Unemployment in Aotearoa is sitting at 5.6%, its highest level in around 11 years. One in four 15 to 19-year-olds who want work can't find it. And yet, ask almost any hiring manager and you'll hear the same thing: good people are hard to find.
Both things are true. The labour market is loose at the bottom and tight at the top, and the gap between them is getting wider. Many employers are choosing to pay a premium for experienced people who can hit the ground running, rather than invest in someone they'd need to train.
In a tough year, that feels like the sensible call. We think it's one of the riskiest talent decisions a business can make right now, and here's why.
The numbers: a market with no entry ramp
While the headline labour data looks soft, look closer and the pressure is concentrated almost entirely at entry level stage.
And while overall hiring demand is recovering, with SEEK job ads up 7.8% year on year in September, much of that growth is in sectors such as mining, energy and hospitality, not the professional and office roles where graduates traditionally start.
So the recovery is arriving, just not at the bottom rung. Juniors are competing with experienced people who are also looking for work, and most employers, given the choice, are taking the experienced candidate.
Why skipping juniors feels like the safe call
Nobody is skipping junior hires out of carelessness. In a year of tight budgets and lean teams, the logic is easy to follow:
Teams have been trimmed, leaving fewer people with the capacity to train and support a junior hire. With experienced talent available, employers can often find someone with three to five years’ experience for a modest premium. Businesses are also focused on protecting the teams they already have: the EMA has pointed out that when recruitment slows, firms prioritise retaining existing staff, and young people are often the first to miss out. Meanwhile, AI is increasingly absorbing the routine, repeatable tasks that once gave juniors their first experience of work.
"Almost every hiring brief we've taken this year has asked for 'experienced' somewhere in the first line. We understand why. But when every business is chasing the same pool of people with three to five years under their belt, you're not avoiding a cost, you're just moving it." Says Daniel Percival, Head of Supply Chain, Procurement and Operations, Tribe Recruit
For any one business, it's a defensible decision. The trouble starts when a lot of businesses make the same decision at the same time.
The hidden cost: a skills gap booked for 2031
The graduate you don't hire in 2026 is the mid-level specialist you can't find in 2031. Talent pipelines don't pause and restart on demand, and if a whole cohort misses its first rung, the gap travels through the market for years.
We're already seeing the early signs. Economists note it's fairly typical at the start of a recovery for firms to find skilled labour harder to get before unemployment falls. In other words, the scramble for experienced people tends to start while the jobless numbers still look high.
"The businesses that will be in the strongest position in three to five years are the ones quietly building their bench right now. When the market turns, they won't be in a bidding war for talent, because they'll have grown it themselves. And people tend to remember who gave them their first break" says Bruce Pilbrow, CEO of Tribe Group.
In tech, the junior role isn't disappearing. It's being redesigned.
Technology is where the squeeze on entry-level roles is sharpest, and where the long-term risk is greatest. Testing, support desk and basic development work have long been the training ground for New Zealand's future engineers, architects and tech leaders. That's exactly the work AI and offshoring are now absorbing.
At the same time, demand for AI capability is climbing fast. In September, 4.2% of NZ job ads referenced AI skills, well ahead of Australia's 2.4%, and that figure rose to 18.8% of ICT ads. Job ads with high exposure to automation fell 2.6% year on year, while those with low exposure grew by double digits.
The takeaway for tech leaders is not "stop hiring juniors". It's "hire a different kind of junior". Recent research found that just 5% of organisations now see a degree as essential for entry-level roles, with employers prioritising practical, demonstrable skills instead. A graduate who can work alongside AI tools, check their output and explain the result is a very different hire from the junior tester of five years ago.
"The entry-level tech role of 2020 probably isn't coming back. But the entry-level tech role of 2027 is already here. We're talking about people who are AI-literate from day one, curious, and comfortable questioning what the tools tell them. If you don't create those roles now, you won't have the senior engineers and data leaders you need when your AI investments start to scale" says Steve Cotton, Head of Tribe Tech
What smart employers are doing instead
Building a pipeline doesn't mean launching a big graduate programme you can't afford. It means making deliberate, small bets now. Here's what we're seeing work:
Do the maths on "experienced only". Compare the premium you're paying for experience with the real cost of training someone up. Factor in how long experienced hires stay, and what it costs to replace them. The gap is often smaller than leaders assume.
Build a ratio into your workforce plan. One simple rule: for every few experienced hires, bring in one person at the start of their career. It keeps the pipeline moving without overloading your team.
Redesign entry-level roles around AI. Rather than cutting the junior role, rewrite it. Give new starters the work of checking, refining and explaining AI output, so they learn the business while adding value from week one.
Hire for capability, not credentials. Look past degrees and years of experience to the skills and attitude that actually predict success. Practical tasks and work samples will tell you more than a CV.
Use summer and temp roles as an on-ramp. Summer internships, fixed-term projects and temp roles let you test fit at lower risk. With summer around the corner, now is the time to plan them.
Pair juniors with your best people. Structured mentoring transfers knowledge before it walks out the door, and it's often a development opportunity your senior people value too.
Building tomorrow's talent, today
The recovery is coming, and when it reaches professional and tech roles, the competition for experienced people will be fierce. The businesses that come out ahead won't be the ones that waited for the market to turn. They'll be the ones that kept the bottom rung of the ladder in place.
At Tribe Group, we help organisations across Aotearoa plan for the talent they'll need, not just the vacancy in front of them. Whether you're rethinking entry-level roles, building a summer intake, or looking for AI-ready tech talent through Tribe Tech, our specialist teams can help.