New solutions are needed for the shortage of skilled workers

The number of vacancies in Switzerland has been growing for months. In October 2022, the labor market data company x28 had recorded over 260,000 vacancies. At the same time, there is a growing shortage of qualified workers: The Skilled Worker Shortage Index published by Adecco and the University of Zurich reached its highest level ever recorded at the end of 2022.

Why is there such a shortage of qualified workers? This cannot be explained solely by the rapid economic recovery after the Corona pandemic. After all, the skilled labor shortage index is significantly higher than it was in 2019 before the pandemic.

It's because more people have been retiring since 2019 than young ones have been coming in. And because of the baby boomers who are now entering retirement age, the shortage of skilled workers will continue to increase over the next few years. The recruitment agency Dynajobs expects a shortage of 365,000 skilled workers across Switzerland by 2025.

New solutions needed

Until now, many Swiss companies have recruited missing skilled workers from abroad. But this no longer works, because they are also urgently needed in other countries.

If the shortage of skilled workers is to be effectively countered, there can be no taboos. What is needed are new solutions. Three possible approaches:

1. An offensive of further training.
2. Higher compensation for outside childcare.
3. Incentives for older employees to remain in the workforce, possibly beyond retirement age.

An offensive of further training

Switzerland must make better use of the available human resources. This means that the skills of the workforce must be specifically matched to the requirements of companies and organizations. To achieve this, an offensive in further training is needed.

This opens up new opportunities for employees. The concept is called upskilling: If you continuously improve your skills and learn throughout your life, you will advance professionally. You can cope better with the demands of the new world of work if you have acquired new skills, especially in the digital field.

Employers are also challenged. Because companies are still investing too little in the continuing education of their employees. This is not only the opinion of independent experts, but also the conclusion of the companies themselves. Six out of ten HR managers surveyed by the outplacement provider Rundstedt for the report «Skilled Worker Shortage in Switzerland» recognize a deficit in further training.

Financing external childcare

The cost of childcare in Switzerland is exceptionally high. As a result, a second income or a larger workload are not attractive for many couples with young children. This is because the expenses for childcare eat up the additional income. Why is that? In our country, the public sector spends significantly less money on daycare centers and day families than in other countries.

There is no shortage of solutions to improve the labor force participation rate of female workers in particular. Families should be allowed to deduct childcare costs from their taxes at the federal and cantonal level. There should be a legal right to a childcare place. Or a state fund should be created from which a large part of the childcare costs would be paid.

Staying in the work process

Many employees leave the workforce at the age of 60 or earlier. Some voluntarily, because they can afford early retirement. Others because they lose their job or are forced to do so by the company. Especially for older employees who leave the workforce involuntarily, further training and retraining are key to staying fit for the job market.

But that alone is not enough. Those responsible in the companies have to rethink. Because despite the shortage of skilled workers, older candidates are disadvantaged when it comes to recruitment. This is the opinion of two-thirds of the HR managers surveyed by Rundstedt in German-speaking Switzerland; in Ticino and French-speaking Switzerland, the figure is over 80 percent. And almost half of the respondents still have reservations about applicants who are 58 or older.

Working beyond retirement age

Many employees would actually like to work beyond retirement age. The consulting firm Deloitte estimates that 40 percent of 50- to 70-year-olds would like to work longer. Extrapolated to all employees, this corresponds to around 600,000 people.

In fact, significantly fewer employees are working beyond retirement age - around 90,000 people, according to the Federal Social Insurance Office. This also has to do with the incentives in place. Those who work longer in Switzerland today continue to pay contributions to AHV, IV and EO. There is no quid pro quo for this - the amount of the pension remains unchanged. This will be corrected somewhat with the latest AHV reform: From the beginning of 2024, when the reform comes into force, people with low incomes or with contribution gaps will be able to supplement their pensions if they work after 65 and pay AHV contributions.

Defusing the shortage of skilled workers

Targeted training programs, government support for childcare and new incentives for older employees are all tools that can be used to alleviate the shortage of skilled workers. The challenge is for companies and policymakers. It is up to them to implement sustainable solutions.