment and Level 1-2 support.

Infrastructure & Support roles

A continuation of late 2022-2023, L1-3 Service Desk and Support roles have continued to hold centre stage in terms of demand, offering excellent growth opportunities for candidates in the early years of their careers. These are roles that have typically been difficult to fill, however, have benefited from more readily available migrant candidate markets, and those recently affected by business restructuring, who are prepared to take a career step back for shorter-term employment engagements.

While previously this demand had been to manage periods of new systems being deployed, cloud migrations, and change programmes, they now transition towards BAU support, where clients are not ready to commit to permanent employment, but are willing to make use of available skills to bolster their internal team efforts.

International candidate markets

The majority of our larger client employers have now gained Accredited Employer Status however are now more reluctant to reach out to document-ready candidates looking to relocate to New Zealand, in favour of available local resources. We are continuing to see an influx of returning candidates who have lived and worked in NZ pre-Covid, particularly at the senior and executive end of the market. This is offering a real depth of experience to local employers, as well as young families looking to relocate from the North to South Islands in search of better cost of living/housing opportunities.

Working Holiday Visa candidates are supplying the mid-market well – on a contract basis, however with their opportunities for permanent employment diminished, are tending to sit in lower level roles such as support mentioned above, and with greater gaps between contracts.

Staff retention

Retention remains at an all-time high and we don’t see this changing throughout the year. We are in the mid-term of the ‘great roundabout of candidates moving’ batch from 2022, and retention levels are only currently dropping at the behest of employers looking to right-size their headcount, driving better efficiency through their business.

There is a heightened sense of a power shift from candidate to employer, and where candidates are opting to leave, often they are not being counter-offered, and occasionally not replaced, with employers taking the opportunity to reorganise their teams and redeploy vacancies to other areas (see Quiet Hiring here). Those who are entering the market, or are opting to move, are being very selective, seeking stability and certainly being less demanding in their negotiations of salary.


So what’s next?

While 6 months ago permanent recruitment was continuing at pace, with international/migrant candidates being recruited in greater numbers, this led to a softening, or at least a levelling, in salary levels and more selective decisions around hiring on the back of a perceived greater availability of talent. Employers were proceeding with slightly more caution to ensure they were successful in securing precisely what they wanted. This is likely to continue through the year, with employers tapping into their professional networks, and picking up top talent affected by restructuring and reorganisation.

Expats making the return home are finding their options are now a lot more limited with fewer contracting pieces of work available where their skill sets may have previously been utilised, and their general skill sets being viewed as ‘too big’ for permanent opportunities. We expect they will start to look at remote opportunities, or even consider the timing for their relocation as market conditions remain soft.

Employer Intentions

Six months ago the foot hadn’t fully come off the accelerator with a number of significant transformation programmes underway, with clients moving into cloud environments, reorganising and reimagining their ways of working. This year has seen a considerable slowdown in this work, or at least a slow in growth around the addition of resources. Clients are choosing instead to reduce budgets and continue with the work in a more contained fashion. With FY24 budgets now in place, many will be looking at how to get the most bang-for-buck from their reduced budgets, and contractors will almost certainly be affected by this.

Going remote

We have previously been talking about the new ‘norm’ of remote work which has settled on around the 2-3 days in or out level, keeping teams connected both within their teams and with their stakeholders. We are now seeing more and more reluctance to consider fully remote, or FIFO candidates as local talent pools remain strong, and costs for commuting candidates come into play.

For almost all vacancies now, the candidate is required to base full time from their centre of work, and we see this continuing throughout the remainder of the year.

We still feel that 100% remote working will never (can we say never?) be the majority as we see clients realise that highly productive, highly engaged teams that come together are still at the centre of better outcomes.

Salary levels

Despite softening market conditions in both the permanent and contracting markets, we have not seen a signficant amount of softening around hourly or annual salary rates, and we despite popular consensus, do not expect this to change considerably. While 2022-23 saw salaries rise sharply, this was also a rebalance after salaries flattened/dropped during the Covid-19 pandemic and very much reflect the new ‘norm’. While candidates are not negotiating as strongly around salary and are preferring to prioritise stability and career development opportunities, their salary expectations remain constant with little to no drop back. We are not expecting to see any considerable retraction of salaries across 2024.


As we’ve discussed in some detail, it’s a tough time right now to be a contractor not in work. Sourced hosts a considerable stable of contractors, and fortunately, the majority remain in long-term engagements that are rolled over in line with key projects they are assigned to, however breaking into new opportunities remains a challenge.

While a high number of contractors have recently entered the market due to public sector contraction and a move to FTC engagements, we expect that over the next 6 months, demand will bounce back. When businesses cautiously look ahead to growth or investment, the contracting market is always the first point of call, able to deliver immediate impact with a lower level of commitment. Watch this space.

So how did we do?

In the last Tech Shapers report we noted the following as the ‘things to watch’:


Restructuring and reorganisations continue with highly skilled talent moving into the market

This has very much come to fruition with Wellington and Canterbury following Auckland’s lead with several restructuring and reorganisation activities to realign business needs with resources.


Permanent recruitment to remain low

Again, this has very much eventuated. In line with higher than average staff retention rates, and a subdued economy, there has been a very heavy focus on ‘doing more with less’ and this has been reflected through a reluctance to increase headcount unless absolutely necessary.


Demand for contracting resources to remain strong

Unfortunately we were incorrect with this assumption. A typically very buoyant market, Wellington in particular, both Auckland and Wellington have experienced a considerable softening of demand for contract resources.


Restructured permanent candidates making a move to contracting

Unfortunately no. As above, with a very soft contract market currently, those restructured out have been more willing to compromise on their career aspirations, prioritising stability and longevity in roles they look to move into.


Staff retention to remain high as permanent staff recognise market softening

Now is not the time to be moving jobs if your position is solid and stable; this is well recognised across the country. With mortgage rates sitting where they are and the cost of living not improving, there is a very high level of conservatism from candidates and a reluctance to make any significant job changes this year.

The Market in a Nutshell

So, to summarise the state of the current market, this is where we are:

Hiring Trends in March 2024 - Technology across New Zealand

Three things we are watching in 2024 - Hiring Trends


As further developments unfold, we will continue to watch the tech market and share more about how it’s shaping up. Keep an eye out for our next update to learn more about the challenges and opportunities of the current landscape, and feel free to get in touch to discuss any of these insights further.

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