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As global economies continue to recover from the recent pandemic, employers in Europe are finding it increasingly difficult to find the right candidates for  job vacancies. Supporting this statement, a recent survey conducted by the European Labour Authority showed that 28 occupation categories employing 14% of the total European workforce were said to be experiencing labour shortages.

 

In Switzerland the situation is also quite serious with an historic labour shortage being recorded in  key sectors. Some of the reasons for this are the ageing population on one hand, as well as changing lifestyles which are transforming the labour market.

  • At the end of 2022, Switzerland reported the highest ever recorded number of job openings with more than 120’000 positions open.
  • Vacancies spanned several sectors including manufacturing, health, commerce, hotels + restaurants, construction, and IT.
  • The situation is being made more critical with an unemployment rate of only 2.2% which is the lowest rate recorded in 20 years.

According to various sources in 2022, the global average number of companies struggling to find suitable workers has now hit 74%. And although there are differences within the EU, experts agree that the current shortage of labour has hit an historic level.

So why is there such a shortage of labour in Switzerland and other countries currently? There are several reasons for this, including ageing populations as already mentioned and according to Dr. Philippe Wanner – a professor at the University of Geneva other reasons include:

  • In 2022, the global fertility rate was 2.428 births per woman. This represented a 0.41% decline from 2021. In Switzerland the same rate for 2022 was 1.553 births per woman, which was actually an increase of 0.32% increase from 2021! These low rates are affecting population growth. China in particular saw a decreasing population for the first time in 60 years.
  • Baby Boomers are retiring. This is the generation born between 1945 and the early 1960’s. This will leave a vacuum by 2030 that will be difficult to fill. This situation affects some professions more than others – for example medicine.
  • Families with large families no longer are compatible for two working parents. And high birth rates can only be supported in countries such as the Nordic region, with sophisticated social care systems.

According to Professor Wanner, there are two ways to solve the current crisis in Switzerland:

  • Better integrate certain categories of under-employed workers into the labour market, for instance women and asylum seekers.
  • Encourage immigration.

Regarding the second point: In the last 20 years, the population of Switzerland has increased by 20% and is expected to reach 9 million this year. And with close to 30% of Swiss residents now born outside of Switzerland, this situation is unprecedented in Europe

 

 

With over 100’000 vacancies still open on the Swiss job market, this suggests that the influx of foreign workers can be traced back to the need for skilled labour. Although this statement may ring true, immigration obviously has implications with regards to infrastructure and housing in the short term as well as social implications in the longer term. With the Federal Elections looming in the Autumn, this subject is likely to be one of the major issues of contention.

Given that the shortage of workers is now almost a  global phenonomen, some countries have begun to use demographic marketing strategies to attract workers. So called “Nomad Visas” are being made available in countries such as Portugal, Spain and Croatia (to name just three), with the goal of attracting skilled workers. Portugal is also seeing an increasing number of own-nationals returning home due to the fiscal incentives for repatriation that Lisbon has offered since 2019.

 

Changing Skillsets

The world is now experiencing extreme transformations in the labour market led by specialisation and the service sector, with some traditional trades and occupations disappearing, especially in manufacturing. With other sectors such as technology also experiencing a high shortage of labour.

 

Switzerland has traditionally recruited skilled workers from within the EU, but with training levels rising in Europe and European countries keen to hold on to their skilled workers themselves, it may become necessary for Switzerland to recruit workers from outside of Europe. The current situation however, is that immigration to Switzerland from non-EU countries is difficult and strictly regulated. And generally, only permitted for highly qualified workers. Time will tell whether this situation will change after the elections in Autumn 2023.

 

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