Casual work on the rise

New Zealand employers are increasingly turning to casual and fixed-term workers, with new labour market figures highlighting a shift in how businesses are approaching recruitment.

Stats NZ data for the September 2026 quarter shows the number of casual employees increased by 19.5% over the year to 116,900, while fixed-term employment rose by 18.9% to 50,900.

Although permanent employment remains the dominant arrangement, accounting for 91.3% of paid employees, the growth in non-permanent roles is prompting questions about what is driving the change.

In a recent New Zealand Herald opinion piece, Entrepreneur and Perpetual Guardian founder Andrew Barnes, who is internationally recognised for championing the four-day working week argues the trend reflects growing uncertainty among employers, who are becoming more cautious about committing to permanent staff.

With employment costs rising and businesses facing uncertainty around the economy, interest rates, the election and the impact of artificial intelligence, Barnes suggests some employers are choosing to restrict permanent recruitment and fill vacancies through contract labour instead.

For business owners, this approach can offer greater flexibility when managing fluctuating customer demand, seasonal peaks and staffing costs. Casual arrangements can help cover busy periods, while fixed-term contracts can provide additional resource for specific projects or temporary business needs.

However, Barnes questions whether the short-term savings come at a longer-term cost.

He argues that the shift towards non-permanent employment risks reducing job security and the overall quality of work. Workers may face unpredictable hours, less certainty around income and fewer benefits associated with permanent employment.

AI could also be influencing recruitment decisions. Barnes raises the possibility that employers are delaying permanent hiring while assessing how AI might change their workforce requirements, including in traditionally secure professional and white-collar roles.

The challenge for businesses is balancing operational flexibility with building a dependable and experienced team. High staff turnover and inconsistent availability can affect customer service, productivity and the time and cost involved in training new employees.

While casual and fixed-term employment can be useful tools for managing changing business needs, the growing reliance on these arrangements raises a the question - are businesses creating more flexible workplaces, or simply shifting the uncertainty and risk onto their workers? Getting that balance right could be just as important as managing the wage bill.

With more businesses considering casual and fixed-term employment, understanding employer obligations and getting employment arrangements right is essential for franchise owners.

You can find case studies and useful planning tools to help franchisors and franchisees ensure they stay on the right side of employment law in this article by Abhay Kolhe of MBIE’s Employment System Guidance & Engagement.