Recent Stats NZ figures show unemployment sitting at around 5.3% in March 2026. Although the unemployment rate has not shifted dramatically since last quarter, it remains well above the 3.5% recorded three years in the March 2023 quarter, and is still sitting at one of the highest rates since briefly around September 2020 and prior, back in 2015/2016. What’s more troubling is that since March, New Zealand has seen tough times particularly with the Middle East conflict, and fuel crisis that began in late February, and it is unlikely that the current quarter accurately reflects the current economic times. Although the unemployment rate has not shifted dramatically since last quarter, it remains well above the 3.5% recorded three years in the March 2023 quarter.
With unemployment rates forecast likely to continue rising, employers must be mindful of how this may affect their business. Taking steps to prepare could look like:
- Planning for softer goods and services demand and cost pressures: Identify workforce risks early and ensure any changes are implemented in a way that is lawful, practical and defensible. Employers could look at options such as hiring freezes, reducing hours, or redeployment within their business.
- Updating employment agreements and policies: Employers should review whether their agreements adequately address issues such as flexibility of duties and hours, redeployment, remote working, temporary shutdowns, leave management, notice, termination and redundancy, so their agreements better reflect current business needs and reduce the risk of disputes.
- Managing employee uncertainty: Communicate early and consistently, respond to questions and keep records. If change is on the table, follow a fair, good-faith process and direct staff to support options.
If you are considering changes to your business structure, workforce, or employment arrangements during these challenging economic conditions, it is sensible to seek advice early. Please get in touch with the Employment Team at Ford Sumner to discuss today.