Baby boomers are retiring. This is exacerbating the shortage of skilled workers.
The baby boomer generation is retiring. And because at the same time fewer young wage earners are taking their place, the shortage of skilled workers in Switzerland will intensify. One sector is being hit particularly hard by this demographic trend.
A wave of retirements is sweeping Switzerland
The number of retirees in Switzerland will rise dramatically in the next few years. The annual number of new retirees will climb from between 70,000 and 90,000 to well above 100,000 people per year. Over the next ten years, 1.1 million people will reach retirement age, with the wave hitting its peak in 2029 at just under 125,000 new retirees.
The reason behind this is the baby boomer generation. In Switzerland, this includes people born from 1946 to 1964. During these years, a particularly large number of babies were born. World War II had just ended, and the economy was thriving. The birthrate rose to 2.7 children per woman. Even when taking into account the period from 1941 to 1974, the birthrate was particularly high. In contrast, the average number of children has hovered around 1.5 per woman since the late 1970s.
Demographic trend exacerbating shortage of skilled workers in Switzerland
This wave of retirements by the baby boomer generation will impact the Swiss labor market. After all, even if not everyone approaching retirement age is currently active in the labor market, it is still presumed that nearly 800,000 people currently in the workforce will stop working over the next ten years. On top of this, far fewer young people are joining the labor market. At the peak in 2029, some 18,500 more wage earners will leave the labor market than will be replaced by new ones. This could lead to personnel shortages.
Demographic trend has varying impact on sectors
Not all sectors are affected by this to the same extent, though. A particularly large number of retirements will occur in agriculture and forestry. Nearly 35% of the workforce in this sector belongs to the baby boomer generation. If we include all years with a large number of births, this figure even reaches 61.8%.
Older workers also make up a disproportionately large percentage in administrative and social services, traditional industry, and the transportation and transport sectors. One out of four people in these sectors is a member of the baby boomer generation, and one in two was born in a year with a high birthrate. By contrast, the workforce is significantly younger on average in the financial services sector as well as the information, communication, and IT sectors.
Shortage of skilled workers is particularly severe in the health sector
The extent of the shortage of skilled workers in each sector depends on additional factors, however, particularly on the sector's growth prospects as well as the margin for improving efficiency and automation. The administrative and social services sector, which includes healthcare, is poorly prepared. Aside from relying heavily on the baby boomer generation, this sector is exhibiting strong growth dynamics that are likewise the result of demographic developments. There is also less potential for automation than in other sectors, at least at the current state of technology.
This raises the question of how companies can counteract the shortage of skilled workers. One option would be to keep employees on the payroll beyond their retirement age. This rarely happens in reality, though. First, only a minority of Swiss companies are willing to do this. And second, the interest of seniors is rather low. According to a survey, however, those companies that are already anticipating high demand for staff as a result of the wave of retirements are banking on continued employment more than the average company.