Unlocking the Potential of Regional Tech Talent in NZ

Zach Venning • July 18, 2023

While the technology sector in New Zealand is thriving, there is a significant disparity between our regions and main urban centres in terms of tech sector employment. Read my insights below as I unpack whether the data suggests untapped potential in our backyard that could help tackle skills shortages in the technology industry.

Looking at the list of 2023 Hi-Tech Award Winning Companies it really stood out to me that our main centres dominate the technology landscape in New Zealand. While this was always going to be the case as cities by nature draw more technology firms than smaller regional centres, I still think it's somewhat interesting that every single company that won an award was either based in Christchurch or Auckland. Where this opens a potentially interesting discussion is that on the other hand, both individual award recipients, Fraser Paine (Hi-Tech Young Achiever) and Janine Grainger (Inspiring Individual) are from Waikato and Bay of Plenty respectively. This disparity between where our top companies are choosing to base themselves and where some of our top tech talent is coming from begs the question: is there untapped potential in the regions that doesn’t come through because the majority of employers stick to the cities?

Across the board we have a skills shortage in New Zealand, by now this isn’t news but has been front of mind again since Stats NZ data for 2022 showed that in the past 12 months, annual net migration loss to Australia was the largest in almost a decade. Despite the tech sector's growth, the fact remains that we cannot compete with salaries overseas, and our high cost of living makes more grads question the sense in choosing to stay. From an employer's perspective it’s understandable, interns/juniors require time and resources to train and it is hugely competitive between firms for top talent. Small and medium businesses in particular are putting a lot of time and investment into people earlier in their careers, often only for them to leave within the first 24 months. This has been discussed and some great initiatives are happening locally in Christchurch being driven by Canterbury Tech, however there is only so much an employer can do and the fact is, our skills shortage isn’t going away anytime soon.

Looking at what other options are available, employers might want to consider looking into the possibility of increasing hiring in regional areas. I’ve been looking into the numbers, and it seems there is likely potential which isn’t being fully realised yet. Last month, NZ Tech released the Tech Sector Key Metrics 2021. At the end of this document there is a key table; breakdown of tech sector employment in NZ by region. The numbers show that our three main centres - I’m going to refer to Auckland, Wellington and Christchurch as our “main centres”, as these are the only regions which house over 10% of our population - are seriously over-represented when it comes to tech sector employment. This is because outside of these three main centres, the percentage of total tech sector employment is less than the percentage of the population that region makes up, and there is not a single exception.

To show what I’m saying I’ll use Waikato to explain what this means. According to our most recent census 9.7% of New Zealand's population lives in Waikato, but the region only employs 6.2% of the technology sector workforce. The most extreme example of this is the Gisborne region, where the percentage of tech employment in the region is 80.2% less than the percentage of the population that lives there. On the other hand, over half of our tech sector roles are in Auckland, despite the city housing 33.4% of our population, meaning that Auckland is over represented by 55.4%. It is extremely rare when looking for trends like this in data that all results are consistent and there is not a single region to break this trend.

With those statistics in mind, it seems there is good reason for firms to consider whether hiring staff in the regions might be a good long term strategy, either by opening the doors more towards remote working or establishing teams/offices in regional centres. There are plenty of reasons that make our regions desirable places to live; housing affordability, outdoor pursuits, shorter commute/drive times and the rise of remote working. So it's more likely that there is a proportionally low number of tech roles in our regions due to companies being slower to look to the regions for tech talent, rather than there being less talent coming from the regions.

With all of this said, there are some fantastic companies regionally based across NZ which have all successfully built (or are building) teams in their respective regions, firms like Loaded (Queenstown), Timely (Dunedin) and LawVu + Robotics Plus (both Bay of Plenty/Tauranga) all come to mind. To truly tackle the long-term skills shortage in this sector, we need more companies like these in the regions to inspire young people growing up in these areas to envision a career in technology.

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Temp & Contract Recent Trends

May 1, 2024

The economic conditions are influencing the contract employment landscape in several ways. Here are some of the trends Talent Hive has seen recently. Demand Shifts NZ firms facing economic headwinds are hesitant to commit to FTE hires but with projects and deadlines still to deliver on, there is likely to be more reliance on temporary and contract solutions to manage workloads in the coming months. Available Talent Although not widespread, layoffs and restructures in the Tech sector could lead to a larger pool of candidates available for temporary and contract work, and Talent Hive has seen an increase in enquiries from people looking to understand how they might set themselves up for contract engagements. This has the potential to increase competition but could also provide businesses with access to qualified talent on a flexible basis. Tech Sector Specifics We are seeing an increase in demand for contract staff recently, particularly Software Developers, Integration and Solution Architects, and Business Analysts. This upswing in demand is reflected in the recent Seek job listings data. There are 207 Contract IT/Tech roles advertised on Seek today and 23% of those contract roles have been listed in the last 7 days. 52 of the 207 contract roles advertised are for Software Eng/Developers with 30 listed ads for Contract BA’s. Wage Control In Stats NZ’s latest update, New Zealand's salary rates actually increased by 4.1 percent in the year to March. That labour cost growth slightly outstripped inflation, which was sitting at 4 percent. Contract hourly rates in the Technology sector have stabilised in recent months as hiring demand has decreased and we may even see hourly rates come back a little, particularly for role types where there is an oversupply of contract talent. Hybrid Work Trend One trend we are certainly seeing in the contract market are fewer remote work opportunities. Increasingly there is a requirement for contractors to have the ability to work some of the week at a designated office and this is restricting the opportunities contractors are able to go for. Full remote work options aren’t completely gone but they are significantly reduced. Contract candidates must be open to in-office work for at least some portion of their engagement. Overall, the current climate creates a complex landscape for both businesses seeking talent and professionals exploring temporary and contract opportunities. Success for Contractors will depend on adaptability, flexibility around rates, and contract length. Talent Hive's Value Talent Hive's understanding of the current market dynamics, along with our strong network of skilled professionals, positions us uniquely to support both clients and candidates Addressing Uncertainty: For businesses navigating hiring uncertainty, Talent Hive offers flexible staffing solutions. We have access to contract talent that are ready to fill immediate skill gaps and help organisations manage fluctuating workloads. Beyond Just Tech Skills: We understand that finding the right technical expertise is only half the battle. Talent Hive's strong connections within the contractor talent pool allow us to identify professionals who are not only technically capable but also a strong cultural and organisational fit for our clients. This approach ensures smoother onboarding and a positive impact for both the contractor and the employer. We would like to share some of the contractors we’re working with at the moment. Click below to view some of the great IT talent we're working with to find roles at the moment.