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During these years of economic turbulence and stagnation, Switzerland has always been seen as a ‘rock’ in the western world. According to Forbes, it ranks second in terms of global competitiveness and its thriving economy can boast an enviable 4% unemployment rate with a capacity like no other to attract international business investment and talent. What are the secrets of such a performance? The pillars of success are primarily three: stability, education and flexibility. To begin with, Switzerland has been a politically stable country for two centuries. Its unique direct democratic system allows the Swiss to adjust to new circumstances and reach a political consensus quickly. The economic stability of Switzerland is based on its know-how in niche industries, like microengineering, watchmaking, chemical, R&D and, its world-renowned financial services sector. The Swiss educational system is also very advanced, combining industry apprenticeships and vocational education (technical education and training). Students can therefore ’learn a profession’ and, afterwards, decide to skill up and gain qualifications at either a technical college or university. The result is that, unlike other European countries, Switzerland provides access to the world of work at different stages of a student’s education .

Labour market flexibility and competitive advantage

Moving on to labour market flexibility, the Swiss have longer working hours (40-45 per week) and a shorter vacation entitlement (4-5 weeks annually) than their EU neighbours. This clearly has a direct impact on workforce performance and productivity, aided and abetted by the exponential growth of temporary contracts for both skilled and unskilled workforce. One must also mention that overall labour costs and national insurance contributions are significantly less onerous than in most other European countries, again adding to its competitive advantage. However, despite this advantageous backdrop, Switzerland’s privileged position is now at risk. Historically considered a liberal country, recent political initiatives are pushing for greater government control over social and economic affairs. Swiss citizens have been asked to vote for an increase in holiday entitlement, a cap on high wages, the introduction of a minimum salary and a re-introduction of immigration quotas with the EU. The latest has passed in February, and it could not just affect political relations with the EU but the levels of foreign direct investment. Preventing companies from looking for qualified international workers would make them reconsider their position and potentially lead to an exodus, with companies moving their corporate HQs elsewhere. Furthermore, an over-reliance on government intervention and regulation could have a negative effect on the employment rate. Switzerland’s long-standing trend of growth is a result of strong economic stability, a solid educational system and its flexible labour market. Reducing this flexibility and the free movement of labour could Marc Lutzjeopardise its place at the head of Europe’s top table. So, we ask ourselves, why change a winning formula and damage competitiveness?

About guest author Marc Lutz

In 2001, Marc Lutz received his degree in International Business at FH Reutlingen and immediately began his career with Hays (then Ascena) as an account manager in IT Contracting. In 2003, he became a team leader and in 2005 was promoted to Head of Contracting for IT & Engineering. Since the beginning of 2007, Marc Lutz has served as Head of IT Perm and since 2009 has been a Business Director for Perm in Germany and Austria. Since July 2011, Marc Lutz has been the Director (Managing Director) of Hays (Schweiz) AG.

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