Skip to main content

Accurity Blog

The population of Switzerland has risen faster in the last 20 years than any other country in Europe. And since 1967, it has increased by a staggering 50%. The main driver for this is immigration. One obvious reason for immigration is the need for skilled workers.

With just over 9 million people now living in Switzerland, several questions arise: 

  • how is the social infrastructure coping with this exponential growth?
  • are new workers able to find affordable accommodation?
  • can immigrants assimilate relatively easily into the Swiss culture?
  • and last but not least – is this growth sustainable?

In this post, we look at some of the positive economic influences for the population growth as well as examine potential knock-on effects that have been reported as a result of immigration.

Reasons for immigration?

Record low unemployment combined with a significant number of job openings in sectors requiring highly skilled specialists, has meant that many companies have had to widen their search to fill vacant roles.

This combined with a change in EU rules allowing the free movement of persons to work across EU/EFTA states including Switzerland (2002), has led to more people entering Switzerland to work and live.

While the influx of skilled labour has certainly helped Swiss industry and the economy per se, fears are growing from some quarters that the sheer number of new arrivals is driving up the cost of renting a property in high demand areas.

Where are the immigrants coming from, and where are they going to?

In 2021, Switzerland received 123′ 000 new immigrants on a long-term or permanent basis or  4.1% more than in 2020. This number was comprised of:  76.6% immigrants benefitting from EU/FMOP, 1.9% labour migrants, 11.8% family members (including accompanying family) and 6.6% humanitarian migrants.

Germany, Italy and France were the top three nationalities of arrivals in 2021. In terms of flows to Switzerland, Germany registered the strongest increase (+1’400) and the United Kingdom the largest decrease (-1’400) compared to the previous year.

The latest data from the Federal Statistical Office shows that Zurich had by far the highest number of new arrivals. From 2018-22 over 7’000 net registrations were recorded. This was followed by Geneva (5’300) and then Basel (2’500) – and as these are the three main cities for international company headquarters, these numbers should come as no surprise. Other areas that have seen rapid growth are Visp in the Canton of Valais as well other areas such as Graubuenden and the Cantons of Zurich and Vaud. The bottom line is: people will go wherever there are jobs to be found.

 

 

Housing building initiatives 

Switzerland is a relatively small country with a surface area of 41’285 KM2. This area is divided into three distinct geographical regions, including the Alps – which cover 2/3 of the country – but only a fraction of the population lives there.

Currently, settlement areas cover around 8% of Switzerland’s territory. These include areas given over to housing, infrastructure (trade, industry and transport), water and energy supply, wastewater disposal, as well as green and recreational spaces.

 To accommodate newcomers, the amount of space devoted to building new housing in Switzerland has been expanded by 180 KM2 in the last 10 years. This change has come at the cost of farmland, with the amount of agricultural land in the alpine nation decreasing by 1’100 KM2 during the same period.

Contrary to certain views, the number of jobs available has actually increased with rising immigration, by 52 percent since 2008 – with biggest rises in vacancies in the healthcare and public service sectors. At the same time, the unemployment rate sits at a near-all-time-low of 2 percent.

Immigration has led to prosperity – but what about shortages?

Swiss GDP has increased by more than 20 percent since 2002. This is more than all Switzerland’s neighbours, apart from Germany. However, the housing market has suffered as a result of the increased demand and some areas have now registered record numbers of housing shortages, with properties to buy and rent both scarce.

Many of those moving to Switzerland (especially younger workers), prefer to live in the bigger towns and cities where although housing is tight and expensive,  locals are often more open to accepting international guests. Moving outside of the main areas within commuting distance to a job is feasible in Switzerland thanks to the excellent public transport system, but the local population in country areas are sometimes seen as being less welcoming to foreigners.

Referendum to stop population growth?

The population of Switzerland has taken just 10 years to grow by 1 million inhabitants. For a small country that is an extremely rapid growth rate. Many people –  both in Government and in Swiss society in general, now want to delay the next milestone or indeed, ensure it is never reached.

The Swiss National Party – a national-conservative and right-wing populist political party, recently launched the “No 10 million Switzerland” initiative as part of its campaign to win the Swiss Federal Elections due to take place in October this year. If approved the intiative would order the government to stop the population from exceeding 10 million people before 2050. The Government would then be forced to curtail immigration.

However, many feel that by reducing the number of new migrants, this would make the worker shortage worse. It is expected that 800’000 jobs will be vacant by 2030. As people retire, reducing the numbers of new expats paying tax and thereby supporting the Swiss Pension System, this could lead to a crippling situation for Switzerland.

 

 

In Summary:
Switzerland is a small country with some complex challenges ahead.

  • On one hand: low unemployment – a high number of skilled job vacancies – a high GDP attracting immigrants to fill vacant job roles – and an enviable lifestyle in a country where everything seems to work.
  • On the other hand – a rapidly growing population leading to some housing issues – a high number of people set to retire – leading to more job vacancies and fears from some quarters that the population growth has to be slowed down or even stopped.

Swiss based companies need skilled workers to be able to produce and sell the services and goods they produce. And By 2045, Swiss citizens aged 65 and over are expected to account for over 25% of the population in all cantons, according to  projections by the Federal Statistical Office.  The need for more skilled workers seems unlikely to abate any time soon. The need for dialogue and consensus is evident and Switzerland so far in its history at least, seems capable of doing that.

Accurity is SECO licensed in Switzerland with a 20+ year enviable reputation as a trustworthy, reliable and transparent partner for companies of all sizes including SMEs, contractors and recruitment agents.

Payroll Services (PEO)      Employer of  Record (EOR)       Permanent Placement Intermediary      Margin only Payroll     Secondment & Work Permits

Contact our team to see how we can help you.