Shortage of Skilled Workers in Switzerland

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In my last blog post “Leadership in Times of Change“, I addressed challenges for the leadership of the future. One highly relevant and much discussed challenge for Switzerland is the shortage of skilled workers. That is why this post will deal with the main causes for this shortage and generic strategies on how to deal with it from a leadership perspective.

An important goal of every company is to find the right employees for the right positions. However, the shortage of skilled workers is making this goal increasingly difficult to achieve.

During the peak of the Covid-19 pandemic, the shortage of skilled workers in Switzerland eased sharply, reaching a low point in 2021. Then, when the measures to combat the pandemic were relaxed, an economic catch-up effect kicked in, causing the number of job postings to skyrocket while the number of job seekers fell. This created a historic shortage of skilled workers in Switzerland, exceeding pre-Covid levels across all major regions. There are more job postings than job seekers. Especially in the search for specialists in health professions, developers and analysts for software and IT applications, and engineering specialists (polymechanics, locksmiths, etc.), this difference has reached a record level (Adecco, 2022).

One of the Main Causes: Demographic Change

Experts see demographic change as one of the main causes of the shortage of skilled workers. The working population is shrinking and skilled workers cannot be replaced quickly enough. More and more people are retiring early as life expectancy rises. The immigration of experts from abroad to Switzerland cannot compensate for this effect; in certain sectors, it is even shrinking, even though both immigration and emigration are increasing (Barsch et al., 2018). In addition to demographic change, the situation is exacerbated by the fact that the demands on the qualifications of the workforce are higher than in the past, but the training programs have not or cannot evolve accordingly and there are more and more people in Switzerland with university degrees and fewer skilled workers.

The way in which demographic change exacerbates the shortage of skilled workers is well illustrated by the example of Germany: In Germany, the proportion of people in the labor force is reduced by about 300,000 each year for age reasons (about 3.4 % of the Swiss population). The increased birth and immigration rates in recent years cannot stop the demographic change. This requires making better use of the existing workforce potential. So what can companies do to meet their workforce needs despite the shortage of skilled workers?

Possible Strategies for Dealing with Shortages of Skilled Workers

Value-based management

Nowadays, a simple job advertisement is no longer sufficient to attract skilled workers, because applicants use a wide variety of online portals/social networks to inform themselves very thoroughly about the company and look for employers who match their values. What is important to employees today is above all self-fulfillment; bonus payments, fixed income or “super” job titles are losing importance (Janszky, 2014; Barsch et al., 2018, p. 107).

In concrete terms, employees today want more say, a good work-life balance, health care and an employee-oriented corporate culture (Barsch et al. 2018, p. 109). Self-realization and work-life balance can be implemented in concrete terms through flexible working time models, among other things.

A study by trend researcher Janszky (2017) predicts that only a maximum of 40% of employees will still work in traditional long-term employment relationships and that the number of self-employed will double, so that their percentage share of the workforce will grow to around 20%. The remaining 40% work in projects and change their employer and even the continent on which they work very quickly. It almost seems like a buzzword: “New Work” or “Work 4.0”. The terms are related to changes in collaboration and work processes in companies. New Work tears apart hierarchical structures and establishes networks in the company instead. It describes managers with temporary management assignments, working groups that collaborate specifically on an order or project basis and can then dissolve again and make their own decisions. No fixed working hours or work locations, home office and trust-based working hours are the focus. For companies, it is a major challenge to integrate all of this into processes and culture.

Focus on “soft skills” & further training

However, it is not enough to develop the company further in order to attract applicants with the right professional qualifications. Recruiting perfectly suitable specialists and managers is unlikely today, and will remain so in the future. Therefore, the criteria for applicant selection itself must change. In practice, it has been shown that companies that place a higher focus on emotional intelligence and personality fit when selecting applicants are more successful than companies that look for the applicant with the highest professional suitability (Barsch et al. 2018, p. 17). Too much focus on technical suitability can be counterproductive for companies in times of skills shortages. It is the task of companies to include induction, adaptation training and possibly even second/third vocational training in their range of offers in order to remain attractive on the market.

Retaining skilled workers

While companies pay a lot of attention to recruiting new employees, retaining existing employees is less of a focus than needed. Particularly in times of a shortage of skilled workers, employee retention takes on greater significance. It is necessary to develop more target group-oriented and individual solutions / instruments for retaining employees. These must do justice to different generations, family circumstances and specialist and management staff. On the market, a long period of time spent in a job is increasingly seen as a barrier to career and development; this must be countered, e.g. through job rotation, further training opportunities linked to new responsibilities or the loaning of employees to other companies. Employees want to prove their abilities, constantly dedicate themselves to new exciting tasks and celebrate their successes.

Compatibility of family and career

For parents with young children who want to or have to work, supplementary family childcare plays an important role in ensuring the compatibility of family and work. Around 60% of families make use of such supplementary childcare, whether through a daycare center (Kita) or through the support of grandparents, neighbors, friends, daycare families and many more. Daycare centers in Switzerland are a necessity for many working families, but the offers are not always available in sufficient numbers or cannot be reconciled with working hours. Another challenge is the cost of a daycare center. In a 2018 survey on “Reconciling Work and Family” by the Swiss Federal Statistical Office, 11% of respondents said they do not use childcare services because they are too expensive. On average, a family in Switzerland spends about 5-21% of household income on childcare. If companies want to retain qualified & motivated employees or attract new ones, the compatibility of family and work is a decisive factor and certainly a great advantage to stand out from the competition. On the one hand, through flexible work models (part-time, flexible work location, flexible working hours), on the other hand, by adapting internal company guidelines for personnel development, so that professional advancement can be made possible in coordination with family commitments. Furthermore, childcare support is relevant to enable parents to increase their workload. This support can take the form, for example, of a company childcare service or an additional monthly financial payment per child of the employee.

One of the aims of the skilled labor policy in Switzerland is to improve supplementary family childcare services (BfS, 2018).

In summary, important factors for attracting and retaining employees in the long term are the identification of clear career and development paths, a focus on soft skills in the application process, ensuring a work-life balance, and shaping value-oriented leadership in which meaningfulness, appreciation, transparency, and the individual organization of working hours are more important than status, prestige, or career.

Sources:

Perch, Peter. Gabriele, Trachsel. 2018: chief issue of securing skilled labor. Springer Gabler

Jànszky, Gàbor Das Recruiting-Dilemma, Zukunft der Personalarbeit in Zeiten des Fachkräfsmange,

Haufe Group, 2014

The Adecco Group. Skilled Worker Shortage Index Switzerland 2022

Swiss Federal Statistical Office (SFSO), 2018: Vereinbarkeit von Beruf und Familie, https://www.bfs.admin.ch/bfs/de/home/statistiken/wirtschaftliche-soziale-situation-bevoelkerung/gleichstellung-frau-mann/vereinbarkeit-beruf-familie.html

Joël Eugster
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