When the crunch hits, go against the grain

Discover why the organisations that keep investing in early careers during economic uncertainty are best positioned for long-term success.

2026 has been a rollercoaster so far. We came into the year riding green shoots, before the energy shock took us on a wild ride down uncertainty lane.

New Zealand’s economy has reacted largely as we expected. Business confidence dropped, less than 2 months after the headlines hit. There are also early signs of hiring activity dropping back from 14 months of gains.

Auckland Business Chamber’s data in February showed only 7% of firms expected the economy to decline in 2026, by June that number had jumped to 24%. When it comes to hiring outlook, that has gone from 41% of firms looking to add headcount in February to 36% in June. Not a collapse, but a pullback already noticeable only 3 months after the shock.

Westpac’s chief economist Kelly Eckold also contributed his view, explaining “Businesses are likely to shelve hiring plans while oil prices and uncertainty are elevated.”

These sources that show a common instinct when the funk hits is for businesses to pull back on hiring, trim budgets and recalibrate strategy and outlook. This is a mistake, and the numbers over the long term, looking past timeframes of economic cycles, show it clearly.

Harvard Business Review’s analysis of 4700 companies across 3 recessions showed that businesses that shifted to cutting headcount had just an 11% chance of “breakaway performance” when the boom cycle started anew.

The companies that performed the best when conditions improved combined disciplined cost management with continued long-term investment, including their people. These organisations had a 37% probability of “breakaway performance” post-recession.

Refocusing to New Zealand in 2026, an opportunity to build your organisation for the future and rise to the moment when the recovery hits is sitting on the sidelines. Graduates and early career talent pools are brimming. Youth unemployment is at 15.2% while graduate programmes are being cut across the country.

AI is the technology of the future and is now a key skill to succeed. Data from Deloitte’s 2026 Gen Z and Millenial Survey found that 74% of Gen Z youth already use AI day to day in their work. Also notable is that many described feeling like they were actually ahead of their firm’s development curve when it comes to AI and technology.

This research from Udemy shows the appetite for growth. 65% of Gen Z is most motivated by professional development, higher than millennials and Gen X. It also shows that 94% of Gen Z dedicate at least one hour a week to learning, favouring online tools.

The youth of today are digital natives, possess high learning agility, and are hungry to contribute to the next chapter of New Zealand’s story. Instead of tightening the early career’s funnel in these uncertain times, bet on the future. Bet on the youth of New Zealand and widen your graduate funnel instead.

The organisations that move through the market with a long-term strategy don’t just think about headcount and cost month to month; they think about what attracts people to them, and how to inspire people to stay and grow with them long term.

That’s the work we are passionate about, be it recruitment, media or employee value proposition “EVP” consulting, it is all about telling the story of New Zealand businesses to Kiwis and the wider world. Do reach out if you have ever considered investing more into your people; it is our bread and butter. Some examples of our work can be found here: https://www.haines.co.nz/our-work

Written by Jack Ledbrook