Swiss Staffingindex: Pressure on the labor market intensifies

The ongoing economic downturn is putting noticeable pressure on the Swiss job market. The permanent placement business in particular is experiencing a marked slump compared to the previous year: with a 25.9% drop in turnover, the decline in the third quarter is even greater than in the previous quarter (20.8%). The temporary sector also recorded a further 5.3% decline in working hours. These developments point to increasing uncertainty among companies, which are reluctant to create new jobs in the face of uncertain future prospects. Structural uncertainty is exacerbating the economic downturn and weighing on the entire sector.

The latest data from SECO confirms the tense picture of the labor market painted by the Swiss Staffing Index. In September 2024, the unemployment rate rose to 2.5% and the number of jobseekers increased by 20.1%. According to the labor market barometer, this trend also makes experts from the regional employment centers (RAV) pessimistic. They expect a further rise in unemployment and a decline in employment in the 4th quarter. The industrial and service sectors are particularly affected, as important foreign sales markets such as Germany and China are weakening.

Export-oriented companies in particular are greatly reducing their need for temporary employees - partly because the strong franc is weighing on their foreign business as a whole. This is compounded by overcapacity in production and weaker online trade. In areas where there is a shortage of skilled workers despite the economic slowdown, companies' needs often do not match the available supply of candidates. However, if the supply is right, many companies hire temporary employees on a permanent basis, which simultaneously reduces demand in the temporary and permanent staffing business.

Study shows: Temporary work serves as a bridge during career changes

Temporary work offers companies and jobseekers the flexibility they need to react quickly to economic changes and acts as a bridge to the labor market. According to a new study by AMOSA (Arbeitsmarktbeobachtung Ostschweiz Ostschweiz), 74% of temporary workers have changed employers at least once in the last five years, 41% have reoriented themselves professionally and 21% have gone through a period of unemployment.

These figures illustrate the high degree of mobility and adaptability that temporary work offers jobseekers on the labor market. Employees can react flexibly to new circumstances and successfully manage career transitions. Particularly in an economic environment characterized by uncertainty, temporary work is an instrument that helps companies to efficiently bridge staff shortages and offers employees a valuable opportunity to establish themselves in the world of work.

Cautious outlook for 2025

The labor market is likely to remain tight for the foreseeable future. It appears that the 1.2% growth forecast by SECO for 2024 will not be enough to stimulate employment on the labor market. With the 1.7 percent forecast for next year, the economic situation is likely to brighten. However, this slight increase is not expected to lead to a sharp fall in unemployment or an increase in employment. Accordingly, the role of personnel service providers as partners in professional reorientation and job searches will continue to gain in importance. This also applies to the temptraining joint training fund, thanks to which temporary workers can easily prepare themselves for the challenges of tomorrow's working world with training benefits of up to CHF 5,000.

Source: www.swissstaffing.ch