Von Rundstedt labor market - Barometer 2024

However, the shortage of skilled workers in certain areas remains critical. Traditional labour market patterns are also emerging, with increasing polarization between different age groups and professions and a return to pre-corona levels of mobility across sectors and functions.

Economic forecasts suggest that conditions on the labour market will continue to normalize in 2024 and become somewhat more sober. Market-related restructuring and fluctuation in general will increase again.

This Barometer 2024 covers the whole of Switzerland and is based on information from 2,182 employees affected by redundancies and 223 companies from various sectors that had to make redundancies in Switzerland in 2023. It therefore provides a representative picture of the Swiss labor market as a whole in 2023. The following is an overview of the most important findings:

More restructuring and staff reductions

There is more movement in the labor market. Fluctuation is once again happening in both directions: companies are not only looking for people, they are also making more redundancies. In a sector comparison, the pharma/life sciences sector was the most affected by redundancies. After 17% (2021) and 26% (2022) in previous years, this sector even accounted for 30% of redundancies in 2023. The pharmaceutical industry is feeling the increasing pressure from abroad and is reducing capacities in Switzerland and adapting structures accordingly. The financial sector is surprisingly less affected. At just 15%, fewer redundancies were announced in 2023 than expected. However, this may change in the coming months, especially as the extent of the downsizing as part of the UBS/CS restructuring will not become apparent until 2024.

Management and support functions most affected

Employees in management and support functions were relatively heavily affected in 2023. For example, 37% of all redundancies related to non-operational functions. In the previous year, this figure was only 29%. A comparison of hierarchies also shows that senior managers are more affected than specialists. The number of executives (new 17%, previous year 12%) and management (new 34%, previous year 23%) affected has risen sharply, while the number of specialists (new 22%, previous year 38%) has fallen in relative terms. This shows the general trend that structural adjustments and streamlining at companies are not primarily carried out in operational functions, but in the support and management area.

The old patterns are returning

Due to the economic shortage of skilled workers in the growth-driven years of 2021 and 2022, certain typical patterns of the Swiss labor market have receded somewhat. Older employees and weaker profiles have also benefited from the strong labor market of recent years. However, these old patterns will return with the normalization in 2023. 80% of redundancies affected employees aged 40 and over, with the 40-50 age group (41%) being more affected than the over-50 age group (39%) for the first time. In contrast, only 2% of redundancies were among employees under 30. The age phenomenon is also clearly evident in the duration of searches. The search duration for younger employees under the age of 30 has fallen to 3.1 months (previous year 3.4 months). The search duration has increased for all other age groups, most notably for 30-40 year olds (now 5.6 months, previous year 4.2 months). Since 2022, the flexibility of companies in recruiting applicants from other sectors has also decreased again. The generally strong industry cult in Switzerland is becoming more noticeable again. The proportion of successful industry changes has fallen back to pre-corona levels, namely to 43% (after 52% in 2021 and 48% in 2022). The return of these old patterns shows that in 2023 the pressure of the cyclical skills shortage has decreased significantly and companies are only willing to be more flexible in the specific areas of structural skills shortages.

Younger employees are the winners

Various parameters show that younger employees are clearly among the winners in 2023. At 2%, they were hardly affected by redundancies. If they are looking for a job, they find a new position very quickly. On average, they only need 3.1 months to do so (overall average across all age groups 6.1 months). And they also benefit most from salary increases when changing jobs. With an average increase of 13% (previous year: 9%), they recorded by far the largest salary increase following a job change. In comparison, the average salary increase across all ages when changing jobs was 3%.

Longer search time, but not for everyone

For the first time since the coronavirus crisis, the job market has become more difficult for jobseekers. This is shown by the duration of job searches. After 5.3 months (2021) and 5.2 months (2022), the average search duration rose again to 6.1 months in 2023. This increase affects almost all age groups. The over 50s have a search duration of 6.6 months, the 40-50 year olds 6.0 months and the 30-40 year olds 5.6 months. Only younger employees under the age of 30 are not affected by the general increase. They now have a search duration of only 3.1 months (previous year 3.4 months). If we look at the search duration independent of age according to the degree of difficulty of the profiles, the polarization is much more striking. Difficult job profiles take an average of 9.1 months to find a new position. Easy and sought-after profiles take just 3.1 months. This shows that companies recruit very quickly when it comes to highly sought-after profiles.

Hidden labor market gains importance again

Not only the obligation to register jobs, but above all the increasing digitalization of companies' recruitment processes (job platforms) have led to more and more jobseekers finding a new position via public job advertisements in recent years. Last year, 48% of jobs were found via public job advertisements. In 2023, this figure fell slightly to 42% in favor of the hidden labor market, which became more important again for the first time in 2023. 35% (previous year: 28%) of the search successes came about thanks to informal networks, contacts and information. This is a clear indication that there was an increase in dynamic restructuring in 2023, where specific positions were filled quickly and pragmatically without major advertising procedures, especially at SME companies.

Positive salary development

Although many Swiss companies did not initiate any major wage rounds despite increased inflation, wage pressure on the labor market was nevertheless noticeable in 2023. For new hires, 57% of new employees were able to benefit from a salary increase. Only 22% had to accept a lower salary. While the average salary increase in the case of direct hires was 14%, it was somewhat more modest at 3% for job seekers after unemployment. If we look at salary changes by age, younger employees under the age of 30 benefited the most with an increase of 13%, followed by the 30-40 age group with 7% and the 40-50 age group with 4%. Only the over-50s age group suffered an overall loss of -8% in new hires. This figure can also be explained by the fact that a large proportion of the over 50s had to make compromises after losing their jobs. Anyone who loses their job at an advanced age must therefore expect not to be able to keep their salary.

Source: www.rundstedt.ch