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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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EMPLOYMENT

Property, traffic and jobs: What a doubling of cross-border workers means for Switzerland

Over the next decade, the number of employees from France who commute to their jobs in Switzerland is predicted to increase two-fold.

Property, traffic and jobs: What a doubling of cross-border workers means for Switzerland

Currently, about 190,000 French citizens —aptly called ‘frontaliers’, which in French means ‘border people’ — commute to their jobs in Switzerland.

Data from the Federal Statistical Office (OFS) shows that the highest number — 90,000 people — are employed in Geneva. The rest work in other cantons that share a border with France: Vaud, Jura, and Neuchâtel.

However, according to the European Cross-Border Grouping (GTE) and Crédit Agricole de Savoie bank, the number of these workers “will double within ten years”, said Olivier Balima, the bank’s deputy general manager. This projection is based on demographic and economic studies, he added.

This means that by the year 2032, nearly 400,000 people from the neighbouring regions of France will be employed in Switzerland.

The reason for the increase, the two groups say, is Switzerland’s aging population, as well as continuing shortage of skilled labour in some sectors; both factors “could increase the need to call on staff from the other side of the border”

In the healthcare sector alone, an estimated at 70,000 workers will likely be needed, according to  Gabriella Taricone, head of the GTE’s employment service. In fact, at Geneva’s university hospital (HUG), 3,200 caregivers out of around 5,200 in total — 60 percent — come from France.

Many are also employed in the service industry, retail, and hotel and restaurant sector.

READ MORE: EXPLAINED: Who can work in Switzerland but live in a neighbouring country?

Historic trend

The forecast for the increase in frontaliers in next decade is not in itself a new phenomenon.

Numbers have been rising since the beginning of the 2000s, when the Free Movement of Persons Agreement signed between Switzerland and the European Union went into effect.

The treaty lifted restrictions on EU / EFTA citizens wishing to live or work in Switzerland — either permanently (permit B or C) or as cross-border commuters (permit G).

As this OFS chart shows, the number of frontaliers has risen dramatically in the past 20 years.

What impact will the increase in cross-border workers have?

Based on what we know now, the effect will likely have a three-fold effect.

Property prices

As The Local reported on June 3rd, the Léman Express, a train linking the Geneva region with neighbouring French towns to provide a quicker commute for cross-border workers, has caused property  and rents on both sides of the border to rise sharply.

In the vicinity of the train’s 45 stations, real estate prices soared by 8 to 9 percent on average — a sharper increase than elsewhere in the region.  

Prices went up in the French departments of Haute-Savoie and Ain, as well as in Swiss cantons of Geneva and Vaud, all of which lie along Léman Express’ 230-km track.

READ MORE : How a cross-border train has pushed house prices up in Switzerland and France

Based on these facts, it is within a realm of possibility (and even probability) that the same trend will continue as more workers from France become employed in Switzerland.

Traffic jams

Frontaliers already create bottlenecks at and near border crossings during peak times, and the situation will likely worsen with even more people coming and going to and from France.

While in terms of traffic Geneva is by far the worst in Switzerland, other border areas are impacted as well.

For instance, in canton Jura, which lies on the Swiss side of Doubs department in the Bourgogne-Franche-Comté region in eastern France, cross-border commuters are creating congestion at several border crossings.

‘Brain drain’

This expression means the departure of trained or qualified people from a particular country — in this case, France.

While Switzerland benefits economically from the presence of cross-border workers, France — not so much.

This poses a problem for French companies located near the border, as they can’t find any personnel.

There have been many instances of French officials and employers complaining about their local workforce leaving in droves to work for a higher pay across the border.

One example is officials in the Haute-Savoie accusing private Swiss health clinics of ‘poaching’ essential healthcare workers during the Covid pandemic.

In another case, Jean Benoît-Guyot, who runs a plumbing business in the French commune of Saint-Julien-en-Genevois, which is located right on the border with the canton of Geneva, can’t find any employees to hire as “everyone wants to work in Switzerland”.

This disparity in Swiss and French wages was also made clear by another French citizen, Kévin Lecoq, who makes a daily cross-border trek to the Swiss canton of Jura..

“If we add up everything that has to be paid in taxes, we still have one and a half times the French salary”, he told The Local.

This article explains how this “exodus” affects French regions, and is likely continue to have a negative impact as numbers of cross-border workers continue to grow.

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

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