As another year begins, the Herald looks at what workplace trends are likely to emerge in 2024 and how the economic landscape could play a role in the working environment.
Rising unemployment will hit the workforce in 2024 as the country stares down a recession.
The unemployment rate (currently 3.9 per cent) is on track to hit 5 per cent by the end of 2024 – its highest level since mid-2021 – as the Reserve Bank continues its engineered economic slowdown in the fight against inflation.
The Covid jobs boom that once led to terms like The Great Resignation is well and truly in our rearview mirror.
“The worst thing is, we’re only in that mid-tide, the tide is changing, it’ll get worse in three to six months’ time,” said Jarrod Haar, Professor of Management at Massey University.
“I remember saying: if you are thinking of changing jobs, enjoy it while it lasts, because we know these things are cyclical and it will never last. And unfortunately, we are right there, or on that precipice.”
More candidates in a cooling job market inevitably means less bargaining power for jobseekers.
“Last year you could demand, this year you might ask for it nicely,” Haar said.
“I heard stories of engineer graduates kind of swaying around going, ‘I need $80,000 to start’ …. They’ll just be told, ‘We’re paying $65,000 because that’s the market rate’.
“Then you will be just saying, ‘Yep I’ll take a job because I think I’m safer with you, if I’m getting more money great, but I won’t be getting a 20 per cent pay rise’.”
For organisations downsizing, Haar said ensuring there is good communication on the reason for any cutbacks will be vital.
“Downsizing that is ‘salami cuts’, i.e. multiple small cuts, is not the way to go. Employees on edge about their jobs are much more likely to jump and not perform anyway,” he said.
The new National Government has also promised to reduce the public service headcount.
Jason Ennor, chief executive of human resources platform MyHR, said: “If the new Government proceeds with the job cuts they’ve signalled, there will be a wave of professional candidates hitting the market.”
“This will happen at a time when the job market has been cooling, so in professional services we might see greater competition for jobs and a swing in the employer’s favour,” Ennor said.
Fuelled by the Covid-19 pandemic, working from home and other hybrid options have become a mainstay in the workforce, popular among workers who are looking to find better work-life balance, cut back on commuting time and save money.
And while some businesses may be pushing back more on how many days their staff are out of the office, the good news for some is that it seems the trend here in New Zealand is going up.
Haar said he was in the process of collecting New Zealand data on working from home.
“If anything, the working from home might have gone up a bit rather than go down,” he said.
Haar said he thought that was fascinating.
“We’re having a big increase in that hybrid working.”
He said working from home was a little like the “non-financial pay rise”.
That might be the trade-off of not getting a pay rise or one that wasn’t in line with inflation, he said.
“There’s still a bit of a win-win for both parties.
“And maybe we’re seeing a little bit more of the pendulum swing slightly the other way to a bit more hybrid work … which is different - I thought it might have stayed the same.”
However, Haar said he was seeing that New Zealand organisations were still resistant to changes such as a four-day work week.
“I do fear that the real reason is [lack of] trust,” he said.
“I’d almost suggest for those companies, don’t do the four-day week, but you need to do something about the way you or your leaders trust workers.”
Haar said it was about trying to motivate people with a focus on productivity.
“I did the data for that and that’s what the data showed. People were motivated to do their work in a shorter period of time because they got their own benefit out of it.
“That four-day work week … the good thing is it doesn’t really need to be everybody having Friday off, maybe it’s just an afternoon off.”
Summertime hours wouldn’t go astray, Haar said.
“It’s just trying to acknowledge we are a summertime Christmas country,” he said.
“Maybe it lasts for summer, maybe it works so well it lasts forever.”
Artificial Intelligence (AI) will play a greater role in the workplace in the coming year, particularly in professional jobs, Haar said.
“I do think we will see more and more [of AI] … hopefully enhancing existing work, not taking it away from employees.”
“Unfortunately, there will be winners and losers.”
However, Haar said AI was only going to take us so far.
“I think AI’s going to help people go ‘A, B, C, oh I’ve got to D. I only got to C usually at this time’,” he said.
He said the implications of AI taking lots of workers’ jobs, in a worst-case scenario, could be disastrous for society.
“Fundamentally we need workers to be productive, to earn money, to pay tax, to buy groceries, to pay rent.
“Let’s say we lost 5 per cent of the workforce to AI, so we went from 3.5 per cent [unemployment rate] to 8.5 per cent, the Government’s coffers are plummeting, but the cost is going up.
“But I do think we probably need to embrace [AI] as much as we can to help get the best out of what we do in our jobs.”
Haar said there would be a greater focus on well-being, “especially job burnout, which remains at stubbornly high levels”.
This extended to leaders too, he said. “Leaders need support too. So, a renewed focus on leader well-being and giving them as much support as we can. They are the people actualising all the above, and they are hurting still.”
Also, employee experience, both as a way to enhance staff outcomes (retention, performance, happiness) but also make restructuring decisions more human and kind, Haar said.
“My New Zealand data does say probably a quarter of New Zealand workplaces are really great places to work, do a good job of supporting workers,” Haar said.
“I still think we’ve got a long way to go to improve our workplaces … even just reasonably good workplaces to work, we’ve still got a big chunk there who probably are a bit average, good on some things and probably quite poor on others. And then we’ve probably got that bottom quarter who are terrible places to work really.”
MyHR’s Ennor said the office was coming back into fashion. “I have noticed more companies pushing for a return, certainly in Australia, and increasing numbers of people wanting human interaction,” he said.
“[But] an increased appetite for human-on-human interaction is unlikely to wipe out candidate expectations for flexibility,” he added.
Ennor said the extension of 90-day trial periods beyond small businesses, which was confirmed by the National Government in December, “is supposed to encourage employers to take a chance on people, but some data from Treasury suggested this didn’t happen, so it’s hard to say if there will be any impact with the reintroduction of trial periods for all employers.”
Cameron Smith is an Auckland-based journalist with the Herald business team. He joined the Herald in 2015 and has covered business and sports.
Data shows we're joining the workforce earlier and continuing to work later in life.