Climate crisis, Swiss economy, gender quota
Deloitte Switzerland’s CEO takes a position
We asked Reto Savoia, CEO of Deloitte Switzerland, 16 questions. What lessons has he drawn from the COVID-19 crisis? What is his position on sustainability? Does he believe in quotas for women? And how can Switzerland retain its top economic position? Click on one of the five topics, dive in and learn more about Reto's thoughts and ideas.
Our business and our performance
It’s doing very well despite the unstable economic environment. In the previous financial year, as at 31 May 2020 we achieved growth of five per cent and for the first time generated more than half a billion Swiss francs in revenues. All of which means we’ve written another chapter in the Swiss success story that began more than a decade ago. And we are well positioned broadly: all our business units contributed to this strong result. We are also well represented in all important industries. We work for almost all companies in the SMI and a growing number of medium-sized organisations.
Our continued strong performance is testament to the resilience of our business, the quality of our services and their relevance to our clientele. We have been able to support our clients effectively in dealing with their challenges, including during the COVID-19 pandemic.
The advisory business, which accounts for almost 80 per cent of our turnover, is by its nature flexible and adaptable to changes in the social and economic environment. I am in no doubt that we’ve had a very attractive service offering at all times and that our multidisciplinary approach is best-in-market. We are the largest consulting firm in Switzerland and the market leader in the issues that are most important to our clients. These include technology-driven business transformation, cyber risks, the future of work, cloud services, sustainability and global changes in tax and other regulations.
In the last five years, we have created more than 600 additional jobs and made significant investments in new forms of service delivery, business models, technologies and, last but not least, our employees. That’s because our goal is clear: we want to continue growing in the Swiss market.
Auditing creates trust and ensures the independent verification of financial information. This is a task with implications for the entire economy and society, which we perform with the greatest possible care. Looking to the future, the roles and responsibilities of the corporate audit need to be clarified for the various stakeholders, especially the board of directors, investors and the authorities. We are actively involved in the discussions about the future shape of the audit.
In accordance with current legal and regulatory requirements, the auditor issues an opinion on the accuracy of the financial statements and compliance with the applicable rules. In doing so, the auditor verifies with all due care and with the aid of state-of-the-art data analysis whether the financial situation is presented accurately. Within the scope of our audit mandate, and where requested with additional in-depth clarifications, we can provide assurance to stakeholders and build or strengthen the important quality of trust.
Our Audit & Assurance business in Switzerland is experiencing robust growth. To continue this, we are working on the audit of the future: providing intelligent and insightful audits to meet the rapidly changing needs of investors and society. Audit is a central part of our business and an important pillar on which we base our positive reputation. Thanks to our rigorous internal regulations regarding independence and quality, we continue to see growth potential. Deloitte has an established portfolio of medium to large Swiss and international corporate clients and a broad industry presence.
For some time now, the focus has been on digital transformation, where we support our clients with appropriate expertise, from strategy development right through to implementation.
From a holistic business perspective the digital transformation means identifying and exploiting the opportunities that arise, for example in the area of innovation, the development of new business models and cost and process optimisation. In addition, it brings about a new way of dealing with financial, legal, cyber, environmental and many other risks. In the wake of the COVID-19 pandemic, companies have begun to examine critically virtually all their business processes even more systematically than before. Our consultants are at the forefront of helping with this.
We will see even more after the pandemic, when the extensive aid packages for companies and employees come to an end, and there will be fundamental changes in company structures and processes, value and supply chains, service palettes, the use of technology and much more.
Companies have one goal: they want to emerge from the crisis stronger and build resilience against all conceivable future developments – and use it as a basis for generating sustainable growth from which, in the end, customers and employees benefit as much as the state and society.
My goals and leadership principles as CEO
I want to build on the success of the past few years and drive forward important developments. To achieve this, we will be making targeted investments in new technologies, business lines and partnerships.
In particular, we will continue to invest in our employees. I am also interested in achieving a high level of diversity. For us, ’diversity’ is more than just a buzzword! Our employees should feel comfortable and experience the best conditions for working well together. This means that we’re strengthening our efforts for diversity and inclusion through targeted initiatives, for example further increasing the proportion of female managers. We are proud of our international corporate culture, our ethnic diversity and our open-mindedness towards all issues relating to gender, generation, personal background, religion, skills, sexual orientation or ethnicity.
For me, freedom and entrepreneurial responsibility are paramount: all employees should be curious, team-oriented and courageous. They should be able to question existing structures at any time and bring in new ideas. Mistakes can be made, but it is important to take responsibility for them. Transparent communication is indispensable for me: our staff can also deal with difficult issues and appreciate open, honest and timely communication. This has proved to be very effective, especially during the pandemic. I want to support all employees in developing their talents with us, as our company has an enormous treasure trove of expertise and professional and life experience. Also, I value flat hierarchies and want to empower my staff to set and achieve high goals and realise their ambitions.
Corporate culture and equality
In my opinion, Deloitte is more entrepreneurial, dynamic, innovative and technologically stronger than our competitors. We invest a lot in creating a working environment that lets our people develop fully and contribute their personality, ideas and perspectives. We are a firm that is strongly anchored in Switzerland yet very international in every respect, focusing on supporting large and medium-sized companies.
Diversity and inclusion are strategic priorities for us. Without the diversity of thought and creativity of our employees, we would not be able to solve the complex problems of our clients. It’s the only way we can find effective solutions. When I talk about diversity, I’m not just talking about the percentage of women in management positions or the number of nationalities working for us. It is about the targeted promotion of an open, performance-enhancing environment that allows all employees to fully contribute their strengths. We also promote our inclusive corporate culture and collaboration by rewarding leadership that allows all employees to succeed.
We have long supported the creation of an inclusive work environment where everyone can succeed. One example is the implementation of clear standards for recruitment and promotion. We also sponsor and build alliances between employees across different levels: for example, all members of the executive board sponsor a female manager who is a little further along in her career path. In addition, we offer various networking and professional development programmes for women in our company. And we are committed to supporting inclusive behaviour among our managers. We offer training programmes on Inclusive Leadership and Unconscious Biases - for men and women.
As we all know, it can be very challenging to balance parenthood and career. We therefore support our employees before and after the birth of a child: for example, with generous maternity leave and coaching for expectant parents and their managers. These measures are having an effect, although we are still far from satisfied. The proportion of women is indeed increasing, but more men than women are still applying to us and we are still hiring more men – at the moment 40 per cent of our employees are female. However, we have substantially increased the proportion of women in management in recent years. But here, too, we can’t afford to rest on our laurels. We must take the problem of the ’glass ceiling’ seriously and continue to promote women's careers all the way to the top.
Deloitte is also committed to women outside the firm. Several years ago, we launched the "Women in Cyber" initiative with the aim of achieving a more balanced gender ratio in the field of cybersecurity. Since then, we have been inspiring more and more young women to pursue a career in this professional field. Female Deloitte executives also support students with our mentoring programme "YouNext". This covers topics such as personal branding, personal development and starting a career.
The challenges of the Swiss economy
Automation is not a new phenomenon. It can be traced back to the industrial revolution. The Swiss economy, businesses and employees have experienced constant change over the past 200 years. We have talked about this in detail in our major business location study "Power Up Switzerland". During this period, entire branches of industry and numerous occupations and professions emerged and then disappeared. Many were replaced. Adapting constantly to change requires considerable effort. People must be able and willing to change jobs and to invest in education and training. Companies as a whole, as well as their employees, need to evolve in order to remain competitive.
However, automation has also brought significant benefits to the Swiss economy: productivity, gross domestic product and prosperity have increased. In addition, more and more interesting jobs and new forms of work are being offered. We can already see that recent transformations have had similar effects, with the increasing spread of digital technologies. The pandemic has further accelerated these trends. As a high-cost country, Switzerland needs to adopt modern technologies even faster, and companies need to be able to employ the best qualified workers from all over the world. Incidentally, widespread working from home has shown that even established work can be done remotely, from a distance. Against this background, employees who have felt very comfortable working from home also have an interest after the pandemic comes to an end in returning to the office, at least partially; otherwise outsourcing work to the home could be followed by outsourcing work to far beyond our borders.
We produced a report a few years ago on Switzerland's digital innovation capacity, which we assessed from three perspectives: one of them includes the workforce. At the time, we came to the positive conclusion that Switzerland has an excellent education system and outstanding universities, and is very attractive to foreign workers, and that the Swiss workforce is well equipped for the future.
The pandemic has changed the situation, which is likely to get worse when the aid programmes for companies and employees come to an end. For me, the pandemic is also a wake-up call for the Swiss labour market! Certain job profiles will become redundant even faster, while others will rapidly gain in importance. As a result, social problems will also increase if Switzerland does nothing.
Schools should focus more on IT, communication and technology skills from primary level onwards. It is important to spark greater enthusiasm for technical topics and skills among young people – especially among girls. We should also strengthen cooperation between schools and companies.
We must also not ignore the demographic changes that are taking place, and the ageing of society. Without countermeasures, these developments could lead to a significant shortage of skilled workers in Switzerland in 10 to 15 years. Switzerland must therefore make further efforts to tap underutilised labour potential (such as women or older workers), or retain them for longer. Companies should, for example, offer older workers attractive and flexible working models and motivate them to work for longer. Politicians need to make the retirement age flexible and drag employment law into the digital age.
Policymakers could conclude additional free trade agreements and should ensure long-term access to the European single market, by far Switzerland's largest trading partner. For their part, companies need to optimise their global value and supply chains, company structures and processes, and systematically exploit the opportunities from digitalisation.
To remain competitive, the economy will continue to need to recruit talent from third countries, i.e. from outside the EU. In order to be attractive to these highly qualified workers, Switzerland must improve various conditions, such as the sometimes-cumbersome regulations on talented young employees and start-ups, business travel and international trainee programmes. We also need to look at harmonising and digitalising authorisation processes throughout Switzerland.
The full impact of the covid-19 crisis is not yet apparent. We will only really be able to see its effects after the aid programmes for companies and employees come to an end. It is important always to look ahead and build resilience and competitiveness for sustainable growth. In this context, every Swiss company must ask itself what its business model for the future looks like, one from which clients and employees will ultimately benefit as much as the state and society.
In order to obtain a more comprehensive picture, Deloitte conducted a survey among more than 400 executives during the pandemic. Based on this, we then identified eight key areas for action in which companies as well as the state can help to strengthen the competitiveness of Switzerland as a business location. This includes areas such as innovation, entrepreneurship, international trade and sustainability. For each area of action, we have proposed numerous measures - in keeping with the motto "Power up Switzerland".
A few anecdotal examples during the COVID-19 crisis have revealed pent-up demand for digitalisation at federal and cantonal administrative agencies. Nevertheless, we are of course aware that there is a need to catch up in various respects. We’re not just talking about interfaces between citizens or companies and the state. There needs to be a targeted use of digitalisation to optimise all processes, just like in companies.
According to our Digital Government Survey of 2020, the Swiss want better digital services from the state in various areas. People who do their banking online, pay with their smartphones and shop online find it inconvenient to have to queue at the counter for a form or send registered documents by post.
According to our survey, fears about a lack of data security and concerns about cyber risks are the biggest hurdles for people to make greater use of digital services provided by the state. These concerns must be taken seriously, and the opportunities and risks of digitalisation must be discussed openly. The bill on electronic identity (e-ID) failed to pass, but I’m quite sure that the federal government will come up quickly with a new solution that is acceptable to the majority. And importantly: the new e-ID will be key for digital interaction by citizens and companies with the administration, but the Swiss economy will also benefit.
Our responsibility for society and the environment
I’m not a fan of quotas. Having a high level of diversity among employees - in every respect - is not a ’nice to have’, but an economic advantage. So companies should systematically promote the advancement of women. There is no simple recipe for success, otherwise changes would have been implemented long ago. Rather, an effective solution needs a big package of measures. This starts with the classic role model of our society. The compatibility of family and work is another open area. We have made great progress here over the past 20 years with supplementary family structures. But even this is not enough. For example, we shall need many more day schools. Then, for me, a key measure is the targeted professional advancement of women, and this is a major responsibility for our company. Deloitte has a good portfolio of support measures here. I have long advocated a combination of measurable goals, the achievement of which is made a part of the assessment and remuneration of employees. These goals must be deeply anchored in the company culture.
But the range of necessary measures goes much further. It also includes, for example, psychological and rhetorical aspects that can be promoted as early as childhood. If all this fails to bear fruit, we can also talk about setting target values, although I am no friend of formal quotas. That’s because they do not provide the flexibility the economy needs. But the federal government has recently adopted target values for members of the board of directors and executive board and has also extended the scope of the Gender Equality Act in the area of salaries. So we have to work very closely with the legally binding aspects internally and also when supporting clients.
Firstly, we are very much a part of society. We are an organisation that creates attractive jobs and apprenticeships, trains employees, advises large companies and SMEs, maintains partnerships and alliances, employs suppliers, and actively supports numerous associations. But of course, it’s also an organisation that benefits from excellent infrastructure and well-educated employees and an attractive environment at various locations in the country. We’re committed to improving this environment in every respect, in the best sense of sustainability, with a view to providing stable financing to the community, creating a creating a healthy society and environment. Our purpose is "to make an impact that matters on our clients, our people and society".
As a responsible member of Swiss society, we also publish studies regularly on the economic situation in Switzerland, for example with recommendations on how the government and companies can counter the impending labour shortages. And we address sensitive, difficult topics. Recently, together with Swiss board members, we showed how important it is to also address the ethical challenges that digitalisation brings. Our major location study "Power Up Switzerland" has evolved into a series in which we address important topics with various Swiss economic actors on how our country can become even more competitive. With our COVID-19 studies, we have surveyed citizens on important aspects of daily life, providing companies and politicians with valuable input on how to shape the future.
With our programme to improve the employability of refugees, we provide an important impetus for mentoring, sponsoring, integration events and cooperation with other companies. The initiative is based on cooperation with local non-governmental organisations (NGOs) and runs in Zurich and Geneva. We presented the project at the United Nations Global Refugee Forum in Geneva.
Deloitte takes a comprehensive view of sustainability, with a view to building an intact environment, creating a healthy society and providing stable financing to the community. It’s not only the state that would do well to take a comprehensive view of the topic. Companies also need a clear sustainability strategy across their entire value chain, with a view to interacting with all stakeholders. This will need a number of measures, including clear metrics and meaningful reporting to create transparency and trust with investors, customers, regulators and, of course, employees.
However, business is not yet where it should be. The results of one of our latest CFO surveys showed that CFOs still do not see action on climate change as a priority. They are preoccupied with what they see as more pressing challenges that pose an immediate threat to their business. All the same, many companies have taken significant steps in the fight against the impact of climate change, for example by improving energy efficiency. But more must surely follow as climate change will have a direct and significant impact on all business activities and on the future of companies.
In the wake of the adoption of the indirect counterproposal to the Corporate Responsibility Initiative, Swiss companies will have to provide much more information on environmentally and socially relevant aspects of their business activities abroad. We support these efforts and will help companies provide the necessary transparency.