The Shrinking Pathways to Employment for Young Workers in New Zealand

In New Zealand, the unemployment rate among 15- to 24-year-olds stands at approximately 15%, significantly higher than the overall working-age population. This increase coincides with a notable decline in entry-level roles, particularly in junior office and administrative positions, which have traditionally served as critical on-ramps for young workers entering the labor market. The erosion of these roles not only exacerbates unemployment but also hampers the development of essential workplace skills and organizational understanding among young professionals.

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A significant factor contributing to the decline of entry-level jobs is the rise of artificial intelligence (AI). According to a global survey by International Data Corporation (IDC), 91% of organizations reported that AI has altered or displaced job roles. In New Zealand, over half of the employers indicated that AI is a driving force behind job displacement, leading to a slowdown or cessation of entry-level hiring. Nearly 90% of these employers anticipate further reductions in such roles within the next three years. The tasks most susceptible to automation are often those performed by entry-level workers, which has led to a demand for candidates who can navigate more complex, less structured environments from the outset.

The ConversationNZ’s young workers shut out as entry-level jobs shrink

As the number of young people completing higher education rises, competition for available jobs intensifies. This phenomenon creates a paradox where high unemployment rates coexist with a surplus of qualified candidates. Employers are increasingly prioritizing practical skills and real-world experience over academic qualifications alone. This shift presents a significant challenge for young workers, as the diminishing availability of entry-level positions limits their opportunities to gain the necessary experience that employers seek.

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The IDC survey highlights that over three-quarters of New Zealand employers are concerned about the lack of on-the-job learning opportunities. Additionally, many employers cite low awareness of AI-related roles as a significant hiring challenge. This situation indicates that the labor market is facing a deeper issue than a mere skills gap; it is grappling with the need to maintain pathways for young people to enter the workforce and acquire practical skills.

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To address these challenges, educational institutions may need to expand work-integrated learning and entrepreneurship education, enabling students to develop the capabilities and adaptability that are increasingly difficult to obtain through traditional entry-level roles. However, it is crucial to recognize that universities alone cannot resolve this issue. The broader question remains: how can the labor market continue to provide entry points for young people seeking to establish their careers?

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• “These on-ramps to the workforce have also taught tomorrow’s leaders how organisations work, how judgment develops, and how capability is built through practice,” — McNaughton, Labor Market Analyst

NZ’s young workers shut out as entry-level jobs shrink

• “Employers are increasingly looking for practical skills and real-world experience, rather than just degrees.” — McNaughton, Labor Market Analyst

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• “This creates what McNaughton described as a chicken-and-egg problem: without entry-level roles, young workers have fewer avenues through which to gain the experience that employers now demand.” — McNaughton, Labor Market Analyst

NZ’s young workers shut out as entry-level jobs shrink

The future of young workers in New Zealand hinges on the ability of both employers and educational institutions to adapt to these evolving labor market dynamics.

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