Across Australia and New Zealand, HR teams are entering a market that looks more stable on the surface, but remains difficult underneath. Hiring activity has become more measured, turnover has started to settle, and many businesses are taking a practical approach to workforce planning. Yet this does not mean the pressure has disappeared. In both markets, HR teams are being asked to manage evolving employee expectations, support business change, keep up with compliance demands, and help organisations do more with limited resources.
The comparison between Australia and New Zealand is especially useful because both countries are facing similar challenges, but at different levels of intensity. Australia’s labour market has softened, with job ads down 11% and applications up 22%. New Zealand has experienced a sharper decline in job advertising, down 27%, with applications up 20%. This points to a more competitive candidate market across both countries, but with New Zealand facing a stronger contraction in advertised opportunities.
For HR leaders, the real issue is not only whether hiring is up or down. It is how businesses build productive, engaged and resilient teams while employees remain cautious about change. Job security, flexibility, leadership quality and career development continue to influence whether people stay, move or quietly disengage. At the same time, employers are balancing cost control with the need to retain experienced talent.
“Stability is job hugging masquerading as stability.”
On a recent Australia and New Zealand Market Update, Host Liz Punshon, Victoria Managing Director at people2people, was joined by Guest Josh Campbell, VP and Head of HR at Tritium, to discuss how the HR market is shifting across both countries and what employers should be watching as they move through 2026.
One of the strongest themes from the discussion was the idea that stability can be misleading. In Australia, Josh noted that while hiring demand has not increased and workforce growth remains flat, businesses are still expecting the same level of output they were achieving during stronger hiring periods. This creates a stretched environment, where people may be staying in their roles, but not necessarily because they are engaged or confident. Instead, uncertainty can cause employees to stay put, making retention figures look healthier than they really are.
This is relevant for New Zealand too, where a larger fall in job ads suggests employees may also be more cautious about moving. With fewer advertised opportunities, many professionals may choose security over change. For HR teams, this means retention strategies cannot rely only on low turnover. A quieter workforce is not always a satisfied one. Engagement, wellbeing, workload and leadership trust need to be measured more carefully.
Another key comparison is hiring confidence. Australia’s hiring confidence sits at 63%, while New Zealand’s sits at 60%. The gap is not large, but the direction of change matters. New Zealand’s hiring confidence has fallen more sharply year on year, reflecting a more cautious market. For HR teams in New Zealand, this may mean a stronger focus on workforce planning, internal mobility and retaining core capability. In Australia, employers may have slightly more confidence, but they are still navigating cost pressure, productivity challenges and compliance complexity.
The role of HR is also changing in both markets. Josh explained that HR professionals are becoming more commercial in their approach. Rather than focusing only on leadership coaching, engagement and traditional business partnering, HR is increasingly expected to help businesses improve productivity. That means better job design, faster response to compliance matters, and a clearer understanding of how technology is changing the work people do.
This shift is especially important when HR teams themselves are under pressure. In the discussion, the point was made that many HR teams are being asked to do more with the same or even fewer resources. The capability that will set strong HR teams apart is what Josh described as “force multiplying”, using technology, automation and smarter systems to increase impact without simply adding headcount.
AI is central to this change, but both Australia and New Zealand need to move beyond surface-level adoption. Turning on a tool such as Microsoft Copilot is not the same as transforming a function. For HR teams, the real opportunity is using AI and automation to reduce repetitive administration, improve workforce insights, support talent acquisition, streamline onboarding and strengthen employee experience. The risk is that businesses talk about AI without redesigning roles, processes or expectations around it.
Compliance is another area where Australia and New Zealand will need to stay alert, although the details differ by jurisdiction. In Australia, Josh pointed to a heavy legislative and compliance year ahead, including changes around annualised modern award matters and work-from-home policy developments in Victoria. For organisations operating across both countries, this highlights the need for localised HR advice rather than a one-size-fits-all approach.
While the two markets differ in scale and pace, the broader lesson is the same: HR is being pulled deeper into business strategy. In Australia, the focus may be on managing productivity, retention risk and compliance while hiring confidence remains relatively firmer. In New Zealand, the sharper drop in job advertising may place greater emphasis on stability, workforce planning and internal capability. Across both, employee experience and leadership development remain central.
The next phase for HR will require a more balanced approach. Employers need to move quickly enough to adapt, but carefully enough to keep people engaged. They need to embrace AI and automation, but not lose the human judgement that makes HR effective. Most importantly, they need to look beyond headline stability and ask whether their people are truly engaged, supported and equipped for what comes next.
How can HR teams in Australia and New Zealand prepare for the year ahead?
- Treat low turnover carefully. Employees staying in their roles may reflect caution, not long-term engagement.
- Compare workload against productivity. If headcount is flat but expectations are rising, burnout and disengagement may follow.
- Strengthen leadership capability. Managers will play a critical role in keeping teams engaged through uncertainty.
- Use AI as a true productivity tool. Focus on workflow redesign, automation and better decision-making, not just software adoption.
- Localise compliance planning. Australia and New Zealand share similar workforce pressures, but legal and policy requirements differ.
- Revisit employee experience. Flexibility, wellbeing, development and trust remain essential to retaining talent across both markets.
