Contractors and freelancers make up around 25% of the total workforce in Switzerland. And with just over 5 million people currently working, that equates to 1.25 million people functioning as freelancers, contractors or self-employed in Switzerland.
Job vacancies in Switzerland averaged just over 14’000 from 1956 – 2022, but reached an all time high of 67’844 in March, 2022. Employers in Switzerland continue to search for skilled workers to fill a shortage of open positions. The recent Covid pandemic also meant that certain industry sectors witnessed disruption, for example tourism – which saw high numbers of workers laid off, while in health care, many people changed jobs due to high stress levels.
According to Swiss Job Radar there were almost 250’000 positions vacant in Q1/22, with several types of skills in short supply. And with companies now actively seeking new ways to attract skilled workers, both workers and companies are becoming more flexible in the way they interact together. Flexible working, remote working, part-time remits, job-sharing. Nothing it seems, is now “off the menu”.
In terms of focus: IT, management, construction and sales are among the most sought after skills, but there are other areas where there is a short supply of labour. The top in-demand skills are:
- Various engineers: civil, mechatronics and electrical engineers.
- Skilled technicians including in the Pharmaceutical and Biotech sectors.
- Software developers and other IT related jobs.
- Legal jobs.
- Nurses/ Doctors.
So why are there so many positions unfilled? In addition to the recent events, there are several other change-drivers also contributing to this phenonomen:
- Digitalisation is transforming the workforce.
- The workforce is becoming increasingly diverse.
- Finding the right candidates, with the right skill sets is becoming more and more difficult.
- Workers’ employment expectations are changing.
- Companies have to be adaptable to be able to combat the unpredictable change.
Given the current dire shortage of skilled workers, extending work periods is becoming increasingly normal, and Accurity has seen a significant rise in these types of cases in recent years, partly due to the above reasons. Through this, Accurity has also become a leading specialist in this area. Here there are a number of interesting points from our perspective:
- “Hire for Contract” is understood as being the process whereby a contractor or freelancer is engaged by a company to work on a defined mission for a planned duration at a given rate using their specific skillset. This is being widely used by companies winning new orders, or opening up new product or service lines where they need skilled workers to quickly engage in their area of work.
- “Contract to Hire” on the other hand, is when a company employs a contractor for a fixed time period of example for 3-6 months, with a view to hiring them permanently if they prove to be a good fit, and/or if a planned project takes off. This has several advantages over traditional recruitment:
- For the recruiter, this can bring the advantage of being paid a commission on the contract (but usually not later if the contractor is hired permanently – at least, not in Switzerland)
- This scenario is becoming very popular, especially in larger companies and even government departments that usually have policies to retire people at the classical state retirement age or earlier.
- The modern practice is leaning now to working beyond the classic retirement ages due to longer life expectancy, inadequate pension, or simply the will to continue – albeit maybe at a lower work weighting.
- This type of contracting is becoming popular if the employee is respected and has skills and experience that is hard to replace from one day to the next.
- This enable these types of workers to extend and maybe continue to work for several years as an external contractor, or as an adviser, coach, mentor or simply just a “figure head”.
- Retired People do have problems with pension arrangements, accident and sickness insurances however, and Accurity is equipped to handle these cases. From our experience there are a number of specific problems that can occur:
- State Pension: the decision whether to take it or delay it. Accurity pass these on to VZ to resolve as this is a private question.
- Professional Pension: this is not possible if the contractor is over state pension age when they join an employer, but works if they join before that age and can then continue up to 70 years old.
- Those who don’t qualify for this pension, can then pay up to CHF34’000 per year into the 3rd Pillar (tax deductible and flexible investment possibilities).
- Sickness Insurance: Accurity’s policy is designed to allow this for people past the state pension age but the sickness cover period is reduced.
- Accident insurance: continues the same as before the state pension age.
- There is no unemployment insurance after retirement age: and a discount of CHF1’400 per month on social premiums because these premiums no longer count towards the state pension.
In summary: Baby Boomers are soon expected to exit the workforce with Millennials set to take over. But is it that simple – especially for Switzerland?
- The recent Covid Pandemic followed by geo-political uncertainty, means that there are now more jobs available in Switzerland than there are skilled people to fill them.
- This is leading to a mindset reboot – both on the part of employers, but just as importantly for the skilled workers who they engage.
- This coupled with work trends such as digitalisation, remote working and contracting, mean that barriers including fixed retirement age are no longer written in stone.
- Out of the box and flexible thinking is now required and whereas before, a contractor was engaged for a limited period by a company to complete given tasks, now companies are looking to engage skilled contractors quickly to fill open positions. And if these successfully meet the company’s criteria and are good at their jobs, they can then later be offered a full time role at the company as an employee.
With an estimated 50% of current employees born between 1981 and 1997 – having older, more experienced workers can certainly be a plus for companies and a potential win/win for all parties concerned. To coin a commonly used phrase and give it a new take, perhaps the new maxim for business going forward should be “Business as unusual”.
Accurity GmbH is a professional employer organisation based in Zurich. We are SECO licensed with a 20+ year enviable reputation as a trustworthy, reliable and transparent partner for companies of all sizes including SMEs, contractors and recruitment agents. Contact our team on email@example.com to see how we can help your company.