How is Labor in Europe? Check out Switzerland

Not so long ago, I was working in Riethem-Weilhem Germany for the Germans, of course. A smaller ($1 billion) automotive company. My US position was in Cazenovia, NY where the Rockefellers used to hang out in their mansion on the south end of Lake Cazenovia. It is now called the Brewster Inn.

While in Germany, they gave me a car and I would go touring all over southern Germany and into Switzerland. They would send me to the Czech Republic to visit suppliers. I was on a wanderlust at the time. It is a pretty place to be. With a bit of knowledge of the language, I could get around nicely.

It is interesting to read about Labor in Switzerland and the issues they are having. Sounds awfully the same as the US. I have another link worth reading at the end.

Why Switzerland needs workers from abroad – SWI, Samuel Jaberg

With over 100,000 jobs listed as vacant in the first quarter of 2022, staff shortages are reaching record levels in Switzerland. The situation could get worse, threatening the country’s prosperity. 

Difficulties in recruiting are affecting both industry and service sectors, according to figures released at the end of May by the Federal Statistical Office. The hospitality sector is suffering badly, along with the high-tech sector. The shortages are also affecting healthcare, transportation, construction, logistics and the building trades. Even lorry-drivers are getting hard to find.

“The pandemic stimulated the digitalisation of the economy and the development of many logistics chains. All economic sectors are now competing to attract the same kind of skills. If you are a computer scientist or delivery driver, you can pick and choose your job”, says Stefan Studer, CEO of the union federation Employees Switzerland.

In a review of about 40 countries, the Organisation for Economic Cooperation and Development (OECD) finds, not surprisingly, that jobs requiring a high level of qualifications are the most sought-after in Switzerland. “Skills needed in healthcare, in digital technologies and scientific research are really lacking now,” says Glenda Quintini, head of the skills and employability section of OECD. “On the other hand, we are not seeing that structural scarcity in the skills needed for training and education, or for physical and manual occupations.”

Affluent nations struggle

All the developed economies are dealing with the same challenge. Germany (over two million vacant jobs) and France (one million) have record shortages in staff. In Italy, in the construction sector alone, 260,000 workers are lacking.

In Britain, where unemployment hit historic lows after Brexit, companies are having trouble recruiting qualified personnel. At least half a million people have quit the job market since the beginning of the Covid-19 pandemic nearly two years ago, due to poor working conditions and low pay.

This phenomenon is making headlines in the English-speaking world, where it is called the “Great Resignation” or the “Big Quit”. In the United States, where more than 11 million jobs are vacant, more than 4.5 million Americans quit their jobs in March to seek better opportunities.

The Covid effect

“We are seeing a post-pandemic catch-up effect, with increased staffing needs in several sectors. At the same time, huge numbers of baby-boomers are retiring now, and this gap is hard to fill with only the new people joining the work force,” says Giovanni Ferro-Luzzi, an economics professor at the Geneva School of Economics and Management.

Often enough, cyclical and structural factors combine to explain the shortage. In the hospitality sector, it was already hard to find trainees before the pandemic. But the health crisis has worsened the situation. “As well as difficult conditions in terms of the demands of the job, there was lack of job security due to coronavirus. Many workers have quit that sector in the past two years, and they won’t be back,” says Lucas Dubuis, spokesperson for Unia, the country’s largest trade union.

It’s the same story in the healthcare sector, where poor working conditions became an open issue during the pandemic. “The employees there see no long-term perspectives in their jobs due to the stress and low pay,” says Dubuis.

A study published early this year by Employees Switzerland suggests that the current shortages are just an advance warning of greater challenges to be faced by Swiss employers seeking staff in the future. In four years, there will be a lack of nearly 365,000 qualified workers (with a diploma or degree) in Switzerland. In 2035, the figure is likely to reach 1.2 million. These alarming forecasts are based on a simple calculation: the difference between the number of people retiring and new people joining the workforce.

The cost to Switzerland

In their study, Employees Switzerland found that lack of personnel could cost the Swiss economy CHF 60 billion ($60 billion) in 2025 alone. Difficulties recruiting for industry are especially worrisome. “It’s a serious threat to this country’s capacity to innovate,” says Studer. This view is shared by employers’ associations, concerned about the loss of competitive advantage if staff were to be lacking in the long term. With nothing much in the way of natural resources, Switzerland needs to be able to count on its “grey matter” if it hopes to stay prosperous.

Filling the gap with migrants

A solution to make up the demographic deficit could be to import skills from neighbouring countries. German craftsmen, French cross-border workers, seasonal workers from Italy: without the help of immigration over the past two centuries, the Swiss economy would never have got where it is today.

Given its high wages, Switzerland has always seemed something of an Eldorado for workers across the continent. But this may be changing. “German, French and Italian companies are also having trouble recruiting qualified people. We can’t always be counting on that reserve army of workers,” believes Studer. Ferro-Luzzi agrees: “Switzerland is still an attractive country [to immigrants]. But working conditions and pay are getting better in many parts of Europe, and the differences are starting to matter less.”

The after-effects of the pandemic are not to be underestimated here either. In Spain, Italy and France, Covid-19 kept people stuck at home, and the brain drain came to a sudden halt, notes Quintini. “These people are seeing the benefits of working near their own network of family and friends and are in no hurry to leave home again. We have yet to see if this trend will become permanent.”

Upskilling and reskilling

One option would be for Switzerland to open the tap of immigration from non-European countries, though the issue is politically loaded. For unions, the way to go is quite clear. “We are calling for improvement in working conditions, especially higher pay, and a strengthening all round of upskilling opportunities,” says Unia’s Dubuis. The OECD, an institution usually thought to have a neo-liberal slant, calls for a similar approach. “Although it may be difficult to recruit, many companies are slow to raise pay, give their employees more flexibility, or hire candidates who may not have all the qualifications needed and then train them. It’s time for a change of attitude among employers,” says Quintini.

Getting more women, seniors, and people with disabilities into the workforce is another priority, both for employer associations and unions. “The message has been driven home for long enough in political and economic circles,” says Studer. “Now it’s time to take action.”

There is one point on which the specialists interviewed by SWI all concur: continuing education is going to be a crucial factor in the years to come. At the moment, in the OECD countries, fewer than four adults out of ten get training associated with their job. “The figure goes down to 20% for unskilled adults. We see this enormous difference even in the Nordic countries, which are supposed to be progressive on this issue,” points out Quintini.

A better fit between skills provision for the job market and the evolving needs of companies would go far in covering the deficit of qualified staff. This is especially the case for new jobs related to the ecological transition.

Why Switzerland needs workers from abroad, SWI, Samuel Jaberg