Economic situation and labor shortage impact temporary staffing business

According to the Swiss Staffing Index, the temporary staffing business slipped into the red for the first time in two years, falling by 3.4 percent. The permanent placement business is booming, with growth of 15.3 percent. The reason: labor shortages are increasingly acting as a brake on growth for staffing companies and the economy as a whole. On the one hand, the slowdown in the economy and the return to normal after the Corona period meant that companies had fewer short-term peaks in orders that had to be covered by temporary staffing. On the other hand, companies that continue to operate at high capacity are increasingly relying on permanent employment - because the market has become more predictable and in order to retain staff more closely.

Tense recruiting situation at companies

"The unprecedented demand for qualified specialists clearly shows that the shortage of skilled workers in Switzerland continues to worsen," notes Jan Jacob, Country Manager ManpowerGroup Switzerland, based on the Manpower Labor Market Barometer. Three out of four companies complain about difficulties in recruiting skilled workers. This development is making itself felt on the job market. According to the Adecco Group Swiss Job Market Index took the number of vacancies in the first quarter of 2023 only slightly down from the historic high in Q4 2022.

Marcel Keller, Country President Adecco Group Switzerland, comments: "After almost 3 years of Covid-related uncertainty, confidence is spreading. Companies are investing in permanent positions again and hiring more and more temporary employees on a permanent basis. In addition, Covid has not only increased the shortage of skilled workers, but also the bargaining power of skilled workers, so that companies are doing everything they can to retain employees - and preferably for the long term."

Hotly contested talent on the labor market

In view of the tight labor market situation, companies have to find new ways to attract candidates. Generation Z is particularly hotly contested. The latest white paper from HR consultant Careerplus shows: Values and flexibility are the key to success. 64 percent of Generation Z dream of doing something good. Only 19 percent would work in a company that does not share their values. Four out of ten candidates reject job offers without home office options. Flexibility is generally a trend in occupations with a shortage of skilled workers. A survey of people with medical job profiles by the employment platform Coople shows that 76.4 percent value the freedom to arrange their working hours as an advantage. 63.1 % use flexible work as additional income and 38.8 percent seek a more balanced work-life balance.

Outlook: Staffing firms remain concerned about labor shortage

The tense labor market situation is a concern for staffing service providers. Looking ahead over the next six months, 46.8 percent expect business activity in the temporary staffing sector to increase. 32.5 percent also anticipate a further increase in the permanent placement business. By comparison, in Q1 2022, these figures were 70 and 54 percent, respectively. The dried-up labor market and low economic momentum are likely to be the main reasons for this assessment by business leaders. The fact that employees are taking advantage of the good labor market situation to change jobs or are consciously opting for flexible working models such as temporary employment could have a positive impact on business development.

Source: Swissstaffing