Outplacement study shows: Hire & Fire" culture on the rise in Switzerland, too

Every year, von Rundstedt, a leading outplacement provider in Germany, Austria and Switzerland, presents its outplacement statistics. Outplacement is a service that a company offers to those affected in the event of dismissals in the spirit of social responsibility. The Outplacement Barometer, published annually, covers the whole of Switzerland and is based on information from 1370 employees affected by a dismissal and from 201 companies from various industries that had to make redundancies in Switzerland in 2017. It thus provides an interesting picture of the mood on the Swiss labor market in 2017. The current edition shows some findings that are surprisingly positive, but also some that give pause for thought.

Outplacement of Ü50: "Older employees are still a risk group, but not a problem group"

Today, employees older than 5o years are treated as the biggest problem group in Switzerland, sometimes with a lot of smoke and polemics. But von Rundstedt's figures paint a different picture. In 2017, the share of employees over 50 among those terminated was 31%, which, as in the previous year (2016: 27%), roughly corresponds to the reference size of the over 50 share of the workforce of 30.5%. In terms of search duration, the study authors continue to note a large difference between "difficult profiles" (11 Mte) and "easy profiles" (4.5 Mte). This affects those with a low marketability. However, these are not primarily older than 50. When looking at the search duration by age group, it can also be seen that the search duration of the Ü50 with 7.9 months (2016: 8.3 Mte) is no longer so much above the reference average of all age groups of 6.3 months. The data also show a very large variance in the over-50 group, i.e. there are over-50s with a short search duration and those with a long search duration, in some cases over 12 months. In contrast, the search duration of the 30-40 age group has increased to 6.5 months (2016: 6.2 months) and is thus no longer so much below the over-50s.

From these results, the study deduces that the difficulties on the labor market are not primarily characterized by age, but rather by the marketability of an individual. The current structural change in various industries and functional areas affects almost all age groups, not just those over 50, it says. The over-50s are still one of the risk groups because they are relatively more strongly influenced by the old market structure. Nevertheless, they do not represent a problem group. This is shown by the large number of over-50s who find a new job quickly and easily. Rather, there is a polarization between marketable and "difficult" profiles, irrespective of age. Age is only one of the relevant factors influencing marketability.

Zero Gap: "Employers hardly allow mobility between industries and functions"

Last year's study already pointed out that employers do not allow any profile deviations from the requirement profile during the search and selection process. They look for the 100% matching profile and exploit the full potential of the global labor market to do so. This creates a structural labor market problem in which there is a shortage of skilled workers and qualified unemployment at the same time. One consequence of this is that, despite demonstrable potential, those affected find it difficult to move to a new industry or a new function if they do not have this experience to show for it. After falling to 16% in 2016 (2015: 32%), industry mobility recovered somewhat in 2017 to 21%, but remains markedly below the 2015 figure. Functional mobility in 2017 is also slightly higher than the previous year's figure (2016: 21%) at 23%, but remains at a very low level. The slight increases in 2017 are due to special measures at von Rundstedt to support those affected in their mobility.

This leads to the conclusion that Zero Gap is still a strong trend and a phenomenon in the Swiss labor market that causes trouble for those affected. Against the backdrop of the increasing economic challenges of the digitalization era, this trend is worrying.

Downsizing trend at international headquarters: "Qualified staff functions are increasingly being relocated abroad".

Another finding of the outplacement study is that terminations in 2017 were more frequently due to explicit headcount reduction measures than in previous years. In 2017, 26% of the terminations were due to a reduction in headcount (2016: 15%). In addition, at 33%, staff functions and management support functions were more affected by terminations in 2017 than in the previous two years (2015: 24%; 2016: 31%). These two developments can be explained by the fact that in 2017, many headquarters of global companies based in Switzerland reduced their staff. This affects both headquarters of Swiss groups and EMEA headquarters of foreign groups. According to the study, it can be observed that, on the one hand, highly qualified staff positions, which are not tied to a specific location, are being systematically relocated abroad. After Switzerland as a production location, Switzerland as a headquarters location is also coming under increasing pressure. On the other hand, the fast-moving "hire & fire" culture is increasingly gaining a foothold at headquarters and noticeably increasing staff turnover.

Positive salary development in the highly qualified sector: "Contrary to many reports, no salary correction is taking place in Switzerland".

Employers and business associations frequently complain that Switzerland's high wage costs are becoming an increasing competitive disadvantage as a location. This is apparently being corrected by a creeping migration of highly qualified staff positions abroad. In contrast, however, it does not seem to have a real impact on wage development in Switzerland. In 2017, for example, the re-entry wage of an unemployed person after a layoff was on average 6% lower than the previous wage (2016: 8%). At the same time, as in the previous year, new hires who were directly poached by another employer achieved a starting wage that was 10% higher on average than with the previous employer. In total, this leads to a wage increase of around 2%. It can be deduced from this that wage pressure in Switzerland, at least in the highly skilled sector, is not having an impact on wage development, but is rather being corrected via a creeping but targeted outsourcing of highly skilled staff positions.

Source: von Rundstedt