‘Brain drain risk’: NZ firms retreat from flexible work faster than Australia

Sunday, 9 November 2025

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New Zealand employers are winding back remote-work options faster than those across the Tasman, a trend workers and experts say could be pushing more talent to Australia.

New data from recruitment website Seek shows just 7% of local job ads now mention work from home or hybrid flexibility, down from almost 10% a year ago. But in Australia, the figure remains higher at just over 9%, down from 11% a year ago.

Seek senior economist Blair Chapman said New Zealand firms’ retreat to pre-pandemic norms had “the potential to exacerbate the brain drain to Australia, which has not retreated to such an extent”.

Chapman said applications by New Zealanders for Australian jobs jumped in 2022 and have remained well above pre-pandemic levels, even as Australia’s labour market cooled.

Seek data shows that New Zealand applications for Aussie jobs have grown by about 1.3% a quarter since November 2022.

All other international applicants for Australian jobs peaked in August that year, growing 3% on the previous quarter. Now international applicant growth for jobs in Australia is at about 0.5% per quarter while Aotearoa applications continue to grow 1.3% per quarter.

“During the pandemic, flexibility was a useful recruitment tool,” Chapman said. “Now, with more labour available, New Zealand employers don’t have to compete as hard.”

It comes as the Public Service Association (PSA) launched legal action against ACC over reduced flexible working rights this week, after ACC increased the number of days it said staff had to be in the office from two to three.

“It reduces morale when employers try to cut work from home allowances,” PSA national secretary Fleur Fitzsimons told the Sunday Star-Times. “Too many New Zealand employers have outdated ideas.

“Australian employers realise working from home is good for workers and good for business — it’s a genuine win-win.”

She said the decisions from Kiwi employers “seems to come from a lack of trust rather than recognising the productivity gains that can occur”.

Some workers describe the shift as an unwelcome reversal of the freedoms gained during the pandemic. Auckland-based accountant Christine, who asked not to be identified, said hybrid rules had tipped from balance to control.

“I can only work from home one day a week, and it can’t be before or after a public holiday or annual leave day,” she said. “We also have to give two days’ notice.”

She said the restrictions did make her want to leave New Zealand, but she had bought a home in Auckland.

“If a job in Australia had better flexibility, I definitely would have thought about moving more seriously. After Covid we were trusted to work from home full-time – now it feels like a lack of trust, like being back at school.”

A Christchurch-based employee at a major insurer described a similar tightening. After a leadership change, the company imposed a two-day-a-week office rule, with few exemptions for those living more than 50km away.

Seek figures showed the insurance and superannuation sector remained the country’s most flexible, with 36% of job ads offering remote work in August, up from 26% last year.

But the staffer said that hadn’t filtered through to his workplace.

“It was announced in an extremely cold way, without room for individual circumstances,” he said. “Working from home is now seen as something that can affect salary or even trigger disciplinary review.”

He said many staff hired during Covid were told they were on permanent work-from-home contracts. “When the new policy came in, management just said, ‘No, you need to be back two days a week.’ People felt misled.”

Each office day added about 90 minutes of commuting, he said. “It doesn’t have great monetary or environmental impact. Nobody thinks commuting is a worthwhile use of time.”

Chapman said Australian workers enjoyed stronger protections when requesting flexible arrangements, especially in congested cities where commute times were long.

In Australia, the Fair Work Commission (FWC) can step in if an employer rejects a flexible work request without proper justification. The commission can order the employer to reconsider or even approve the request itself.

This year the FWC found Westpac had failed to justify rejecting an employee’s bid to work from home full-time and ruled she could continue doing so.

New Zealand’s Employment Relations Authority (ERA), by contrast, has no equivalent power. It can only review whether an employer acted in good faith when handling a request under the Employment Relations Act, but it can’t compel an employer’s decision.

A Ministry of Business, Innovation and Employment spokesperson said any employee can ask their employer for a flexible working arrangement under part 6AA of the Employment Relations Act 2000.

Employers must consider requests fairly and in good faith but do not have to approve the request if there is a valid business reason for doing so, and must respond in writing within a month of the request being made.

Workers can go to the ERA if they feel the process isn’t followed properly, where employers can face fines of up to $2000 if that is proven.

But there are no plans to change the rules to align with those in Australia, they said.

Mana Communications founder Caleb Hulme-Moir said that framework helped explain why Australian firms appear more open to hybrid work.

“They’ve got heaps of policies that are better for the employee because government policy and unions drive that,” Hulme-Moir said.

His 10-person firm adopted a structured hybrid rhythm where everyone worked from home each Wednesday and had a nine-day work week. He said that gave staff enough time to rebalance their life while keeping the team collaborative.

“We’re a small, highly collaborative group, and if everyone picked their own days it would be chaos,” he said. “Having a set rhythm makes work easier to plan and sends a message that the day is still for work, not a long weekend.”

When Covid hit, Mana lost nearly half its revenue and trialled a four-day week to preserve jobs.

“We discovered no drop-off in quality,” Hulme-Moir said. “That proved people can work smarter inside a defined structure.”

The agency backed that up with broader perks designed to retain and recharge staff: a nine-day fortnight (every second Monday off), five weeks’ paid leave after five years’ service, and a strict 8am to 5pm cap to discourage overtime creep.

“Humans are social. Being together is healthy,” he said. “Work from home is great for productivity, but it will never replace connectivity.”

One of his account managers, Robert Hoek, is a new parent and said the combination of a predictable rhythm and trust-based flexibility shaped how he feels about work.

Since becoming a father, Hoek said Mana worked with him, offering extra flexibility for his first month back to work.

“I’m super grateful for it, and it makes me more keen to do a good job,” he said. “If employers are worried about skiving, they should look at the broader organisational culture before blaming working from home.”

But Seek’s Chapman said flexibility was becoming a generational expectation: “Gen Z values flexibility much more than older generations. Work-life balance ranks alongside salary and purpose in what they want.

“If you want to retain younger workers, it’s a big consideration.”

Still, he expected the share of New Zealand job ads offering remote work to keep falling before stabilising “well above pre-Covid, but below where it is now”.

For PSA’s Fitzsimons: “There’s no going back to pre-Covid workplaces. Employers need to value this or they’ll lose more talented staff to Australia.”

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