French-speaking Switzerland, like the rest of the country, is facing a severe labor shortage. At the national level, open positions make up 2.2% of all jobs, marking a two-decade high. In French-speaking Switzerland, that figure is slightly lower, at 1.8%. The tight employment market may be the price to pay for a thriving economy and strong job creation. With jobs up 24.6% nationally and 33.3% in the French-speaking region from 2002 to 2022, Switzerland has outperformed its neighbors and most other industrialized countries. Demand for workers has been met by population growth, particularly from immigration. However, as baby boomers retire the job market may become lastingly tight. 30 October 2023 – Hiring difficulties have become a major concern for companies. The 16th edition of the study on French-speaking Switzerland’s GDP, published by the region’s six cantonal banks in collaboration with the Forum des 100 (an annual conference held by Swiss newspaper Le Temps), examines the consequences of the country’s more than 120,000 job vacancies, with 25,000 in the French-speaking region.
Hiring troubles are the flip side of an economy in full employment. In September, unemployment in French-speaking Switzerland stood at 3.0% (2.0% nationally), the lowest it has been in the past two decades.
Secondary sector most affected
In absolute numbers, there are more unfilled positions in the tertiary sector (93,000 nationally) than in the secondary sector (32,000) because services make up such a large share of the Swiss economy, employing 70% of the working-age population. But job vacancy rates tell a different story: 2.8% of jobs were open in the secondary sector in Q2, versus 2.1% in the tertiary sector. While regional data is not available, various indications suggest that this trend holds true for all regions. In the secondary sector, manufacturing was the hardest hit, in particular the electronic and watchmaking industries (4.0%). In the tertiary sector, IT and information services (3.6%), hotels and restaurants (3.0%), and information and communications (3.1%) had significantly higher vacancy rates than the average.
The shortage primarily concerns skilled labor (workers who have completed advanced vocational training, a higher-education degree, or an apprenticeship). A quarter of businesses report having struggled to recruit skilled workers or having been unable to do so. There is also an increasing shortage of unskilled labor (workers who have completed only compulsory education). While not as pronounced as with skilled labor, the shortfall still affects 8% of companies.
No end in sight
According to projections from the Federal Statistical Office, immigrants and young people entering the job market will be less and less able to fill the workforce gap created by retiring baby boomers. As a result, the working-age population will grow much more slowly, while there are no signs of a change in the job creation trend (job growth has averaged about 1% per year over the past few decades). If the gap between jobs and working-age population continues to grow, in 10 to 15 years it could reach the equivalent of 500,000 vacancies nationwide, with about 150,000 of those in French-speaking Switzerland.
However, it is likely that economic growth and job creation will slow once vacancies reach a certain level. Other factors may also hinder growth, such as the global economic slowdown in the short term and the rise of protectionism and geopolitical tensions in the long term. Population growth could also be higher than expected, as has often happened, leading to a less dire job vacancy scenario. However, recruiting skilled workers will almost certainly become harder in the future, as the underlying trend of retiring baby boomers will not be easy to offset.
