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Accurity Blog

Ageing populations and extremely low interest rates are exerting pressure on pension systems worldwide, and many countries are either seriously debating raising the pensionable age of their workers or already have initiatives in place to do so.

Switzerland is no different: the growing demographic imbalance is putting pressure on its social security system and also reducing the pool of skilled labour. According to recent UBS calculations, the Swiss labour market will face a shortfall of between 230-500,000 workers in the next 10 years.

Supporting an increase in the pensionable age, the Young Radicals, the youth wing of the centre-right Radical-Liberal Party, recently submitted 145,000 signatures to Bern in order to try and force a referendum on a proposal to increase the general retirement age to 66 by 2032. Currently this is 64 for women and 65 for men.

But critics including Patrick Eugster, president of the initiative committee, say this doesn’t go far enough, arguing this will only shore up the system for a few more years, potentially then creating an even bigger problem. The committee supports raising the retirement age first to 67 – to  be reached in 2043 and then 68 by 2056.

It is argued therefore that to continue to operate successfully, the Swiss economy must make better use of the pool of available local labour if companies are to remain competitive in the long term and have the right skills in their workforce in the coming decades.

But while raising the workforce age might equate to more people being available for work, the question is will these people have the required skills to be able to carry out the jobs available in the future?

Currently employers in Switzerland often cannot find the skills they need among those seeking work. And according to the Institute for the Future forecast, 85 % of jobs that will exist in 2030 haven’t even been invented yet.

In addition, a recent Cision PR newswire concluded that the shortage of Global talent currently lies at 69%. This is the highest figure in the last 15 years – with the EMEA region hardest hit at 74%. In Switzerland 83% of employers now report difficulties finding suitable candidates.

But while the lack of skilled workers is rife, a recent study by Deloitte suggests that 40% of workers currently aged between 50 and 64 would like to continue working beyond the official retirement age. However there are several reasons why companies are not queuing up to employ workers beyond retirement age. These include cost and skills mismatch.

This has lead to larger employers especially, engaging several strategies to combat the lack of skilled workers. These are:

  • Investing in learning and training
    In order to make the workplace more attractive and create a culture of loyalty and worker longevity (which also serves to reduce hiring and training costs), employees are looking to intensify education programs for current employees, so these can take on roles in the future, requiring new skills.
  • Recruiting permanent staff from outside of Switzerland
    This is a strategy traditionally used by larger corporations but now, with both mid-sized companies and more recently even start-ups. This usually occurs where there is a more urgent need for a diversity of skills and expertise. Here abidance by the company to SECO recruitment laws is very important in oder to avoid fines or penalties.
  • Investing in Freelancers/Contractors
    Companies across all sectors are now engaging freelancers and contractors to fill roles requiring specific expertise, usually for a defined period of time and rate. Labour leasing companies work in tandem with contractors and freelancers to supply company clients with skilled workers with the right talent and experience in a timely manner.

Currently, the shortage of skilled workers in Switzerland is hurting the engineering & technology, pharmaceuticals, finance & banking and IT sectors, with other industries also affected.

In the longer term raising the retirement age in Switzerland and thereby allowing workers to work longer may be a solution for certain disciplines and circumstances. There will always be a need for skilled workers both in traditional, as well as new sectors. In order to stay competitive and attract foreign investment, Switzerland must remain flexible in its approach to sourcing its skilled workforce.

 

As Switzerland’s most trusted payroll provider, Accurity GmbH has over 20 years’ experience providing all our partners – company clients – contractors – recruitment agents –  with the best advice about labour leasing and intermediary permanent services ensuring these make the right decisions. Even in challenging and changing times! If you would like to speak with one of our team of experts, simply contact us now. If you are  looking to move to Switzerland soon, contact our team today to see how we can make Switzerland easy for you!