The coronavirus crisis is a wake-up call for Switzerland’s labour market

In 2020, the shortage of skilled workers in Switzerland eased for the first time in years. Does this mean the problem is now solved because fewer skilled workers are needed due to COVID-19?

Dell’Anna: Our skills shortage study shows that overall fewer jobs were advertised in Switzerland than in 2019 – at the same time, more people were looking for a job. In spring and summer 2020, a considerable number of additional jobseekers registered with the regional job centres, and many have registered themselves in advance to be on the safe side. But the shortage of skilled workers is still there. As in the previous year, engineering and technology roles, together with accountants, topped the ranking. In nursing and medicine, too, it was often difficult to fill positions.

Savoia: The ideal scenario would be to have a balanced and well-functioning labour market with low unemployment, but that's currently out of the question. In some industries, there's a huge shortage of labour and in others a surplus, such as gastronomy and tourism. The accelerating structural change in the economy will exacerbate the shortage of skilled workers in the medium term. Combined with the coronavirus crisis, the imbalance could grow, and with it, social problems as well.

The structural change will exacerbate the shortage of skilled workers. Combined with the coronavirus crisis, the imbalance in society could grow, and with it, social problems as well.
                                                                       Reto Savoia, CEO Deloitte Switzerland

In which professions do we see an oversupply? Do you also see the polarisation Mr Savoia is describing?

Dell’Anna: The largest oversupply is in commerce. These professions have particularly suffered from the COVID-19 crisis, which has given a further boost to automation and digitalisation and made many jobs obsolete. Also, recruitment is often put on hold in emergencies because new joiners do not generate immediate income. Furthermore, companies have started to outsource many jobs. And yes, Reto is right, the situation in the labour market is coming to a head. To counteract this, individuals, companies and politicians need to come together, and lifelong learning must become more deeply rooted in our society.

Savoia: Our study last year showed that Swiss employees unfortunately greatly underestimate the need for lifelong learning. In my opinion, this is clearly in the hands of the individual. You have to take responsibility for your career and further education. Companies should support this by giving their employees sufficient time to learn and also by offering their own further training options. Additionally, schools should also put a stronger emphasis on subjects such as mathematics, computer science, natural science and technology.

The COVID-19 crisis has given a boost to digitalisation and made many jobs obsolete. Employees, companies and politicians need to come together and make lifelong learning a must.

                                                 Monica Dell'Anna, CEO Adecco Group Switzerland

In the case of certain highly specialised workers, there appears to be an acute shortage right now. Who would you say is affected by this?

Savoia: We're searching high and low for IT and technology specialists such as cyber experts. In addition, young auditors are currently in great demand. Highly specialised experts are of central importance, not only for us but also for our customers. It should therefore also be easier for these people to come to Switzerland from third countries. Switzerland is far too complicated and inflexible in this regard, especially when compared with competing markets such as Singapore, the Netherlands and Ireland. The government must act to dismantle prohibitive regulations and simplify cumbersome procedures.

Dell’Anna: Switzerland doesn't train enough highly specialised experts, especially in engineering and technology professions as well as medicine and nursing. We need to adapt our education system and place greater value on STEM subjects. We also need to find ways to make these subjects more appealing to girls while they're in school.

Because of COVID-19, Sweden has retrained cabin crew members to become nurses. Will we need more of this kind of retraining in the future because of the imbalance in the labour market?

Dell’Anna: Absolutely. A few years ago, we couldn't have imagined the mobility and flexibility we see today. But we're learning that this is one of the positive effects of the crisis. In all the professions where there's a shortage of skilled workers, educational institutions need to be innovative and lower barriers to entry.

Savoia: Today, we're fortunate to live in a country and an economy where people can pursue different professions one after the other. But it's also becoming more and more necessary for employees to reinvent themselves continuously. Retraining and further education are essential measures here, but learning "on the job" is also very relevant. Employers must also be more open when it comes to recruiting. For example, we can't expect everyone to already be a robotics expert with extensive skills when they're hired for a technology job. And you always need certain incentives from the state as well.

Unfilled vacancies can put a strain on companies and the economy. Can you give any specific examples, or would you say these fears are exaggerated?

Savoia: A few years ago, Deloitte decided to focus its blockchain development in Ireland, which would hardly have been possible in Switzerland given the complex regulations for workers from third countries. One of our clients wanted to set up a research centre in Switzerland. However, the designated manager didn't receive a work permit for a long time, so in the end, they decided to set up in a neighbouring country. A Swiss bank located its sustainability department in Singapore for similar reasons. The Swiss rules for third country immigration are too rigid. As a result, top talent can't come here, and companies locate their innovative divisions abroad.

Dell’Anna: The examples mentioned are by no means unusual. Long-term vacancies hamper the economic performance and innovative capacity of individual companies and entire industrial clusters. Innovation only comes about through networking. Not only do universities manage to attract the brightest minds from all over the world, but this makes the whole of Switzerland more interesting for innovative companies.

Is it correct to say that an oversupply of workers and high unemployment are currently taking a toll on the economy?

Dell’Anna: Compared with other countries, Switzerland is still doing very well with an unemployment rate of 3.2% (in November). Short-time work is a very effective tool to prevent mass layoffs and to give companies some breathing space. We can't yet predict, however, whether unemployment will increase even more. In addition, temporary work is an effective means of keeping workers in the labour market and protecting them from unemployment.

Savoia: The oversupply is not the problem per se. We have to find the right people, especially in growth areas. Otherwise, we'll fall behind in the long term. Switzerland still has a relatively liberal labour market that enables companies to react quickly. However, lawmakers have an obligation to finally bring labour laws into the digital age. In general, the Swiss economy is handling the coronavirus shock relatively well, and avoiding a second lockdown has helped a lot. But there's still a great deal of uncertainty. In our comprehensive location study Power Up Switzerland, we've identified eight key areas for action that need to be tackled in a coordinated manner by the state and companies to emerge stronger from the crisis.

Are we failing to tap into the full potential that women bring to the market? They are clearly underrepresented in IT and technology professions.

Dell’Anna: If women were given more targeted support in technological and scientific subjects, it would go a long way to solving this issue of scarcity. The underrepresentation of women is related to the traditional gender roles that are still firmly entrenched in Switzerland. Women are discouraged from entering STEM careers. Switzerland does poorly here compared with other countries. Some Arab countries train almost as many female engineers as male engineers. Swiss schools should invite female engineers and pilots into their classrooms and let them talk about their jobs. This would change children's perceptions and open up new possibilities for them.

Savoia: It's imperative that women in Switzerland are better integrated into the labour market. The social and political framework in Switzerland is still not very progressive. We need more day schools and childcare options and, above all, role models. In our company, I notice time and again that it is mostly women from other countries who are very career-oriented and ambitious. However, due to the looming labour shortage, Switzerland will also need to better integrate older employees in the future. One of our studies has shown that the majority would like to work longer and retire more flexibly. In the medium term, there's no other option than to increase the retirement age.

A corresponding article was published in the NZZ on 26 November 2020. This interview is based on a conversation between the two CEOs and NZZ editor Nicole Rütti.