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.
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 Peoples 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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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.
‘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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