Hollowed Out: AI, offshoring, and the brain drain thin the ranks of NZ’s professional workforce

Monday, 16 March 2026

New Zealand is losing its professionals to better pay offers overseas, and at the same time, companies here are reducing jobs - and sending some of their roles overseas. In the first of this three-part series, The Post looks at pressures on our white collar workforce.

The news is full of stories of thousands of people applying for few jobs. But in fact, look closer, and what emerges alongside that is a hollowing out of New Zealand’s professional workforce - and that’s a huge risk to productivity and growth, a global recruitment consultancy says.

There’s been intense focus on the “brain drain” of people heading offshore, driven by a weak economy and the lure of higher salaries in other countries, particularly Australia.

But there is also the perception of a lack of opportunities in the white collar workforce, which is also contending with the advent of AI and the increasing outsourcing of work offshore.

Robert Walters Australia and New Zealand chief executive Shay Peters said they were seeing signs of a “hollowing out” of the local workforce across multiple experience levels.

Read more:

• Kiwis spent 22 million hours on hold last year, but AI may be making inroads

• NZ salary guide 2026: Employers face stubborn skills gap as talent flees to Australia

• Work, Interrupted: Here's where skill shortages are right now

The recruitment company’s latest Salary Guide showed 58% of New Zealand professionals were open to relocating in the next year, and the two biggest reasons for that were higher salaries and more job opportunities.

Openness to relocating was evident among professionals at the start of their careers and at senior leadership levels, and suggested the outflow of talent was real, and occurring across the workforce, Peters said.

The rise of remote work had expanded the ways organisations source talent.

“It means skilled professionals can work for international businesses without being tied to the local market. The result is that highly skilled talent is becoming thinner on the ground domestically.”

AI was beginning to play a role in this dynamic as organisations adopted new technologies, he said.

“We are seeing some entry-level tasks increasingly automated, which in turn can reduce the number of traditional graduate and junior roles entering the market, and further thin out parts of the talent pipeline.”

There was a real risk to productivity and growth for local businesses if they could not attract and retain the talent they needed, and for NZ Inc it meant material GDP growth would be challenging to find and maintain, he said.

“It also means competition for skilled professionals will intensify, making experienced talent an increasingly scarce and valuable resource within the local labour market.”

So how have these trends played out across the sectors that make up the white collar workforce? Here’s what those working in different professional sectors have to say.

The accounting sector

The accounting profession is looking at a shortfall of about 15,000 employees over the next five years, according to Infometrics forecasts last year.

Chartered Accountants Australia and New Zealand government affairs leader Lydia Tsen said that shortfall - which was most pronounced at the mid career level - was a challenge for the sector.

Migration to other countries was happening, but that was not new, because accounting was a very portable profession, she said.

“We have arrangements with nine other countries where people can go and work, so it's always been quite common for people at mid level to go overseas for a secondment or for an OE.

“Those arrangements mean we also get accountants from many countries coming here.”

But the difference now was that the flow of arrivals was shut off when the borders closed during Covid.

'When the borders reopened Kiwi talent wanted to experience the world, but the global cycle was not what it used to be and we weren’t getting the flow we used to.”

Globally there is a shortage of accountants. But the industry’s working to address the issue and establish stronger pipelines of local and migrant talent to fill the roles, she said.

“Immigration settings are now at a place that works for the profession, we are starting to see more migrant talent, and the pipeline is finally starting to build up.

“But there’s still a time lag, and it will take a while to flow through and start reducing the shortage.”

The tech sector

There’s always been an outflow of experienced talent heading overseas, but the country is going through a very inward looking phase, Tech New Zealand chief executive Graeme Muller said.

“It might be a bit worse than it’s been in the past, but it’s just part of the cycle. When you look at the tech sector, many roles are very mobile now.

“Once you needed to be in the office, but that’s no longer the case, and it means not only do you have people going overseas, but also people here working for offshore companies.”

The counterpoint was that New Zealand tech companies had the opportunity to get the best people in the world working for them from overseas, he said.

“Digital export companies, such as software providers and game developers, have traditionally hired lots of migrants. But migrant employee numbers are now much lower, while overall staffing levels are up.”

It was much easier to run a geographically distributed workforce, and the mobility of jobs and platforms had changed the nature of the playing field, he said.

Muller said people could get higher wages overseas, in places such as Australia, because of the different scale.

But rebates meant local companies could now pay higher wages than they used to, which helped attract and keep talent, he said.

‘The real challenge is limited entry-level jobs. When people finish their degrees, they often can’t find work, so they leave. It relates to the rapid automation of entry level tasks as tech evolves.

“AI means basic coding can be done by anyone, and that takes out lots of junior roles. But you need a senior engineer to check it so the demand is for experienced workers.”

To address the problem the industry was working to develop a more vocational, apprenticeship type of pathway to qualifications, he said.

“It is more of a skills mismatch than a skill shortage as there are opportunities in companies here, but it is an opportunity cost for the industry.

“As a country, we need to develop a long-term vision and strategy for the sector to help it grow, create more jobs, and ensure the industry can be competitive and innovative.”

The legal sector

Talent shortages were nothing new in the legal profession, according to specialist recruiter Lee Scott, from Scott Legal Recruitment.

There had always been a steady stream of departures overseas, so it had long been a significant issue, particularly when it came to solicitors, she said.

“And there are particular gaps, or shortages at the three to eight year experience level in the profession but again, that’s always been the case.

“While there are a lot of law graduates, not all of them go on to work in law firms.

“Of the ones that do, they often leave to get some overseas experience after a few years, and then want to re-enter a local firm at around the eight year level when they return home.”

But where many of those mid-level lawyers were going had changed, she said.

“Most used to head for the UK, now it’s Australia. It’s not just that the pay is better than here, Australia is seen as an easier transition, and there’s a shortage of lawyers there too. So recruiters are looking for them.

“Shortages are a challenge, but it may be that recent developments in the Middle East will encourage some to come home.”

The view from HR

Jaime Gallocher is the director of The People Project, a consultancy that provides human resources services to companies in many sectors.

She said they were seeing a “hollowing out” of the workforce to varying degrees, but the talent shortage had been a topic of conversation throughout her career.

“Finding talent that is technically capable, able to think critically and with strong relationship acumen has been a constant problem across lots of different roles and occupations.”

People were going overseas, but it was a continuation of something that had always been a challenge for New Zealand, she said.

“Being at the bottom of the world and isolated, if people want to boost their experience the way they often do it is to go away. Many come back later, but there is a continued gap there at that mid-level market.”

Meanwhile, there were fewer junior level jobs around as companies were hiring less at a lower level because of AI which they were using on a daily basis, Gallocher said.

“The roles might still be available, but where once there were 10, now there are five, and with businesses very conscious of where they spend their money, it comes down to AI tools vs graduates.

“There are certain industries where it’s particularly pronounced. Marketing is one, and general office support is another.”

Ironically, it meant some people were using AI for work they were not technically capable in, and it impacted on the quality of the work and created greater risk, she said.

“Generally, businesses are operating at a leaner capacity now. At a more senior level they are hiring but less - because it is difficult due to the talent shortage, so roles are staying vacant for a couple of months.”

Tomorrow: We look at big New Zealand companies using global consultancies such as Tata to replace layers of their workforce with cheaper labour and AI - all in the name of cost cutting.