Playing Our Cards Right
An aging society is burdening our social welfare system, digitalization is continuing, a lack of skilled workers is becoming the new normal: The world of work is undergoing radical changes. But Switzerland is in a favorable position.
There is no denying that Switzerland's labor market is experiencing a period of upheaval that exceeds anything we have seen in generations. Economic conditions have rarely been more challenging. A strong Swiss franc is causing headaches for the export sector. Historically low interest rates are endangering retirement capital. With the acceptance of the mass immigration initiative, an already difficult situation has become even more challenging. Even more than the strong franc, restrictions on hiring qualified foreign workers represent a serious long-term problem for Switzerland's most important industries.
Without foreign workers, the Swiss economy will contract – something that is happening in any event, owing to demographic trends. Switzerland's baby boomers will reach retirement age between 2020 and 2035. The share of over-65-year-olds will increase by 84 percent. According to the Swiss Federal Statistical Office (SFSO), 2.7 million people over age 65 will be living in Switzerland in 2045. That figure was only 1.5 million at the end of 2014.
Beginning in 2017, more people will retire each year than reach working age. According to a study conducted by the University of Basel, by 2030 an additional 500,000 workers will be needed to maintain our current two-percent level of economic growth. By 2060, we will have a gap of between 800,000 and 1.4 million workers. Given these demographic trends, economists believe that meeting the demand for labor domestically will be impossible, even if the labor force participation rate were to increase dramatically. For the past ten years, it has still been possible to compensate for a lack of skilled workers in Switzerland by recruiting workers abroad. However, the supply of workers from Germany – Switzerland's preferred source – is gradually running dry. By 2017, more people are expected to be returning to Germany than will be immigrating to Switzerland. So Switzerland will have to attract more qualified workers outside of the German-speaking countries and even outside of the EU.
Fundamentally Rethinking Our Approach
The fact is that we need a business-friendly immigration policy. We need to take an unbureaucratic approach to implementing the mass immigration initiative. It won't be helpful to impose industry-specific limitations; instead, we should focus on certain occupational groups. The IT sector is not the only one looking for computer scientists, for example; banks and insurance companies need them as well. It is rarely possible to hire highly qualified job candidates immediately – the process of recruiting them takes time and money. And when a company lures a worker away from a competitor, that creates a vacancy elsewhere.
Talent migration is one of Switzerland's key advantages.
Nicole Burth Tschudi
Entrepreneurs, too, need to rethink their approach. They need to attract, support and retain women, career changers, older employees and talented young people – by offering innovative and flexible workplace models like job sharing, home office work, so-called "career arc" programs that allow older workers to gradually relinquish some of their responsibilities, and part-time positions for mothers and fathers. They need to develop and implement further training programs. Companies should be diverse in terms of age, gender, and geographic and cultural background.
The Corporate Tax Reform III program was designed to stimulate the economy. Switzerland is attracting high-tech companies in the pharmaceutical, medtech and biotech industries that employ experts from all over the world. They are accustomed to putting together international project teams, and they are in constant search of talent. For the third time, Switzerland has been ranked first in the Adecco Group's Global Talent Competitiveness Index, and it is well positioned to compete for the finest minds. Talent migration is one of Switzerland's key advantages.
What needs to be done?
Switzerland's lack of skilled workers is concentrated primarily in the STEM fields (science, technology, engineering and mathematics) and the health care sector. By 2022, there will be a deficit of roughly 87,000 qualified workers in the field of information and communication technology. According to the latest estimates from the University of Basel, new graduates will be able to fill approximately 34,000 of those positions. If immigration rates remain at their present level, there will still be a deficit of 13,800 skilled workers in this sector in 2022. The situation is even more serious in the field of health care. Each year, we fall short by approximately 4,600 in training the people who will be needed to meet the demand in 2020.
What to do? It is important to encourage interest in mathematics and technology, as well as to promote language skills, when children are still in elementary school or even preschool. Professional development and retraining opportunities should be expanded. These should be targeted particularly at low-skilled workers (roughly one-fifth of Switzerland's working population), only a third of whom pursue further training. In the education and health care sectors, women should be encouraged to enter the workforce as part-time workers or to increase their work hours.
Over the next few years, companies will undergo profound changes. Jobs that require few skills, such as operating machinery, will be eliminated. High-skilled jobs, for example in 3D printing, are the wave of the future. Well-known business consultant Roland Berger points out that while traditional industrial jobs will be lost, up to 10 million new jobs will be created in Western Europe – particularly in the service and IT sectors.
Sixty percent of young people will have a job that doesn't even exist today.
Nicole Burth Tschudi
Digitalization and the fourth industrial revolution refer to the use of internet technologies for communications between human beings, machines and products. Industry 4.0 technologies will spread rapidly over the next few years. Digitalization will be an important tool for easing the effects of demographic change, and this represents an opportunity for Switzerland.
Work-Life Balance Increasingly Important
Job loss and the threat of unemployment will take on a new significance in the coming decades. Job security will be redefined, and work-life balance will become more important; people need to be able to reconcile the demands of their career and family, job and personal life. There will no longer be such a thing as a job for life – in contrast to the baby-boom era. Sixty percent of the young people who will enter the workplace in 2025 will have a job that doesn't even exist today. By 2030, according to futurologist Horst Opaschowski, one in two employees will no longer have a full-time position. There will be fewer permanent jobs. Rather than hiring regular employees, more companies will be contracting online with workers all over the world who happen to have time and are able to provide the best performance at the best price.
Day-to-day experience with computers, smartphones and the internet has a substantial impact on digital skills. According to the consulting firm Accenture, such skills are particularly useful for women, as they permit them to use their time more efficiently and to be more productive. Digitalization makes work more flexible, so that it no longer has to be performed at a specific time or place. Twenty-five percent of jobs benefit from "hyperconnectivity," or unlimited data traffic: It no longer matters when or where you do your work.
A Key Factor: Digital Skills
Landing a permanent position requires independent thinking, social skills, persuasiveness, creativity, flexibility, an entrepreneurial spirit, openness to lifelong learning and the ability to adjust to new things.
In the coming years, digital skills will be a crucial career factor. According to Accenture, 44 percent of rapidly growing companies are relying on temporary teams, and 86 percent are taking advantage of increased cooperation within the company to improve performance. This results in better feedback, more ideas and innovations at every level. Companies will need to put such ideas into practice in order to attract, support and retain women, older employees and talented young people, for example by offering further training programs and innovative job models.
Switzerland's labor market is facing major challenges. But the country is in a good position to safeguard its prosperity in a digitalized world. We need to play our cards right, however, if our labor market is to maintain its attractiveness and succeed in competing for the best minds.