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How the Swiss job market rebounded from the Covid pandemic

The pandemic wreaked havoc on economies and employments of many countries, but Swiss labour market bounced back quite well. Why is this so, and in which region is the recovery strongest?

How the Swiss job market rebounded from the Covid pandemic
Zurich: Swiss champion in terms of jobs growth. Photo: Pixabay

Even though the health crisis plunged Switzerland’s economic activity into a slump, the country’s economy proved to be more resilient than other countries’, according to research carried out after the first wave in August 2020.

There are several reasons for this phenomenon. Firstly, Swiss economy was already sturdier than many others before Covid struck, so was in a better position to withstand the crisis.

Additionally, the government-run insurance scheme paid out most wages to people on shortened work hours, in addition to loans and grants issued to struggling companies.

But Switzerland was also one of the very few countries that have been able to attract international companies to its shores even in the midst of the pandemic, which translated into more jobs for the local workforce.

Experts believe this is due to the country’s strengths, including political, economic and financial conditions.

“Even in a time of crisis, Switzerland scored thanks to its stability, predictability and security”, said Patrik Wermelinger, member of the executive board of Switzerland Global Enterprise (SGE), which promotes the country abroad on behalf of the federal government and the cantons.

There are other reasons as well that had prompted foreign companies to come to Switzerland during the pandemic.

“Protection of legal rights, freedom, and personal responsibility are stronger in Switzerland than in many other countries, even in times of pandemic”, said SGE’s co-president Walter Schönholzer.

Also, “the Swiss economy was able, more than many other countries, to work remotely. With the exception of the hospitality and construction sectors, the other branches of the economy have functioned at least 60 percent”, according to Arturo Bris, director of the Competitiveness Centre at International Institute for Management Development in Lausanne.

And yet another reason why many people kept their jobs during the pandemic is that Switzerland continued, though at a lesser scale, to export its goods.

“Switzerland is a country that functions well in normal times, but it excels in times of difficulty”, Bris added.

That has been  the overall situation, but which Swiss regions are doing better than others in terms of employment, and why?

Even though Zurich, along with other large Swiss cities like Geneva, Basel, Bern and Lausanne, have been hit hard by the pandemic from the employment perspective, Zurich’s labour market is now growing faster than in other urban centres.

READ MORE: How hard is finding work in Zurich without speaking German?

One of the reasons for this upward trend is that young, well-educated foreigners are coming back.

In the first nine months of 2021, the city’s population grew significantly. In September alone, it recorded 2,200 additional residents.

This is mainly due to people with a B residence permit, according to Klemens Rosin, methodologist at Zurich’s Statistics Office.

During the crisis, far fewer of them left the city. “This group is made up of well-educated, younger and mobile foreigners who have made a significant contribution to Zurich’s growth”, Rosin said.

Zurich’s employment market is expect to grow even further.

That’s because in the coming years, many Zurich  workers will retire — an estimated  210,000 by year 2050 — creating more job opportunities for younger employees.

In fact, according to a study commissioned by the canton in 2021, if Zurich’s economy is to continue to flourish, it will need around 1.37 million workers by mid-century.

If these vacancies will not be filled, then income, tax revenue and the financing of social security programs will be impacted.

READ MORE: Have your say: What’s the best way to find a job in Zurich

While it is difficult to predict what jobs will be most in demand in 2050 — what new technologies will emerge in the meantime — right now and in medium term, IT workers will be especially needed, experts say, because businesses will continue to to digitalise and automate.

Lower skilled jobs will also be in higher demand, including hospitality, retail and transport. 

With hundreds of thousands of vacancies to fill, people with the permission to work in Switzerland are likely to be flush with offers – particularly skilled workers with recognised qualifications. 

READ MORE: Why finding a job in Switzerland is set to become easier 

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CROSS-BORDER WORKERS

Switzerland and France further extend tax benefits for cross-border workers

Switzerland has again extended a set of beneficial tax arrangements for cross-border workers living in France until November, although not everyone is happy.

Switzerland and France further extend tax benefits for cross-border workers

The rules were originally put in place during the Covid pandemic, when various laws and regulations in Switzerland and elsewhere encouraged people to work from home. 

Alongside these rules, the Swiss and French governments changed the underlying tax rules to encourage people to work from home. 

These rules were originally put in place in March 2020, but have been extended several times and will now expire on October 31st. 

What are the rules? 

Under normal circumstances, anyone living in France who works in Switzerland can spend no more than 25 percent of their time working from home. 

READ MORE: Why French cross-border workers choose to work in Switzerland

If they exceed this time limit, they would have to pay social security contributions and tax charges tin France rather than in Switzerland, which would be much higher.

The agreements between France and Switzerland – along with several other countries where people resident in France work like Belgium, Luxembourg and Germany – “provide that days worked at home because of the recommendations and health instructions related to the Covid-19 pandemic may … be considered as days worked in the state where [workers] usually carry out their activity and therefore remain taxable,” according to the statement from the French Employment Ministry.

In June, cross-border worker advocates called for the agreements to be extended. 

Companies in France’s Haute-Savoie region, where most of cross-border workers employed in Geneva come from, are upset, claiming that home-office agreement makes working in Switzerland even more attractive for French workers, at the detriment of local businesses.

According to Christophe Coriou, head of the Haute-Savoie section of French employers, “these agreements accentuate the competitive disadvantage” of French companies compared to Swiss jobs — in terms of salaries, but also lower taxes and other perks.

“By emptying them of their human resources, Geneva penalises companies in Haute-Savoie”,  Coriou  said, adding that “teleworking of cross-border workers, which is perceived as an additional attraction to the salary, accentuates the competitive disadvantage of companies in neighbouring France”.

What about other countries? 

Switzerland is heavily reliant on cross-border workers, with an estimated 340,000 crossing daily from France, Germany and Italy into Switzerland to work. 

About 90,000 workers from France are employed in Geneva, but there is no official data on how many still work from home.

Italy and Switzerland signed an agreement relating to cross-border workers in March.

Germany also has its own agreement with Switzerland. 

More information about the rules in place can be found at the following link. 

EXPLAINED: What cross-border workers should know about taxation in Switzerland

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