Spring/Summer 2024 Switzerland Labour Market Analysis: Optimising the Workforce Amidst Slowing Growth

With Switzerland a still-bustling global hub for business and research, the economic forecast looks solid as we move into Q2 2024, with low unemployment and declining inflation. However, slowing GDP growth and talent shortages in several key sectors are challenges organisations continue to grapple with.

Our comprehensive "Spring/Summer 2024 Europe Labour Market Report” explores the intricate dynamics shaping the Swiss market. Here’s a high-level look at the landscape:

Macro Environment

The Swiss economy was relatively resilient throughout the pandemic, thanks to its specialisation in the financial sector and the chemical/pharmaceutical industries. In early 2023, the Swiss economy continued to perform well despite the general downturn experienced by other major economies in Europe, but it lost momentum in the latter half of 2023, as manufacturing and services (the country’s largest economic sectors) recorded negative growth.

The outbreak of war in Ukraine led to a sharp increase in energy prices, impacting inflation rates across Europe. But while Switzerland saw a rise in inflation, the impact was more muted, with a 2.84% increase in 2022. As energy prices decreased in 2023, so did inflation, with a YoY rate of 1.4% in November 2023.

Despite global macro-economic trends, Switzerland continues to enjoy virtually full employment, with the State Secretariat for Economic Affairs (SECO) reporting an unemployment rate just over 2% in 2023 and only a minor increase forecasted for 2024 and 2025.

Skills in Demand

Switzerland is one of the most competitive economies in the world with a strong services sector, accounting for roughly 96.5% of Switzerland’s Gross Domestic Product (GDP). The services sector also employs 97% of the Swiss workforce, with the next highest sector being agriculture at 2% of workforce employment.

One sector within the manufacturing industry that has seen huge demand recently is the mechanical engineering, electrical and metal industry (MEM), which has seen a significant increase in job advertisements. According to Magnit data, the most requested skills in the MEM sector are engineering, data analysis and manufacturing, with the fast-growing skills including agile method, sales operations and technical support.

Looking at Magnit data from a broader country-wide perspective, the following skills are in high demand in Switzerland:

• Most Requested Skills: Analytical skills, manufacturing, cloud computing, information tech, software development
  
• Fastest-Growing Skills: Customer experience/satisfaction, analytical skills, B2B sales, CRM, data processing

Other Trends

Over the past decade, Swiss workers have witnessed an average annual real-term wage growth of 0.3%. As the aging population retires and fewer young individuals enter the workforce, companies offering higher starting wages are likely to fare better. The demand for skilled workers is expected to outpace supply, posing challenges in talent recruitment and retention.

In addition to competitive salaries, Swiss employees highly value flexible working arrangements and a positive work-life balance. A survey conducted by Employees Switzerland revealed that 66% of respondents would reject a job offer if it adversely affected their work-life balance, while 83% considered flexible working hours crucial when evaluating job opportunities.

Get the Full Report

Our new “Spring/Summer 2024 Europe Labour Market Report” also includes bill rates for key job titles in Switzerland, as well as exploration of high-level trends across Europe. Beyond this broader analysis, we also dig deeper into the economic landscape in the UK, Ireland, Sweden, the Netherlands and Germany. For much more, download the report now.

Disclaimer: The content in this blog post is for informational purposes only and cannot be construed as specific legal advice or as a substitute for legal advice. The blog post reflects the opinion of Magnit and is not to be construed as legal solutions and positions. Contact an attorney for specific advice and guidance for specific issues or questions.