New Zealand HR hiring rises 4.6% as wage growth remains subdued

Hiring in New Zealand's human resources (HR) sector rose in September, but wage growth across the wider economy remained subdued, highlighting a gap between improving recruitment activity and pay gains for workers.

HR hiring increased by 4.6% in September, while wages in the sector rose 3.3% from the previous month, according to the latest report from Employment Hero. 

The accounting and legal sector recorded the same growth in hiring and wages, while employment across small and medium-sized enterprises (SMEs) also rebounded.

SME employment rose 2.0% in September compared with August and was up 4.4% from three months earlier.

Hiring rebounds across sectors

"It's been a choppy year, but with headcount climbing back to 2.0%, up from a dip of 0.7% in August, it's a good bounce back," said Neil Webster, general manager for New Zealand at Employment Hero.

The September figures point to a recovery in recruitment following a weaker month in August. However, the improvement in hiring has not translated into comparable wage growth across the economy.

Engineering hiring rose 6% in September, but median pay increased by just 0.9%, illustrating the uneven relationship between recruitment demand and employee earnings.

Webster said the gap between hiring and wages remained a concern as households continued to face cost-of-living pressures.

"What's harder to reconcile is that wages aren't following at a time when the cost of living continues to be top of mind for people. Businesses are hiring, but employees aren't yet seeing the same momentum in their pay packets," he said.

Annual wage growth remains weak

Annual wage growth reached 1.1% in September, according to Employment Hero, although casual workers recorded a stronger increase of 3.7%.

Despite the monthly improvement, Webster cautioned that the latest figure might not indicate a sustained recovery in pay growth. Annual wage growth has fallen sharply from the approximately 4% to 5% recorded in the middle of last year.

"Annual wage growth has collapsed from roughly four to five per cent mid last year to just 1.1% last month," he said.

He added that the September reading could reflect a temporary change rather than a reversal of the broader trend.

"So while September indicates some green shoots, with year-on-year growth the highest since March this year, it could just be a monthly fluctuation so only time will tell. Because currently the trend is still a downward one."

The latest findings suggest that while recruitment activity among New Zealand SMEs is recovering, sustained wage growth remains uncertain. 

For employers, the challenge will be to balance hiring needs with employee expectations around pay and the rising cost of living.