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WORKING IN SWITZERLAND

Why foreign workers are the focus of political debates in Switzerland right now

Immigration has always been a hot-button topic in Swiss political and economic circles, but it is becoming even more urgent now.

Why foreign workers are the focus of political debates in Switzerland right now
Foreigners are plentiful in the construction sector. Photo by Justin TALLIS / AFP

With many Swiss companies understaffed due to lack of qualified candidates, Economiesuisse, the umbrella organisation for Swiss businesses is sounding the alarm concerning the shortage of skilled labour.

“Many companies across the Swiss economy are experiencing great difficulties in filling their vacancies. And the future prospects are bleak,” said the organisation’s president, Christoph Mäder.

They are “bleak,” as Mäder pointed out, because a large number of “baby boomers” will leave the workforce in the near future — as those born in the early 1960s will retire soon.

Economists are concerned that those positions will not be filled, predicting  a shortage of 431,000 workers within a decade.

This would result in lower productivity, affecting Switzerland’s economic growth and prosperity.

More foreign workers

While various measures should be taken to counter this trend (read more about this below), economists say foreign employees are the key to filling the growing labour market deficit.

Switzerland’s dependence on foreign labour is not a new phenomenon, though the need is growing as more people are retiring.

“Immigration from the EU / EFTA is strongly geared to the needs of the Swiss economy,” according to State Secretariat for Economic Affairs (SECO). “Foreign recruitment has helped address shortages in the labour market and thus supported economic development.”

The message is clear: Switzerland needs immigrants.

So what is the problem?

In a nutshell, the problem is that the political right doesn’t agree with the government and business community that foreign workers are beneficial to the country’s economy and long-term development.

As it did numerous times before, the populist Swiss People’s Party (SVP) is getting ready to launch a referendum to curb immigration.

While no details are known,  the last such SVP attempt, in 2020, to restrict immigration from the EU / EFTA states, was soundly rejected by nearly 62 percent of voters. 

SVP’s attempts to stop the influx of immigrants on the grounds that foreigners take jobs away from the Swiss has long been disproven, but the party continues to create controversy by repeatedly bringing this issue to the forefront.

A SVP  poster by right-wing Swiss People’s Party (SVP) showing a cartoon worker wearing a belt studded with EU stars, crushing the red and white map of Switzerland with his wide rear end that translates from French as “Too much is too much!” Photo by Fabrice COFFRINI / AFP

‘Moderate immigration’

The SVP is refuting economist’s warnings about the impending labour shortages and the consequences thereof.

“I don’t know in which bubble the officials are sitting, but if we want to keep our quality of life, we have to slowly return to more moderate immigration,” SVP deputy Thomas Matter told SRF broadcaster in an interview.

Rather than boost Switzerland’s affluence, as business circles argue, “since the introduction of the freedom of movement [between Switzerland and the EU], prosperity in Switzerland has stagnated,” he added.

Economy at a standstill

On the contrary, without immigrants, Switzerland would not be as successful as it is today,” according to Valentin Vogt, president of the Swiss Employers Association.

“Construction sites would come to a standstill, while restaurants and hospitals would have great difficulty in maintaining operations,” Vogt pointed out, mentioning just some of the sectors in which many foreign workers are employed.

Therefore, the SVP’s planned referendum “will massively damage the economy,” Vogt added.

Perks and incentives
 
While the business community is trying to persuade opponents of the necessity to recruit more foreign workers, employers have already taken a number of measures to create an attractive working environment for future and present employees.

And the main element of that is better pay. 

A number of employers, especially in traditionally low-paid sectors like retail, have announced salary increases.

For instance, both Coop and Migros raised wages by 2 percent in 2023, and Denner by 2.3 percent.

Lidl has announced an even higher hike — 2.5 percent — which means that no employee of the chain would earn less than 4,500 francs a month for full-time work. 

Other companies, including Swiss Post, Swiss Federal Railways, as well as a number of pharmaceutical firms, have also upped their salaries by over 2 percent — an increase that will be given out both in terms of wages and bonuses.

Higher pay is a good incentive to attract and retain employees, but it only goes so far, since part of the increase compensates for inflation, so is not a pure gain.

But many companies also have another incentive up their sleeves.  

According to a Credit Suisse study, “in order to remain desirable as an employer in an environment characterised by a shortage of skilled workers, companies can also offer more attractive working conditions and fringe benefits”.

A majority of companies surveyed by the bank “have been recently relying on flexible working models, such as home office options or more flexible arrangements in terms of working hours,” the bank said.
 
 READ ALSO: What Swiss employers are doing to recruit hard-to-find staff 

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WORKING IN SWITZERLAND

Switzerland sees record high immigration from European countries

Switzerland has seen record immigration from European countries and a new report reveals a correlation with the country's low unemployment rate.

Switzerland sees record high immigration from European countries

Lots of data indicates that Switzerland needs foreign workers to fill job vacancies.

Now a report from the State Secretariat for Economic Affairs (SECO) confirms the importance that employees from the European Union and EFTA (Norway, Iceland, and Liechtenstein) have had for Switzerland’s labour market and economy in general. 

That is why “demand for foreign labour was strong in Switzerland in 2023,” SECO said in its annual report published on Monday, which assessed the impact that the Free Movement of Persons agreement (FMPA) has had on the country’s employment.

In 2023, 68,000 people from EU and EFTA countries came to work in Switzerland, according to SECO, driven by “employment growth that has significantly exceeded the EU average.”

Why does Switzerland need EU / EFTA workers?

Simply put, they are needed for the country’s economy to function optimally.

As SECO pointed out, while the number of pensioners is growing (due mostly to Switzerland’s exceptionally high life expectancy), “Swiss working-age population has experienced only slow growth over the past 20 years.”

“The country’s economic growth is not possible without immigration,” said Simon Wey, chief economist at the Swiss Employers’ Union. “We need foreign labour if we want to maintain our level of prosperity.”  

READ ALSO: How EU immigrant workers have become ‘essential’ for Switzerland 

In what sectors is the need for these workers the highest?

“A large number of people from the EU coming to work in Switzerland are highly qualified and are employed in demanding activities in high-growth branches of the service sector, such as the branch of special, scientific and technical activities, that of information and communication or the health sector;” SECO’s report said.

But the Swiss economy also recruits EU nationals as low-skilled labour, particularly in the hotel and catering industry, as well as construction and industry.

Why are only people from the EU / EFTA states recruited?

The reason is that, unlike nationals of third countries, people from the EU / EFTA have an almost unlimited access to the Swiss employment market, thanks precisely to the FMPA. 

Also, those coming from the neighbour countries (as most of Switzerland’s foreign labour force does), have the required language skills to easily integrate into the workforce in language-appropriate Swiss regions.
 

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