In the ever-evolving job market of 2024, employee retention has become a top priority for businesses in New Zealand. With talent shortages across various sectors, attracting and retaining the right employees is more challenging than ever. According to the latest data from The New Zealand Herald, businesses are facing increased competition for skilled workers, which means that keeping your top performers is just as important as attracting them. We will explore the top employee retention strategies in New Zealand for 2025 that businesses should implement to ensure long-term success, focusing on trends, practices, and resources that are proving effective.
Focus on Employee Wellbeing
Workplace wellbeing has emerged as one of the most important factors in employee retention. In New Zealand, a growing emphasis on mental health, work-life balance, and physical wellbeing has reshaped how businesses engage with their employees.
In a survey conducted by Workplace Wellbeing NZ in early 2024, 72% of New Zealand employees said that workplace wellbeing initiatives significantly influenced their decision to stay with their employer. Companies that prioritise employee wellness—by offering flexible working arrangements, mental health support, gym memberships, and wellness programs—are seen as more attractive to current and prospective employees.
Key Strategies:
- Offer flexible working hours or remote work options.
- Provide access to mental health resources (e.g., counselling services or wellness apps).
- Organise regular team-building activities that promote both physical and mental wellbeing.
Competitive Compensation and Benefits
While salary isn’t everything, it certainly plays a significant role in employee retention. In 2025, businesses must ensure they’re offering competitive wages and benefits that align with industry standards.
According to PayScale, New Zealand’s compensation rates have seen a steady increase in the last few years, driven by inflation and talent shortages. In fact, businesses that fail to keep up with market salaries risk losing their top performers to competitors willing to offer more attractive packages.
Beyond base salaries, offering unique perks such as additional leave, healthcare benefits, and retirement contributions can further enhance employee satisfaction.
Key Strategies:
- Benchmark compensation against industry standards to ensure competitiveness.
- Offer performance-based bonuses or profit-sharing schemes.
- Implement attractive non-monetary benefits (e.g., extra annual leave, paid volunteer days).
Career Development and Training Opportunities
Employees want to feel that they are growing and advancing in their careers. This is especially true for younger workers in New Zealand, many of whom are seeking employers who offer clear paths for progression and development. According to the PayScale, 65% of employees in New Zealand indicated that career development opportunities were a significant factor in their decision to remain with a company.
Offering training programs, mentorship, and professional development opportunities not only enhances employees’ skill sets but also demonstrates that the business is invested in their long-term success.
Key Strategies:
- Provide regular training and upskilling opportunities.
- Create clear career progression paths and promote internal hiring.
- Offer mentorship programs that support personal and professional growth.
Recognising and Rewarding Employee Contributions
Employee recognition is a key element of employee retention in 2024. New Zealand workers, especially millennials and Gen Z, place a high value on being appreciated for their contributions. 40% of New Zealand employees are more likely to stay with an employer if they feel their work is consistently recognised (PayScale, 2024).
Incorporating both formal and informal recognition programs can go a long way in making employees feel valued. This includes everything from public recognition in team meetings to implementing structured reward systems like “Employee of the Month” or performance bonuses.
Key Strategies:
- Regularly acknowledge achievements, both big and small.
- Implement peer-to-peer recognition systems.
- Use personalised rewards (e.g., gift cards, extra time off, or tickets to events).
Fostering a Positive Company Culture
A strong company culture is one of the most effective ways to retain employees. New Zealand companies with inclusive, diverse, and values-driven cultures tend to see higher employee satisfaction and lower turnover. Employees who align with a company’s values are more likely to stay long term. In a HRNZ report, 67% of respondents said a positive work culture was a key driver of their decision to stay with a company.
A workplace that fosters open communication, supports diversity, and prioritizes a healthy work environment will build loyalty and trust among employees.
Key Strategies:
- Ensure open communication at all levels of the organisation.
- Prioritise diversity, equity, and inclusion in hiring and workplace practices.
- Establish a transparent leadership style that values feedback and employee input.
Embracing Flexibility and Hybrid Working Models
Flexibility has become a key driver of employee satisfaction in 2024. With remote work becoming more prevalent, many employees in New Zealand expect flexible working arrangements that allow them to balance personal and professional lives.
Nearly 40% of New Zealand employees now work in a hybrid or fully remote model (HRNZ, 2024). Companies that offer this flexibility are seeing higher levels of employee engagement and retention. Flexibility isn’t just about where employees work; it also extends to when they work, as many employees prefer flexible hours.
Key Strategies:
- Implement hybrid work policies that allow employees to work from home part-time.
- Offer flexible hours or compressed workweeks.
- Provide tools and resources to support remote work, such as technology stipends or coworking space memberships.
Engage in Regular Employee Feedback
Regular employee feedback is a critical component of retention. Employees want to feel that their voices are heard, and companies that fail to seek and act on feedback risk disengaging their workforce. Annual surveys or one-on-one check-ins can help employers understand employee concerns and address potential issues before they lead to turnover.
An article from Hays NZ in 2024 showed that organisations with effective feedback mechanisms had a much higher retention rate compared to those that didn’t solicit regular employee input.
Key Strategies:
- Conduct regular employee surveys to gauge satisfaction and engagement.
- Hold exit interviews to understand reasons for departure and address systemic issues.
- Act on feedback to make tangible improvements within the organisation.
In 2025, employee retention in New Zealand is more complex and competitive than ever. To stand out in the war for talent, companies must adopt employee-centric strategies that prioritise wellbeing, career growth, recognition, and flexibility. Businesses that get these elements right will not only attract top talent but will also retain them for the long term, building a committed and engaged workforce for 2025 and beyond.
By taking these steps, New Zealand businesses can improve their retention rates and create a workplace culture that supports both employees and the organisation’s overall goals.
Sources:
Hays NZ. Retention strategies to retain top talent. 2024. Available at: https://www.hays.net.nz/employer-insights/management-issues/retention-strategies. [Accessed 16 December 2024].
HRNZ, Creating a positive work environment: tips for HR to boost employee engagement. June 2024. Available at: https://www.hrnz.org.nz/news/article/creating-a-positive-work-environment-tips-for-hr-to-boost-employee-engagement. [Accessed 16 December 2024].
PayScale. 2024 Compensation best practices report. April 2024. Available at: https://www.payscale.com/research-and-insights/cbpr. [Accessed 16 December 2024].
The New Zealand Herald. The big workplace trends for 2024. Available at: https://www.nzherald.co.nz/business/economy/employment/the-big-workplace-trends-for-2024. Jan 2024. [Accessed 16 December 2024].
Workplace Wellbeing NZ. 7 Tips to kickstart your wellbeing program. March 2024. Available at: https://workplacewellbeing.co.nz/workplace-wellbeing-7-tips-for-kickstarting-your-wellbeing-plan. [Accessed 16 December 2024].
