Terminations: Outplacement statistics show astonishing results

The  von Rundstedt Labor Market Barometer covers the whole of Switzerland and is based on information from 746 employees affected by redundancies and from 142 companies that had to make redundancies in Switzerland in 2016. It therefore provides an interesting picture of the mood on the Swiss labor market as a whole in 2016. The most important findings are presented below at a glance:

1. first relaxation among the over 50s (Ü50)

After the polemic and public debate surrounding discrimination against older employees on the labor market increased sharply, there appears to be an easing of the situation on the labor market. The proportion of those over 50 among those made redundant fell significantly in 2016, from 38% to just 27%. This is the first time in several years that this figure has been below the reference level of the Ü50 share of the labor force of 30.5%. This suggests that relatively fewer Ü50 were affected by layoffs in 2016 than other age groups. This sign of easing is encouraging and can probably be explained by the fact that the sometimes heated and emotional public discussion in the press, politics and on social media is beginning to have an effect. Numerous practical examples prove that employers are increasingly looking for gentle alternatives for older employees.

2. more and more women affected by layoffs

Despite calls for more women in the workforce, proportionately more women than men were affected by a dismissal in 2016 than in the previous year. The proportion of women among those dismissed increased significantly in 2016, from 38% in the previous year to 46%. This figure is right on the reference level of women's share of the labor force of about 46%. The rapid increase is nevertheless surprising, as a large proportion of the female workforce still works part-time and is therefore not the primary target group for outplacement services.

3. increasing polarization between winners and losers on the labor market

The duration of the search for a new job is not the same for all employment groups. It no longer depends primarily on the age group, but rather on the personal profile of a worker. While the search duration for good and sought-after profiles fell significantly from 5.2 weeks (2015) to 4.3 weeks in 2016, it increased from 9.8 weeks (2015) to 11.2 weeks for more difficult profiles. This means that it is no longer primarily the age group, but rather the employability that determines whether someone is a winner or loser on the labor market. This is mainly due to the "Zero Gap" policy of employers to consider only exactly matching employee profiles. If a profile is in trend and in the market, the job search goes very fast. In the opposite case, the job search proves to be very difficult and lengthy.

4. employers hardly allow mobility between industries and functions

The same cause of the "zero gap" leads to another phenomenon on the labor market. Although experts are appealing to the workforce's willingness to change and agility in order to overcome the structural change caused by digitization, it is virtually impossible for workers willing to change to switch industries or their traditional functional area. Industry mobility declined markedly in 2016 and now stands at 16%, down from 32% (2015). This is not due to employees' willingness to change, but rather to the "zero gap" behavior of employers. The situation is similar with regard to functional mobility, according to which only one successful change of function was completed in 2016, after 24% in the previous year. This development will lead to greater economic challenges in view of the digitalization era.

5 No discernible wage pressure in high-wage Switzerland

Although employers and business associations frequently complain that Switzerland's high wage costs are becoming an increasing competitive disadvantage as a location, this does not really seem to be having an impact on wage developments in Switzerland. It turns out that wages in Switzerland remain more or less stable despite pressure. Even in sectors that are under particularly great pressure (banking sector, industry), salaries remain at roughly the same level. It can be observed that in 2016 the re-entry wage of an unemployed person after a termination is on average 8% lower than the previous wage. At the same time, new hires who are directly poached by another employer achieve on average a 10% higher starting wage than with the previous employer. In sum, these two developments balance each other out and thus keep the overall wage level stable.

6. social media - hype without proof of success

Everyone is talking about the emerging importance of social media. While it is obvious that social media (e.g. LinkedIn, Xing) are gaining a lot of importance in the job market. For example, social media is increasingly being used to gather information and as a distribution channel for advertised jobs and resumes. However, social media remain virtually insignificant for the search success of job seekers. In 2016, for example, only just 4% of applicants effectively found a new job via social media. The most important and successful search channel for job seekers continues to be the personal network, whose importance even increased significantly in 2016, from 42% in the previous year to 51%. It is also worth noting that headhunters and recruiters are continuously losing importance as a search channel. They now account for only 9% in 2016. The recruitment industry is increasingly becoming a commodity business with fewer and fewer exclusive mandates and more and more success mandates, with prices and margins falling more and more.

Source: von Rundstedt & Partner Switzerland AG