Departing institutional knowledge, middling pay expectations and brighter opportunities overseas have been blamed for New Zealand’s ongoing productivity crisis.
The findings of the latest Robert Walters 2025 Salary Survey show 67% of employees are planning moves, with 43% citing higher salaries as the central reason.
Of those planning to move, 42% are planning to move across the Tasman. As for Australians wanting to move here, that figure is a minuscule 2%.
Robert Walters Australia and New Zealand chief executive Shay Peters argued it was because “New Zealand has become, concerningly for me, un-aspirational”.
“I look at Australia, despite Australia going through economic challenges of their own, obviously the resources market is taking a bit of a hit at the moment, but the general feel on the ground in Australia is more aspirational, and that’s something that we have to capture again in New Zealand and find a way to be able to do that.”
As for the top reasons for moving jobs, a lack of opportunities for career progression (22%) and poor leadership (13%) stood out.
According to the survey, salaries were also key, with 62% of New Zealand businesses likely to provide salary increases in 2025, dropping significantly compared to the previous few years.
Conversely, just 57% of employees are expecting to receive a pay rise as expectations decline in light of the lack of job security in a weaker job market.
Peters believed the findings reflect a pragmatic view of the labour market, as employees and employers recognise the cost of living and doing business.
“One of the other key takeaways is that we know if we need to turn things around, productivity is going to be a key focus.
“New Zealand has to retain its talent in order to be able to do this, and that is my single largest concern from that survey was the amount of New Zealanders willing to move offshore, and most particularly to Australia, because what that illustrates is they’re not necessarily looking to go on an OE and return.”
Peters believes that aside from the lifestyle on offer, there is not much from an economic or career prospective to attract people to the New Zealand market.
In the tech and legal industries, 54% of employees don’t think they are being paid enough for the job they do.
Meanwhile, roughly 70% of employers in those industries are expecting their staff to relocate in the next 12 months.
Rosamund More, senior manager for legal at Robert Walters, said the big issue in New Zealand is the increased difficulty of sponsoring international lawyers.
“We’re hearing that more firms are taking nine months to a year to actually get lawyers on the ground if they want to sponsor them from overseas. That’s just not feasible for law firms to wait that long,” More said.
She also warned about the impact of artificial intelligence on the industry, making the prediction legal support and secretaries will probably be a thing of the past in the next couple of years.
Sixty-one per cent of employees in all industries surveyed said they could be concerned in the future if artificial intelligence keeps advancing.
Cameron Bagrie of Bagrie Economics said the current business cycle was different from previous years, with the share of GDP going to employees expanding as operating surpluses shrank.
“This is a real downturn, and what you’ve only now started to see ... is that firms have started to aggressively cut costs.
“If you strip out the Magnificent Seven, it’s been amazing to see the underperformance of the New Zealand equity market compared to global peers. One of the reasons is that they just didn’t respond to the economic signals soon enough.”
Bagrie believed New Zealand’s number one issue was not unemployment, as many other economists thought, but division, citing it as a global phenomenon and pointing to social fragmentation seen in the United States, the UK and Canada.
But his other main concern was productivity. According to Bagrie, New Zealand’s productivity growth used to be 1.4% a year, but for the past decade, averaged 0.2%.
“It means if productivity is basically zippo, your wages only move up in line with inflation. Which gives you one hell of an economic incentive to go apply your trade overseas.
“The issue is not whether we’re coming out of recession.
“The issue is what’s going to be the quality of it on the other side. It’s not going to be high quality if it’s an interest rate stimulated upturn that we drive, that just encourages New Zealand to do what we always do, sell more expensive houses to each other.”
Bagrie said there must be a greater focus on education, arguing educational attainment levels were one of the best indicators of where the country will be in the next few decades.
He was also fiercely critical of New Zealand’s capital productivity, or how we use and manage machinery, buildings and roads, which he said had been mismanaged for the past 30 years.
Robert Walters commercial director for New Zealand and former Labour Cabinet Minister Stuart Nash said there were three levers the Government could use to influence or drive productivity; the labour market, fiscal tax and monetary policy.
He believed in using tools such as accelerated depreciation, an area where New Zealand is an outlier compared to other OECD nations.
Nash also acknowledged the need for immigration reform, saying consecutive Governments had taken an idealistic view of the world, rather than confronting the pragmatic reality.
“What we really need to do with that geographic advantage is push forward an aspirational vision for people who are out there.”
He also directed criticism to the leadership of professional associations.
“With all due respect to my demographic, they are run by old white guys who want to protect the status quo, which is no longer applicable or realistic in the 21st century.”
Peters said to retain talent and institutional knowledge in New Zealand, employers must be more creative with their workplace incentives and offer other motivators outside core dollars.
This could be in the form of flexible or hybrid working arrangements, with 54% of employees preferring a combination.
Peters said the statistic surprised him, and said it might reflect the demographics represented in the survey in which 74% were in the mid-senior and manager experience levels.
Ultimately, he said “disruption” was needed for New Zealand’s culture and economy.
“We can’t be protectionists. We’ve got to start challenging people again right from the outset through education, through sports. That has been how we’ve learned resilience in New Zealand society before.
“We’ve taken those barriers away to allow people a very easy lifestyle and we are now seeing the repercussions of that.”
Robert Walters surveyed 7759 respondents (3136 from New Zealand and 4623 in Australia) across 12 sectors, with respondents ranging in role from entry level/graduate to executive/c-suite.
Tom Raynel is a multimedia business journalist for the Herald, covering small business and retail.
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