The Swiss Labor Market in 15 Years
Healthcare and social services is expected to be Switzerland's largest employer after the trade, transport and logistics sector by 2030. According to our simulations, industry will shrink by 100,000 jobs.
There were around 3.6 million FTEs in Switzerland at the end of 2014. One in six employees worked in industry and one in eight in healthcare and social services. This weighting is set to alter significantly in the next 15 years, just as it has also done in the past 15 years. At the turn of the millennium, only one in ten FTEs was in healthcare and social services and one in five still worked in industry.
We forecast that in 2030 only one in eight will work in industry and instead one in six will be employed in healthcare and social services. Our forecast model is based on both past employment development and our assumptions concerning the development of the overall population and participation rate up to 2030. In the case of healthcare and social services we expect an increase of almost 200,000 jobs or around 40 per cent. For industry our model predicts a reduction of 100,000 jobs. The model also foresees a relatively strong expansion in services such as management consulting and in information technology (IT) and the financial sector.
Financial Services Providers Are Expected to Grow Less Strongly
Our model forecasts a positive development for financial services providers. At least in the medium term, however, the qualitative opportunities/risks analysis of our industry experts predicts a less dynamic development. The ongoing digitalization of banking and insurance services will in itself serve to curb growth versus the model forecast. For administrative services, the model predicts growth of almost 10,000 jobs by 2030. We consider this to be realistic, especially as population growth, the key driver of job growth, is expected to level off in the next 15 years. In view of the opportunities/risks profile of our industry experts, we consider the model forecasts for healthcare and social services that were mentioned at the start to be plausible, at least in the medium term. However, fundamental transformations in these and other sectors cannot be ruled out over the next 15 years; they might even be necessary in order to guarantee the survival of a sector.
Insurance Sector Increased Value Creation Entirely through Productivity
Insurance, for instance, has undergone an impressive transformation. Owing to the liberalization of the market in the 1990s, pressure increased on insurance providers who thanks to advances in information technology and partly also thanks to the outsourcing of subtasks have been able to achieve enormous productivity gains. Value creation in the insurance industry rose by around 170 per cent between 1990 and 2014 while employment fell by 15 per cent. The growth of gross earnings creation in the insurance sector can thus be attributed entirely to productivity gains.
In Healthcare, the Supply of Labor Is Becoming Too Scarce
By contrast, there were only small productivity gains in healthcare and social services over the same period. As the illustration shows, the increase in value creation in the past is mainly attributable to a rise in employment. Productivity enhancements in this sector of the economy that relies heavily on the supply of labor cannot be expected on the same scale as in industry, at least in the medium term. However, the supply of labor is becoming too scarce in view of the ongoing high demand for healthcare services, which therefore calls for a restructuring of the sector. According to the Swiss Federal Statistical Office, to fill around a quarter of the vacancies for persons with advanced vocational training and graduates is today already only possible with difficulty if at all. This shortage is expected to worsen, not least as a result of the acceptance of the initiative against mass immigration. Owing to the consequent shortage of labor, productivity enhancements in healthcare and social services will be essential in the long term.