• Unemployment rose and wage increases slowed in 2024, with uneven impacts across sectors.
• Healthcare and social assistance saw the highest pay rise at 7.9%, followed by forestry and mining at 6.2%.
• Accommodation and food services had the smallest increase at 1.2%, but wages rose 39% since 2019.

Last year was a tough one for the labour market, as unemployment rose and wage increases slowed.

But the impact was not spread evenly, and some sectors did much better than others when it came to what they were paid.

Infometrics chief executive Brad Olsen looked at recent data to determine where the biggest and smallest increases were in 2024.

He said healthcare and social assistance were at the top of the increases, with their pay up 7.9% in 2024.

“Higher pay rates for the broader health workforce show through in the numbers. Education was up there too, rising 5.7% for the third-largest increase,” he said.

“Both of these sectors have seen larger increases due to recent pay agreements in the last two years now coming into action, plus the continued demand for these services.”

healthcare and social assistance was at the top of the increases, with their pay up 7.9% in 2024. Photo / 123RF

Forestry and mining had the second-largest pay increases last year, at 6.2%, he said.

“This industry group is a small one, and part of the reason for the larger percentage increase may have been that lower-earning roles in forestry were lost over the last year Olsen we know there have been job losses in forestry – because of lower commodity prices and weaker export potential.”

But accommodation and food services workers had the smallest pay rises in 2024, up 1.2%.

“Hospitality and the wider tourism sector saw weaker demand in 2024, and more job losses and business closures, among weaker spending which limited demand for talent in this industry,” Olsen said.

“As a result, with more people looking for jobs in this area but fewer jobs going, there wasn’t a lot of pressure for wages to increase. The smaller minimum wage increase also would have factored into less of an increase in 2024, as this sector often has a number of minimum wage workers, and the minimum wage can influence the average wage here a lot more.”

Accommodation and food services workers had the smallest pay rises in 2024, up 1.2%. Photo / 123RF

While 2024 might not have been a good one for workers in that sector in terms of pay, accommodation and food services had the biggest increase compared to 2019, he said.

“Pay rates for accommodation and food services have increased 39% from 2019 levels, driven by the large cumulative increases in the minimum wage over that period.”

Professional services had the second-smallest increase in pay in 2024, up 1.7%.

“Professional services have also lost jobs throughout 2024, and in particular the cutback in contractor and consulting spend from government, limited the amount of work available in this industry,” Olsen said.

“Professional services is also coming off a high base, and higher recent wage growth. Wage growth in professional services peaked at 10.1% pa in September 2022.”

Professional services, which had the second-smallest increase in pay in 2024, have also lost jobs throughout the year, "and in particular the cutback in contractor and consulting spend from government limited the amount of work available in this industry,” says Brad Olsen. Photo / 123RF

Manufacturing was third-lowest in 2024, up 2.1%.

A lot of sectors were still in a hiring freeze so there was little pay movement so far this year, Fortitude group managing director Hayley Pickard said.

It was unlikely that would change through the first quarter, she said.

“When the next tax year starts we will start to see an uplift. There has been some uptake in job ads but not many, and speaking to clients they are only replacing anyone who has left or leaving at present.”

In 2024, the Government sector "saw stagnant pay because of job cuts, cost-cutting measures, and ongoing mandates,” says Robert Walters. Photo / Mark Mitchell

Recruitment firm Robert Walters said its survey showed 62% of businesses were likely to get a salary increase this year and 57% of employees were expecting one.

“Over the past year, there have been certain industry sectors that have experienced minimal pay growth. The Government sector, for example, saw stagnant pay because of job cuts, cost-cutting measures, and ongoing mandates,” Robert Walters Auckland senior director Oli Sanford-Scutt said.

“Similarly, the construction, property, and media sectors have faced stagnant salaries. Professional services, including consulting firms and law firms, also saw little change in compensation.

“Last year was a year where we saw a number of restructures followed by a period of consolidation for many businesses resulting in many employees accepting what was offered to them. However, this year, there is a renewed sense of optimism in the market, with growing confidence indicating that pay increases will be a key theme.”

Many employees are moving elsewhere for higher salaries or a lower cost of living.

There was also a shift towards relocation, Sanford-Scutt said.

Many employees were moving elsewhere for higher salaries or a lower cost of living.

“Additionally, we are witnessing a notable shift in investment across all sectors, from start-ups to major New Zealand corporations, who are reinvesting in technology to fuel their growth. This reinvestment is driving demand for new skill sets, especially in high-growth areas such as AI, data, and security, which are expected to see continued growth moving forward.”

Bridget Clarke, a senior director at Robert Walters in Wellington, said some labour rates in the public sector had fallen by as much as $20 an hour in 2024.

“It’s worth noting that we also saw greater rate harmonisation, resulting in more consistent hourly rates across the public sector, with fewer variations. Another trend we observed was that salaries for fixed-term employees have increased as hiring managers seek to attract top talent, often needing to offer higher pay to secure the best candidates.”

- RNZ