Insights from ELMO’s 2025 HR Industry Benchmark Report NZ

Aotearoa New Zealand’s HR revolution has begun

We found that the HR landscape is evolving at a rapid clip. AI is well on its way to shaking up recruitment, while stable hybrid working models are still a bit of a mystery, and Gen Z gains a stronger foothold in the workforce. Here’s what you need to know for 2025.

AI has firmly landed

AI isn’t coming, it’s well and truly here. New Zealand businesses are leading the charge and tend to view AI as even more transformative than their Australian counterparts. We found that:

• 93% of HR professionals say AI will significantly impact their operations this year
• 82% feel prepared for this increasing need for adoption.
• 57% of NZ organisations are increasing their AI technology budgets in 2025 as compared to 40% in 2024).

AI is currently making its mark on HR roles by:

• Automating thankless and repetitive tasks which frees up HR teams for strategic work
• Enhancing talent acquisition processes
• Speeding up regular workflows and driving data-driven decision making.

It should be made clear, though, that rather than replacing jobs, AI will largely augment roles and increase productivity. This is enablement, not replacement. HR teams that actively embrace AI driven tools will gain a major competitive edge and put them in good stead for the years ahead.

However, AI can still pose challenges, as we discuss in our full report.

Hybrid work remains rather contentious

Five years on from the pandemic, we’re still seeing the hybrid work debate roll on. In our report we found that:

• 38% of HR professionals say their organisation mandates some office attendance 
• 39% of organisations are required onsite/in office five days a week
• Only 16% have full control over their hybrid schedules.

It’s quite apparent that businesses are still searching for the perfect balance:

• 88% of organisations plan to revise their policies this year
• 26% will introduce some mandated office days
• 31% shifting to employee choice
• 6% to fully remote
• 24% full-time onsite / in office.

It’s interesting to note that hybrid work is more of a priority for NZ businesses than Australian (65% vs 55%) and that flexible remote working is one of the top 3 factors influencing their employee retention strategy.

The rise of the Gen Z workforce

Baby Boomers are retiring, and Gen Z are stepping into their shoes. By 2025, Gen Z will make up a sizeable portion of the workforce, in fact, close to one third. The challenge? Their expectations tend to differ substantially from previous generations.

We asked whether differences could be seen in work styles between older generations and Gen Z. We discovered that:

• 48% said there was a significant difference
• 46% said there was somewhat of a difference
• 6% said they are similar or no difference. 

HR teams would be wise to rethink their employee value and offerings to align better with Gen Z’s priorities, or risk losing top young talent to a more adaptable employer.

HR emerges as a strategic force

We’ve found that HR professionals are seeing an increased level of collaboration between their Chief Human Resources Officer (CHRO or equivalent) and executive leadership: 

• The CEO-CHRO partnership has strengthened, with collaboration up 6% in New Zealand.
• The connection between HR and CFOs has grown even more, up 11% in New Zealand.

This shift underscores HR’s increasing role in shaping business and financial strategy. How is this playing out?

• Aligning HR metrics with business goals.
• Leveraging financial insights to drive workforce strategies.
• Using historical data to predict future workforce challenges.

The Biggest HR Challenges in 2025

Despite strong momentum, HR professionals still face key hurdles. What were the top challenges?

• 32% said the number one challenge was upskilling and reskilling employees to keep pace with change.
• 28% reported that managing hybrid work was a prime issue
• 26% identified managing cybersecurity and data risks as a top issue.

HR is in the driver’s seat in 2025

So what did we learn? With AI, hybrid work, and talent retention remodelling New Zealand’s workforce, HR is no longer just about policies and payroll, instead it’s becoming a strategic force that drives change and decisions. It’s also become clear that organisations that invest in AI, refine their hybrid work models, and align their HR strategies with business objectives will set themselves up for long term success.

Read the full 2025 ELMO HRIB report