Recent reports in the mainstream media, show that 2022 profits for Migros, one of the biggest and most well-known retailers in Switzerland, fell by 31% to CHF459 million vs previous year. According to CEO Mr. Fabrice Zumbrunnen, this was mainly due to excessive supplier costs driven by the global geo-political situation. Although no job losses are currently planned, recruitment at Migros appears to have slowed down from previous periods.
For those not familiar with Switzerland, Migros is as well-known in the country as Swiss watches, chocolate, and the Alps themselves. Many consider Migros to be a Swiss institution. And with a significant part of the recent supplier cost increases born by Migros themselves (and not passed on to the customer at the expense of profits), it is not hard to see why!
Is the situation with Migros a one-off or are other large employers in Switzerland also suffering? With negative banking sector news also hitting the headlines, it would seem not. So our team decided to take a closer look at the current employment situation in Switzerland, to see if we could spot any trends as well as offer our view on how things might develop for the rest of 2023.
Unemployment rate vs open positions
According to statistics available, the unemployment rate in Switzerland stood at 2.1% for February 2023. This is slightly down from 2.2% the previous month. This meant the number of unemployed in Switzerland fell by 2’324 down to 98’452. But given recent banking sector news, experts predict that there could be a number of layoffs later in 2023 pushing the number of unemployed back up.
In terms of open positions – a survey conducted in Q4/22 by the KOF Swiss Economic Institute (Zurich) found that there were 128.000 vacant positions in Switzerland at the end of June 2022. This number fell to 121’782 by December 22.
SMEs vs Multinationals
Switzerland has a reputation for being an international business centre where large multinational companies are headquartered. While this is true, small & medium sized companies also play a fundamental role in the Swiss economy, representing more than 99% of the companies registered in Switzerland and thereby creating 2/3 of total jobs.
In terms of job openings with multinational companies, some current indicators illustrate:
- According to the job portal “Indeed” as of mid-March 23, the top 50 companies in Switzerland were looking to fill more than 9’000 positions.
- Although this seems healthy, the above represents a dip of 20% from a survey conducted in Autumn, 2022.
- The number of total job advertisements has actually fallen by nearly 7%.
- The biggest decline in open positions – according to job advertisements – was recorded in the retail sector being led by Migros and their main rival, Co-op.
- There were also fewer jobs advertised at Swisscom, the Swiss Post and various other industrial groups.
- The Pharmaceutical and luxury goods sectors however, are better positioned, and the leading Pharmaceutical supplier Lonza, as well as the luxury goods group Richemont, are just two examples of major companies currently hiring.
Swiss education system and work trends
Ranked 9th globally in developed countries, the Swiss educational system has long since relied on its role to prepare the vast majority of its students to participate in a dual-track apprenticeship system. For those who are not familiar with this, this is where young people combine on-the-job training at a selected company, with lessons, usually one day a week, at a vocational school. On completion a Federal VET Diploma is awarded after three to four years study. The newly qualified individuals then generally spend at least several years at their host company when possible, or at a new company in the applicable business sector. Longevity, stability and loyalty are standards that Swiss employers and employees traditionally strived for.
With Generation Z (1997-2012) now integrating into the workforce, it appears that longevity and loyalty are playing second fiddle to personal work expectations, needs and career goals. The global pandemic is also cited as being a contributing factor for many young people now reconsidering their life goals. According to recent surveys from peoplecentrix.eu:
- It is estimated that, on average, 11% to 15% of Generation Z workers in Switzerland voluntarily left their jobs between 2014 and 2021.
- Contrasting models show that only only 6% to 7% of workers from older generations voluntarily left their jobs during the same period.
- Survey work also found that the rate of resignations among Gen Z workers grew by 10% every year between 2014 and 2021.
- Given that Generation Z are now a growing part of the workforce, this trend could mean that companies will have to do more to understand and support workforce centric strategies in order to attract and retain staff. Not only in Switzerland but globally.
The are various industry sectors that work closely with the labour leasing model to engage expert labour in a rapid and agile manner. Switzerland simply does not currently have enough skilled labour to fill open positions and hiring an expert to complete skilled tasks as part of a project has been a popular way of filling open positions for some time. There are labour leasing opportunities both in blue and white collar fields and some of the most important sectors using this model are: Pharmaceutical, Biotech, Finance, ICT, Construction.
Swiss companies are also increasingly looking beyond Switzerland’s borders to locate remote or teleworkers. A recent legal agreement signed between France and Switzerland expanded the possibility for workers to work remotely from France for up to 40% of their total work time.
In summary: The Swiss employment scene in 2023 is very dynamic!
- On one hand, the unemployment rate is relatively low at just over 2%.
- There are now more positions open than people to fill them – although, many of the unemployed do not have the required skills to apply.
- This is leading to government retraining initiatives being introduced.
- Remote and flexible working trends are growing and as Generation Z continues to enter the workplace, this trend is only set to continue.
- Large employers are for the most part, hiring fewer workers (There are exception such as in the Pharma and Luxury sectors for example).
- Over 99% of the companies in Switzerland are SMEs and one of the challenges for these is to create interesting, challenging roles, with clear career prospects.
- Labour leasing continues to be a preferred way for companies of all sizes to attract skilled workers quickly.
- As the dust settles on recent banking merger developments, there could be more workers applying for open positions or indeed, registering as unemployed.
Accurity is 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. We also work with cross border workers living in France and working in Switzerland – as well as those living in Switzerland and working remotely for foreign companies. Our core services include Employer of Record or EOR for contractors and international and domestic clients wishing to engage contractors. Our pricing system is fair and transparent. We are based in Switzerland and have excellent local knowledge and connections. Contact our team to see how we can help you.