Mood of the Boardroom: Boardrooms split on staff as AI reshapes workforce (NZ Herald)

Mood of the Boardroom: Boardrooms split on staff as AI reshapes workforce (NZ Herald)

New Zealand’s boardrooms are split on the outlook for projected staff numbers, with the Mood of the Boardroom survey revealing a near three-way divide over whether headcount will increase, remain steady or decrease in the year ahead.

Asked if they expect to make changes to staff numbers over the next 12 months, 30% of respondents say they anticipate increasing staff numbers, while 33% expect to cut back. A further 35% forecast no change, with the remaining 2% unsure.

The mixed sentiment underscores a business environment where leaders are juggling cost pressures, technological disruption, and the demands of growth.

One executive in the tourism industry was blunt: “We have and continue to reduce staff numbers as we take costs out.”

A logistics boss notes, “We are rolling off a period of intense capital project delivery.”

Technology is a recurring theme in workforce projection. Several CEOs pointed to automation and AI reshaping the size and shape of their workforce.

“Technology advancements could well result in fewer jobs in some areas (corporate), whereas as assets and the balance sheet grows, and there is more development and construction going on, the workforce is likely to increase,” says one experienced chairperson.

Others spoke of balancing efficiency with future capability.

“We’ll continue to adjust resources to match demand and ensure the business stays efficient — focusing on keeping essential roles while scaling back where necessary,” says Anne Gaze, of Campus Link Foundation.

Some businesses remain in contraction mode. The CEO of an engineering firm says: “Due to the industry slowdown, our business has had to make difficult decisions around staff right-sizing … Looking forward, it is more about focusing on what skills and capabilities are required in the future.”

There are also generational concerns.

“We have dropped significantly in the last two years but hope to be able to start recruiting graduates again, subject to projects progressing in the economy,” one executive in the construction sector says, warning younger staff have been “hit the hardest” as clients resist paying for inexperienced talent.

For others, their infrastructure pipeline is expected to drive demand: “The significant infrastructure development programme underway will continue to gain momentum in the year ahead and associated staffing growth will reflect that,” says Auckland Airport chief executive Carrie Hurihanganui.

Mixed opinion on access to skilled talent
Business leaders are mixed on whether attracting and retaining skilled talent has become easier or harder in the last year, but the overall sentiment leans toward it being a moderately challenging issue.

On a scale of 1 to 5, where 1 equals very difficult and 5 equals very easy, the average score was 2.95/5.

For some, access to skilled labour has eased in the past year, with a softer economy and higher unemployment increasing the pool of available candidates.

Several note they are receiving record numbers of applications, describing the current climate as an “employer’s market”.

Executive director of the Retirement Villages Association, Michelle Palmer, says: “We’ve seen a huge number of applications for roles in the past six months — unprecedented numbers — a sign of the times in the current unemployment environment.”

An education provider observes that “redundancies have released a lot of competent people into the market”, but says retaining top performers remains difficult.

Yet many stress that the challenge is far from solved, particularly in specialised fields.

Advanced technology, R&D, digital, AI, engineering, and data analytics are all cited as areas where skills are scarce.

The lure of higher wages in Australia and beyond features prominently, with multiple executives highlighting a “flight to Australia” across professions including law, health, and infrastructure.

One leader describes it as “alarming”, while another says young lawyers are now departing earlier in their careers than ever before.

Cordis managing director Craig Bonnor adds that “talent retention of Kiwis in the early to mid-career phase is the most challenging”.

At the same time, pressure is coming from within New Zealand. Downer NZ chief executive Murray Robertson warns that “the entry of international firms into the New Zealand market for major projects is placing additional pressure on local businesses to retain key talent.”
Pipeline certainty in infrastructure also looms large. An engineering leader cautions that “without certainty in the pipeline, we won’t attract the skilled workforce required”.

Regional differences are also apparent. Institute of Directors CEO Kirsten (KP) Patterson says Wellington is increasingly at risk of losing its brightest talent, “as they are losing confidence that they can successfully raise careers and families in a vibrant capital city”.

Immigration settings drew mixed views. Some report improvements under the current government, making it easier to recruit nurses and caregivers, while others say changes had done little to ease shortages in critical, high-demand sectors.

As one technology leader puts it: “For AI skills, things are very, very difficult. But for other roles, it is typically not a concern.”

While New Zealand’s lifestyle and reputation for innovation continue to draw talent, executives stress that retention depends on competitive pay, career development, and building purpose-driven organisations.

As Harcourts managing director Bryan Thomson sums up: “The business world relies on talent acquisition and retention.

“Now as always, this is the number one challenge for every leader.”