HR Today, Full employment & skills shortages
Erik Wirz of Wirz & Partners in an interview with HR Today
Full employment. Or is it?
The Swiss labour market is booming: for the first time in almost eleven years, the number of unemployed has fallen below the 100,000 mark, the State Secretariat for Economic Affairs (Seco) reported this week. But as is so often the case, all that glitters is not gold.
Mr Wirz, economists define an unemployment rate of 2-3% as full employment - how do you define full employment?
Erik Wirz: We look at full employment with a bit more nuance. In our view, the long-term unemployed and those who have exhausted their unemployment benefits should also be included in the statistics. This would give a more comprehensive picture than is often considered today.
A continuing "upswing in the Swiss economy" is cited as the main reason for the positive labour market figures - so are things really going well in Switzerland?
Since decoupling from the euro in January 2015, the Swiss economy has done more than just recover. Many companies have focused on the concept of the extended workbench after decoupling from the euro, making them more internationally competitive.
Following the initial strong appreciation and the associated economic uncertainty, there was an investment backlog in many industries. In recent years, however, this backlog has been reduced and, together with corresponding economic growth, has led to a significant upturn.
Low unemployment and a healthy economy - it all sounds fantastic. Why do you think we should still be cautious?
In addition to the well-known economic theory of the business cycle, we believe that there are still latent structural challenges in the EU. The prolonged low interest rate environment is causing disruptions that cannot be foreseen at present. The geopolitical situation also brings some uncertainties.
Another statement often heard in the media is: "As unemployment falls, the labour force becomes scarcer". Do you share this view?
In theory this may be true, but in the case of Switzerland the perspective is not broad enough. As I mentioned earlier, Switzerland's "workbench" is no longer limited to the local labour force. More and more companies are using hybrid sourcing models that allow them to adapt quickly to market conditions, both in terms of cost and scalability.
Speaking of skills shortages, one of the measures that has been introduced is the obligation to report job vacancies. Do you think this is effective?
As an executive search firm working in the digital and life sciences sectors, skills shortages are a constant challenge.
The reporting requirement can certainly be a tool to bring more transparency to the local market, but it does not affect the profiles we are looking for.
Let's make a prediction for the future: Where do you see the biggest challenges for the Swiss labour market?
As a knowledge society, it will be our task to adapt and improve the education system and to ensure that we continue to be internationally leading in the most relevant technologies.
Artificial intelligence will change our working world in the coming years, so the content and objectives of the education system will also have to change. Switzerland currently has some leading universities, such as ETH and EPFL, which are among the best in the world. It is crucial for the well-being of our society that we pay sufficient attention to the impending challenge of transforming the education system.
Where do you see opportunities?
The recruitment industry is always a leading indicator of the economy. We see significant opportunities in the proven adaptability of our economy. In addition to the large international companies headquartered in Switzerland, which make Switzerland an internationally attractive location for qualified international professionals, it is above all the medium-sized companies that show great agility and skill in reinventing themselves time and again.
Many people fear digitalisation: will I lose my job? Will I be made redundant by automation? Think back to the last major industrial revolutions: steam power, electricity. Both have contributed consistently and widely to improving quality of life and overall prosperity. Harnessing the potential of digitalisation will be one of the most important factors in the future development of the Swiss economy.
