Expecting a Pay Rise in 2026?
Matt Love-Smith • November 19, 2025
My Forecast for the Engineering Remuneration Market for 2026
The New Zealand engineering sector continues to feels like it’s refusing to give up its seat on the Rainbows End roller coaster. For some time now, we’ve been ‘corkscrewing’ from one quarter into the next. Accompanying the sector on this gut wrenching ride is its close relation ‘remuneration expectations’ which, suffering from a loss of confidence, has withdrawn into a bout of subdued shyness.
So will 2026 be the year of a sustained climb back to more predictable growth? and will remuneration expectations emerge out of their shell with renewed confidence? Well I’ve been reading the talent tea leaves on this and here is what they are telling me….
- Following the post-COVID ‘Talent Wars’’ and the accompanying inflationary spikes, where some salary gains surged well into the double digits (*10% in a single year for roles like Technical Manager), I sense that the market will enter a new, more stable, yet still highly competitive phase. Less corkscrewing and more of a long steady climb, with some mechanical groaning along the way.
- Long term upward pressure remains strong and the core driver of salary growth—the persistent engineering skills shortage—remains firmly in place. New Zealand is simply not producing enough engineers to meet long term domestic demand, a gap that will continue to fuel competition for hiring experienced talent for years to come. x10 this when the long promised economic ‘green shoots’ hit a solid growth spurt and capital projects get up a real head of steam.
- Those engineers that graduated in the past 24 to 36 months are well on their way to completing their time served as knowledge hungry newbies and are about to bloom into the providers of serious R.O.I. Its just a shame that so many of them have completed their graduate rotations in Sydney, Melbourne or London. The allure of the big city lights, with matching salaries, continued to run rampant in 2025, driving our talent gap even wider. But they shall return....someday.
- Experienced Roles (Professional, Team Leader, Technical Manager, Leadership): These roles will continue their upward trend, but the sharp 'catch-up' increases of the 2021-2022 peaks are hardly visible in the rear view mirror now. I anticipate annual median base salary increases to settle into the mid-to-high single-digit range (3.5% – 5.5%). The sectors forecasted to show the strongest employment growth—like business services, construction, energy transition—will likely be setting the pace here.
- The Big Winners (Historically): Looking back at 2018–2024, the Professional, Independent Practice and Team Leader level Engineers, have seen the highest cumulative percentage growth in median base salary of around +28%*. This suggests that filling the mid-to-senior ranks with proven talent remains the biggest challenge for firms, who should expect to continue to pay a premium to attract and retain these experienced and high performing engineers.
- While the structural talent shortage provides a floor on pay for every engineer, entry-level roles (Graduate) may see more modest remuneration growth in 2026. With economic growth (GDP) and capital investment forecasts continuing to lean more toward the soft side for 2026, the rate of remuneration increase for new graduates, along with new market opportunities, could again be limited. However, the long-term demand remains strong, preventing any significant or enduring stagnation. The focus at this level is likely to shift from high-percentage remuneration increases back towards ‘total package value’ including a strong component of training and development.
The Role of Total Compensation
The market will continue maturing beyond only base salary. Employers must seek to understand their employee needs, analyse their peers and the broader employment market, to remain both competitive and relevant. The more tailored the compensation package, to career and life stages, the more effective it will be in your talent retention and attraction strategy. New Standard Packages could include elements of :
- Employee well-being: Fitness programs, customizable gym memberships, and access to mental health resources.
- Extra financial incentives: Bonuses, profit-sharing, stock options, and referral bonuses.
- Workplace amenities: Free or subsidized meals, commuter benefits, on-site fitness centers, and recognition programs.
- Cost management and transparency: Some benefits may be voluntary or “opt-in,” with employees contributing pre-tax to selected benefits to increase flexibility and cost-effectiveness for both employers and staff.
Demonstrating the ‘full value of employment’ is becoming the new gold standard for employer comparison.
In summary, 2026 will not be the year of explosive, double-digit pay jumps, but it will be a year where salaries remain elevated and continue to rise steadily due to chronic scarcity of talented engineers, across intermediate and experienced career stages. The focus for employers must be on competitive, holistic employment packages and not just the base salary to secure and retain top engineering talent.
Check out the profiles of some great Engineers ready to explore their next career opportunity - HERE
New Zealand Engineering Talent Insights
The economic conditions are influencing the contract employment landscape in several ways. Here are some of the trends Talent Hive has seen recently. Demand Shifts NZ firms facing economic headwinds are hesitant to commit to FTE hires but with projects and deadlines still to deliver on, there is likely to be more reliance on temporary and contract solutions to manage workloads in the coming months. Available Talent Although not widespread, layoffs and restructures in the Tech sector could lead to a larger pool of candidates available for temporary and contract work, and Talent Hive has seen an increase in enquiries from people looking to understand how they might set themselves up for contract engagements. This has the potential to increase competition but could also provide businesses with access to qualified talent on a flexible basis. Tech Sector Specifics We are seeing an increase in demand for contract staff recently, particularly Software Developers, Integration and Solution Architects, and Business Analysts. This upswing in demand is reflected in the recent Seek job listings data. There are 207 Contract IT/Tech roles advertised on Seek today and 23% of those contract roles have been listed in the last 7 days. 52 of the 207 contract roles advertised are for Software Eng/Developers with 30 listed ads for Contract BA’s. Wage Control In Stats NZ’s latest update, New Zealand's salary rates actually increased by 4.1 percent in the year to March. That labour cost growth slightly outstripped inflation, which was sitting at 4 percent. Contract hourly rates in the Technology sector have stabilised in recent months as hiring demand has decreased and we may even see hourly rates come back a little, particularly for role types where there is an oversupply of contract talent. Hybrid Work Trend One trend we are certainly seeing in the contract market are fewer remote work opportunities. Increasingly there is a requirement for contractors to have the ability to work some of the week at a designated office and this is restricting the opportunities contractors are able to go for. Full remote work options aren’t completely gone but they are significantly reduced. Contract candidates must be open to in-office work for at least some portion of their engagement. Overall, the current climate creates a complex landscape for both businesses seeking talent and professionals exploring temporary and contract opportunities. Success for Contractors will depend on adaptability, flexibility around rates, and contract length. Talent Hive's Value Talent Hive's understanding of the current market dynamics, along with our strong network of skilled professionals, positions us uniquely to support both clients and candidates Addressing Uncertainty: For businesses navigating hiring uncertainty, Talent Hive offers flexible staffing solutions. We have access to contract talent that are ready to fill immediate skill gaps and help organisations manage fluctuating workloads. Beyond Just Tech Skills: We understand that finding the right technical expertise is only half the battle. Talent Hive's strong connections within the contractor talent pool allow us to identify professionals who are not only technically capable but also a strong cultural and organisational fit for our clients. This approach ensures smoother onboarding and a positive impact for both the contractor and the employer. We would like to share some of the contractors we’re working with at the moment. Click below to view some of the great IT talent we're working with to find roles at the moment.
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