AI, Jobs, and Switzerland’s Workforce: A Conversation with Dr. Michael Grampp (#12)

Episode Highlights

Dr. Michael Grampp is the Chief Economist and Head of Research at Deloitte Switzerland, with deep expertise in understanding economic trends and workforce dynamics. The conversation dives into the transformative role of AI in reshaping industries, Switzerland’s unique job market, and the challenges and opportunities of a rapidly changing economic landscape.

Expect to learn about how generative AI is driving innovation while creating new challenges, the pros and cons of Switzerland’s diverse workforce with a high percentage of expats, how the Swiss job market compares to its European neighbours, and the potential economic hurdles Switzerland faces, including energy shortages and population growth, along with much more…

About Michael Grampp: Chief Economist and Research Director at Deloitte Switzerland

Michael Grampp serves as the Chief Economist and Research Director at Deloitte Switzerland, where he leads the Swiss Research team in producing thought leadership publications and studies. With over 20 years of professional experience, Michael advises Deloitte’s clients and leadership on economic issues and various industry topics.

Prior to his tenure at Deloitte, Michael held management positions across industries such as banking, energy, and manufacturing, and also founded a startup. He holds a master’s degree in economics and marketing, and a PhD in business administration

⁠Michael Grampp LinkedIn profile

Full Transcript

Gain deep insights into Switzerland’s job market, the implications of AI on employment, and key advice for job seekers navigating these changes.

Mike: [00:00:00] Michael, welcome to How It Ticks. How are you doing?

Michael: Hi Mike. Pleasure to be here.

Mike: You are the chief economist at Deloitte. Does the Chief Economist’s day look like on average? Well, that’s

Michael: a good question. Um, it has various elements. I think, you know, what is important for being the Chief Economist is you need to stay informed and obviously, Kind of daily routine is that I consume a wide variety of information sources.

So newspapers, magazines, radio, podcasts, videos, social media. And, you know, because I need a broad perspective, so I’m not now a specialist on, on, on. AI only or anything like that. So I, I have to listen to, to, and read a lot about, and what is really important is that I also step out of my echo chamber and ensure that I’m really, yeah, I’m both informed and also [00:01:00] connected a little bit to current economic reality.

So I think that’s one, uh, very important part of my daily routine. Then engaging with key stakeholders is important. So regularly speaking, either with our clients or with government officials. Other external experts to gain also real verdicts, perspectives, I would say, and understand new trends that you hear now from others as well, and also connecting with internal colleagues.

Something I do when I’m in the office more frequently than when I’m at home and then creating content. That’s usually when I work from home, you know, work on studies, opinion papers or producing my own podcast, as you know.

Mike: You said that one of the ways you. You get informed as you speak to some of your clients.

What does that look like? You just every so often hit them up and go, Hey, can we catch up? I’m curious to know what you’re thinking about.

Michael: Yeah, it’s, it’s really [00:02:00] push and pull, I would say. So, uh, you know, when we publish some research on specific topics, often they approach us to want to understand a little bit more about that and, uh, want to have a discussion.

If there are crisis, uh, I usually as a chief economist, I’m high on demand. So I think inflation was for me actually a good time, not for anyone else. But I mean, uh, I had so many meetings and, uh, given presentation on conferences and so around inflation, for example, I’m then asked, that’s when, when, when people come to me, approach me and ask for that, and then I have, of course, when I work on specific projects and topics with my team, we.

Search for experts outside of Deloitte because it should never be just a Deloitte opinion or a point of view that we produce. We speak with people from the business and so on and reach out to, [00:03:00] to do expert interviews ourselves. So where we then and I interview others in order to exchange ideas and opinions.

Mike: Is whenever you do some of these talks, are you always representing Deloitte? Like when you go and speak about a conference about the, um, about inflation, are you talking as Michael or are you talking as Deloitte?

Michael: No, no. I’m talking here completely, uh, always as Deloitte, no, because that’s my role. So I’m not, it’s not, not my, my private personal role.

Then I’m engaged in other topics like, like football or anything like that. So it’s really, um, I’m the representative of, uh, of Deloitte, Switzerland in this context for those topics also when I speak at conferences and so on, or taking part in panel discussions.

Mike: It seems a little bit like your job is not that different from a journalist producing content.

I had like a few weeks ago, I had a journalist from Bloomberg on here. And when I asked him about what his day looks [00:04:00] like, it actually sounded pretty similar to what you just said in terms of gathering information, speaking to people, constantly keeping up with all these different media. And then. But I guess when you’re releasing information, you’re releasing it from Deloitte.

What’s the process to actually going from getting in for reading information to producing information?

Michael: Yeah, I think the comparison with job of a journalist is, is, is correct. That’s, that’s right. So I think a similar, similar job description. However, we are not under the same, same time pressure. I mean, someone at Bloomberg’s, uh, There are news or a story happens and he has to produce something in four hours.

That’s not something we have to do. So we have a little bit of luxury to have more time. And that means automatically there are more, more checks across and to pass in order to publish something. I think it’s the usual when, whenever something gets. out of a [00:05:00] company and doesn’t matter if there’s now a consulting firm or a Car manufacturer anything like else.

There are some security checks. There is Reputational risk checks, but it’s not so bad actually. So when we write a report At the end, we need one or two people who do these checks. They go over that. Usually when it’s something for the media or media, people go over that. But I had never ever in my over 10 years was Deloitte a case where something was refused.

So maybe changed a little bit, the wording or anything like that. But overall, we are in a lucky position. That we are quite independent and, uh, can publish more or less what we want, but obviously we have more, that’s again now the difference to a journalist. We have more the corporate view because we focus on [00:06:00] topics that are of interest for the corporate sector and very often with challenges where we come up with ideas for solutions and, uh, identify opportunities basically in various areas.

It’s not AI or it’s an industry study or anything like that.

Mike: Given that organizations are going to take the content that you produce as input to their decision making, do you feel a strong sense of responsibility with this content?

Michael: Yeah, absolutely. So I think our insights, our analysis and Opinions can influence important decisions for businesses and with this influence comes also responsibility to ensure that our analysis is accurate, that we use the right and credible data and our view is balanced and clear.

I think people who read our stuff, clients want to have and see an opinion. So it’s important to have [00:07:00] an opinion, but it should be balanced, of course, and quite clear. And well, I think. An important skill in our job is being fact checker, basically, again, like a journalist. And I mean, if you do this right, then, uh, hardly anything can go wrong basically, you know, but obviously there is a responsibility in what you publish that it’s correct that you rely on the right data and so on.

Mike: Do you ever, in your insights, do you ever, um, make predictions?

Michael: No, we do not. We don’t have economic forecasts. So if you’re thinking about economic forecasts, we are not doing that. There was a strategic decision a couple of years ago because in Switzerland, there are so many institutions, banks, uh, government agencies who are doing forecasting.

And We decided we, there’s no need that we are number 11 or 12 in the market. And I stand then in front of the camera and say, okay, next year’s [00:08:00] Switzerland will grow by 2. 3%. And three months later, I can stand in front of the same camera and say why I was wrong. So we decided not to do complex economic modeling and forecasting because that’s also resource intensive.

You need. Two, three people in order to do that, and there are good forecasters on the market. So we use consensus forecasts and use that as a basis for our analysis. But then of course, with predictions, when it comes more to business topics. So let’s say as a couple of, uh, four or five years ago, During the pandemic, uh, the whole home office trend started.

We of course came up with prediction where we believe uh How the whole things will develop also with other business topics And when it comes again to economic, uh predictions not gdp forecasting with models but obviously we are collecting the data and We have an opinion about I don’t know Inflation will go down or [00:09:00] up, interest rate might go up and down, but it’s not based on complex mathematical modeling.

Mike: Talking about business predictions. Do you have any predictions offhand that you can share about AI and where that’s going?

Michael: Um, yeah, I think AI is an interesting case. So, I mean, some say it’s a completely hype. Some say, no, it’s not the opposite. I think, like, usually I think the truth lies in the middle. I think we have seen a big hype and euphoric, uh, expectations.

I think that was a little bit too much. It will have a big impact, but it will take much longer than we thought two years ago, and that’s something what I hear from many. In the, in the market as well, but it will have an impact. And I do know it depends a lot on, let’s say, um, which area a company is working for, uh, [00:10:00] is acting in which industry, uh, the job profile, it depends a lot.

So, I mean, what we see at the moment, uh, large organizations, for example, integrating AI into. Operations focusing on automating routine tasks or enhancing data analysis, improving customer services. That’s already ongoing, but it takes a little bit longer than expected to see the benefits. And, uh, but still many companies are finding that full AI integration will, it’s a complex thing and will take longer than anticipated.

So it will come, it will have an, will have an impact. Like we’ve seen from other big technology shifts, like introduction of the internet or anything like that. But it won’t come as quickly as we thought two years ago.

Mike: Do you have any idea at how specifically companies will be, I guess when I’m thinking AI, I’m thinking Gen [00:11:00] AI now, cause that’s the hype of the last eight months.

Yeah, that’s the moment everyone is thinking about Gen AI. For sure. And besides employees getting it, getting chat GPT to write their emails and project plans, do you see any other? Developments in terms of how companies are using it. Well,

Michael: yeah, I think you see many, many, many examples and also within Deloitte.

I mean, a very good example is everything that is connected with creating visuals or videos. I mean, they’re amazing things happen. So, I mean, let’s say you. You create a visual for a report, uh, what took three years ago, a week takes now four hours or something like that. And that’s not, uh, exaggerated really.

So I think with those new tools you can do a lot. I mean, in the creative space, you see many advancements. And by the way, that does not necessarily lead that mean that [00:12:00] we need less people. So, I mean, our team size is still the same, but we can do much more cooler things, quicker things, more things. So, I mean, it’s always a resource issue in companies like ours to have creative teams.

Everyone would like to have more creative stuff, but they’re completely busy the whole time and now they can do twice as much. It’s the same amount of input and that’s something we should not forget and we see this also in other areas.

Mike: I remember a conversation between Lex Friedman and Sam Altman and they were talking about what happens when Chachapiti can write 90 percent of a developer’s code.

And they said, is it going to replace nine out of 10 developers? I said, no, no, that is going to produce 10 times more code. That’s like, yeah, correct. Uh, it,

Michael: it will have another problems. Let’s, let’s stay with a little bit, my area of content [00:13:00] creation. I mean, we are also using in certain degrees, those two.

Tools and let’s imagine you can create five times more content and everyone can create five times more content than you face other issues. And so, I mean, who is going to read or consume this content if you have more and more content? That’s a little bit the one issue and the other issue is the quality thing.

So, I mean, I love ChatGPT, but I also know, know the limitations when it comes to creating content and writing. And. It’s basically one of, as I mentioned, fact checking, it’s an important part of my job. And this is getting even more important when you’re using AI. And also, uh, let’s say you, you ask ChechuBD or ChechuBD helps you in writing piece of content.

It can do only part of it, to be honest, but I mean, still you must, as a user, you must be able to know how a good piece of [00:14:00] content looks like if you have not learned that and you just rely on Chattopadhyay, forget it. That’s a little bit the danger that the quality of output and the more we see of this AI created output quality goes down.

I think that’s, that’s more, more the challenge and not necessarily that we might all lose our jobs.

Mike: You almost need to put people through a few years of bootcamp, have it restricted before allowing them.

Michael: Correct. That’s why I’m very critical. I see it with my two kids, 14 and 11, especially the older one, they’re using chat GPT when they’re using at schools.

I’m against that to be honest, because exactly of that reason, you can talk with them, be responsible, use it only for this or that, but now they use it then to write the whole essay. They have no clue what they’ve written basically and will never learn how to write it. And if you have the teachers who have even less clue about that, and we don’t know that, then, uh, the disaster is written on the wall.

[00:15:00] What will happen with this generation?

Mike: Yeah. My, my brother’s in university at the moment and he can, he’s studying engineering and when he gets a problem, a math problem, he can just take a screenshot of it and upload it and go solve this problem for me. And he said, it’s amazing. I said, yeah, you might finish university, but you, You won’t be an engineer at the end because you won’t know anything.

Michael: Yeah. Now, now the AI enthusiasts say, well, you, In the future, you don’t need to know that, uh, the machine knows it, not so sure about it. But what is really good coming back to my kids is it’s much easier for me to help them with, with, uh, when they learn or learn, for example, because Chet Chibiti is a perfect teacher.

So, I mean, and my kids also say, well, Chet Chibiti explains it much better than my teacher did. So that’s, that’s of course amazing. No, but, um, still you have really to, to learn it first, you know, how good content looks like. So that’s why I’m not worried [00:16:00] that people like, like us, uh, ever go out of the job market because quality review, fact checking will get even more important.

So experience will be a very important asset.

Mike: Coming back to sort of this Swiss economy, when you have these big Big Swiss institutions, most of which extremely sensitive with their data. Do you think it can really help them given that to be properly useful, you got to train it on the data, which the company has?

Michael: Um, I’m a little bit too far away now to, to know exactly what, what the banks, for example, are doing this. I mean, that’s, that’s an example, uh, that you think, I think, yes, it can, but, uh, As we know, I mean, must be then, data must be stored within Switzerland and all of the requirements. It might have limiting effects then on it, on, on quality, but I’m not close [00:17:00] enough to, to, to the topic that I can really judge that.

But I know that the large AI, uh, providers are of course working on solutions, uh, for, let’s say, companies It was very data sensitive, um, uh, content where they cannot just upload everything to the cloud and you don’t know where it is now. I mean, you see it even in large corporations with JetGPT, it and they build their own, uh, Gen AI models, um, because of that reason, but often the quality is not exactly the same.

That’s correct.

Mike: Do you think. Looking at trends and possibly making a prediction, do you think that this has a big enough impact on the demand for jobs that it would change the job market? Do you think ultimately people’s skills need to change for this or it’s just, [00:18:00] you know, it’s no different to learning how to write an email ultimately, it just gets built into what people are already doing?

Michael: No, I think it will have, of course, an impact like all, uh, all technology changes. Have I think that’s something you will see then also that has an impact in the job market regarding skills, but you know, that will, I mean, that’s a constant topic anyway. I mean, you have, uh, it’s, it’s constant learning. You have upskilling, um, You need to be in front of those new developments and you know, there’s this famous quote.

It’s not from me, of course, uh, from someone else at the beginning of the whole hype who said, okay, you will never lose your job because of AI, but you will lose the job if you don’t know how to use, uh, gen AI. And I think that describes it quite well. So, um, I think self responsibility, continuous learning [00:19:00] is still important.

With AI or without AI, you know, and develop in demand digital and technical skills now, and that’s now AI, for example, and in three years time, it’s something else.

Mike: Besides the technical skills, what are, what are the other sort of most valuable skills which you think will be valuable in the next sort of five years?

Michael: I think, I think it comes down to the classical, um, skills you, you need in a job. And really, I don’t think a lot have changed. Of course you have to take, take, uh, the tech changes and so on. But I mean, What I’ve seen a difference in the last year is getting more and more important is skill that, uh, to, to build your own personal brand is something very, very interesting.

So I did three years ago, uh, uh, six months training course on [00:20:00] that topic. And that’s something you experienced through the spread of social media. So build up your personal brand is getting more and more important. So do not rely only on your position in your firm, for example, but build up your own personal brand.

Establish yourself as an expert in your field and also by sharing your insights, writing articles, producing content, engaging in, in, in your, in your professional communities and so on. I think soft skills, nothing new, I know, but I mean, strengthening of, of soft skills, building and leverage the network, uh, working.

Internationally, I mean, the more we have remote working as a part and the more, more and more jobs might go offshore and you work more in collaborative teams, it’s important that you know how to do that. I think what was a good experience for many of us during the pandemic, suddenly we were sitting in the home office for many of us.

[00:21:00] It was the first time and there suddenly we realized everyone realized, okay, it’s not. Not exactly the same. You have to adapt to that. And I know people who did this very good and other ones, not so much. And so that was also a new skill you have to develop that you are able to work two days a week alone in your office, for example,

Mike: speaking of home office.

Have you looked into any trends or had any thoughts on what are the sort of longer term trends of home office given where we are now? Like I saw, it must have been a month ago or maybe two months ago there was this uproar because Google is making everybody come back three days a week mandatory in the office and Google is, you know, given they’re the most famous company in the world to having the most luxurious work life, they still had to mandate office days.

It’s interesting. Do you think that’s coming back?

Michael: Well, I think Google was an extreme case at the beginning already, [00:22:00] and now they’re moving back to hybrid, basically, two or three days or so exactly that model that I see at most of the companies. And I think that’s the model we will see in the future as well.

So I think home office is here to stay. Some. Decided, okay, let’s send everyone home and we don’t need an office anymore. Some realized now, okay, that was maybe not ideal and, and ask them to come back like Google. I think remote work has proven to be effective. And I think many companies I see still see many companies are really committed to supporting it long term and flexibility has become their more, let’s say a core expectation for many employees.

Now, uh, but it depends a lot on the role as well. Of course. I think ID and data roles, uh, software development that you can do easily, uh, perform remotely and not a surprise very often get, get, it gets off shore. [00:23:00] If you have more sales and client facing roles, I mean, There you have more on hybrid approach.

So in person interaction, relationship building, I think something we realized during the pandemic is, yeah, it’s a difference. So it is to sell a 10 million project on teams. It’s not, so not the same, like try to sell a 10 million project when you sit in the same room. And then you have all the creative and collaborative, uh, Tasks where it’s really better if you meet at least once or twice per week in the office In sessions and to act a little bit or get a little bit more creative And yeah, so I think it’s here to stay and I think the hybrid model that we see with most of the companies I think that’s form of the future, but don’t forget we have still 50 percent of jobs in switzerland in many other countries Cannot, they cannot work from home.

I [00:24:00] think that’s a challenge we see in, in some, some companies where they have, let’s say, still a manufacturing base, for example, and they need to come to the office and then you have to back office and they stay at home, that’s a little bit, uh, uh, political decision then as well for them, you always have very often have to say, okay, our admin or back office people also need to be more frequently in the office.

Otherwise this is create, uh, creating, uh, frictions among. The whole thing. If you have now only a service company where everyone just works in the, in the office, it’s much easier. But again, every second person cannot work from home because someone has to drive the tram, someone has to bake your bread and so on.

Don’t forget that.

Mike: Yeah. Yeah. I think Elon Musk was a good example of someone very vocal about it not being fair if half the company has to come in the other half.

Michael: Yeah, that’s exactly that exactly. You know, he has people who, who, uh, Producing the [00:25:00] Teslas and then you have the management more the management guys.

So then it’s getting tricky

Mike: in terms of the job market specifically, is there much of a, do you see much of a difference between the Swiss job market compared to other European cities in terms of what is required? Yeah,

Michael: I think what we’ve seen in the last 20 years actually is really, uh, the Swiss job market is quite different to other, let’s say, European, European countries.

I think it’s because we have quite a robust economy, uh, with one of Europe’s strongest economies. We are very stable. I mean, COVID again, a good example. I mean, uh, we still had high employment rates. Labor market participation is high. Uh, we hardly had any inflation, uh, not a big reception during COVID and this resilience attracts.

A lot of talent and supports also job growth. [00:26:00] Then we have one of the most flexible labor markets, so no comparison with Germany or France, for example, or even Italy, um, highly flexible, um, labor market law that allow for quick adaption to economic change and this flexibility supports and also now both employees and one employers, and then the employees as well.

Especially when you have disruption going on. So it’s much easier than for the whole economy to change. Uh, we have quite high migration of, of a skilled workforce. That’s also something you do not see in many other countries, but we rely as well, heavily on skilled international workers. Especially in sectors like pharma, finance, IT, and so on.

But at the same time, also on, let’s say, a lower educational level, we need people from abroad, healthcare sector, [00:27:00] infrastructure, and so on. That fills the gaps in the labor market, but there’s also downside to that, of course.

Mike: That’s what I was going to ask you. I mean, when you have a large number of expat skilled workers coming here to work, benefits seem relatively obvious, but what are the economic challenges that get created from that as well?

Michael: Yeah, it’s a good point. So I see a couple of challenges. I think the most obvious one for everyone that comes to Switzerland, it’s always the same. It’s housing, um, housing and infrastructure strain. Um, so you see that the, the, the influx of skilled workers and experts, Increases demand for housing that drive up prices, creating pressure on infrastructure, especially in the big cities, but driving up prices, not, not forget the reason for that is the big obstacle is really the tight regulation.

And in my opinion, also the wrong regulation, supply and demand does not match. And [00:28:00] that’s because the supply is not on the same level like the demand. And with the lower regulation, Zurich is a very good example. I mean. There are not many companies now left that would like to build something in Zurich because of the regulation and all the things you have to go through.

This is definitely an imbalance. And the same applies for infrastructure. I mean, the population has grown significantly. Significantly over the last 20 years, but infrastructure expansion has not kept pace so electricity wise, for example, not roadwise motorways. I mean, we have soon the upcoming referendum about the, um, to build more and more streets, more motorways, but it’s an open, it’s still open the outcome.

So. I think that’s the obvious, let’s say, challenge or negative side in growth is also important to mention. I mean, [00:29:00] we are increasingly seeing more a broad based economic growth. I mean, if you look at the per capita growth rates in recent years, They have been only half about the overall growth rate. So you can even say for, for last year, we haven’t grown at all.

If you look at the per capita growth, that’s many people don’t look at those numbers actually. So it’s to a certain degree, a little bit like, um, perpetual motion. So, I mean, the shortage of skilled workers, many believe can dissolve by high immigration. How we did this in the past, but this is getting more and more difficult and it creates.

Uh, challenges and side effects, and that leads to create a more labor shortage. So for example, when you have a high skilled professional coming to Switzerland with the families, the demand for labor in associated sectors like childcare, healthcare, [00:30:00] infrastructure increases as well. And, uh, this can then actually, or actually does increase the pressure on the labor market in those sections.

So, I mean, we are talking for over 20 years. Now about labor shortage, but it’s never over. So it’s really a question. We, we as a country have to ask you, do you want to continue with this economic model or not? I think when I look around at year round, people are getting more critical, uh, around that. And I’m not sure if we continue like that.

And another thing is due to the demographic change, it will be. It will get even from year to year more difficult to attract all really those talent coming to Switzerland because in the other countries they have also labor shortage and in Europe we are getting less and less people really active in the workforce because more older people exit the job market than entering.[00:31:00]

Mike: What’s the alternative to, okay, if we say, you know what, this migration, it’s too much, we need to slow down because we can no longer sustain the amount of, um, infrastructure. What’s the alternative to that?

Michael: Uh, well, you have to compensate that quite a bit. Okay. Let’s, let’s, let’s focus on the workforce. Now you, you have a certain demand for it and estimations go.

I think it was a recently as a study done by demograph, demographica, I believe, um, estimate around a gap of 400, 000 people in the next 10 years. So. If you cannot attract enough talent, or if you do not want to attract more talent coming to Switzerland, you have to look at the potential in the country. I mean, first of all, what would be necessary is to increase the pension age, of course, no?

We have, we are now with 65. We have one of the lowest in whole Europe. So in other countries, you have 67. In many countries, In [00:32:00] Portugal, Scandinavian ones, it’s, it’s very often linked to the, um, age expectancy and things like that. So, but we are still at 65. So I think there’s no way around to, to increase that because that would help at least keeping people longer in the workforce.

Another thing is still women. I think there’s a working woman, still potential there or non working woman, still a potential there. We have quite a, in, uh, Globally, quite a high participation rate of women in the workforce, which is good. So very high one, however, they work very small pensum. So, I mean, many work only part time 40%, 50%, 60%, and that’s something where I see potential as well.

I know not easy to solve because there are reasons why they don’t work a hundred percent and you have tax reasons, you have child care, it’s not easy and expensive. I know that, but I mean, that’s something you can do. And then I think the biggest chance is in automation, technology, [00:33:00] automation, just look at countries like Japan, Taiwan, South Korea.

They are 20 years ahead in this development of us, Japan, shrinking population, but still managing growth. And one of a couple of reasons. There are people working until 70, for example, women are getting now more and more into the labor market. But one of the main reason was really that they invested heavily already years ago in automation, even in healthcare and in the care sector.

I think we have to do more on that side to compensate that.

Mike: What do you, I mean, how does that look? Cause like Switzerland’s famously behind the times when it comes to technology in general. I mean, when I opened a bank account, I still get five separate letters in five different days to.

Michael: But still better than in the UK or not when you open a bank account there or have to improve.

Mike: I’m Australian and I like to think we are a little bit further ahead, but still there’s a long [00:34:00] way to go. But I guess my point is these things, like you said, this, if it’s 20 years worth of. Card commitment, like from where we are to where Japan is in the time frame, we seem to have to. Have a solution in place seems like a pretty big ask.

Michael: Yeah, it is. It is. You’re completely right I mean, you know, I mean a lot and that’s not an ask Mainly for for the government. So I think it’s for the corporate sector, but I mean in the last 10 20 years it was very often the easier way for companies to hire cheaper labor from abroad than investing in technology.

But this has to change. But I think the pressure is now on, on, on, uh, skills, uh, talent shortage and so on that this will happen now. And you know, you can do that a lot also in a, in a short period of time. I mean, you, you apply, of course, the latest technology and not the one that was 20 years ago, the latest one.

So, uh, but of course, uh, we have to start with that [00:35:00] and doing it more and more.

Mike: Do you know what The percentage of the workforce in Switzerland is Swiss versus international, or expat or not, not a Swiss citizen.

Michael: I don’t know the, the workforce exactly, but you know, we have around 25%, uh, foreigners here. Uh, I expect that it’s a little bit similar than in the workforce, but what I did know, because we, we’ve done, uh, recently a demographic analysis in that, uh.

Unfortunately, confirms the dilemma we are getting more into that regarding demographic changes that the birth rate, we looked at the birth rates of Swiss nationals and those that have do not have a Swiss passport in Switzerland and both goes down dramatically. Uh, the birth rate of, let’s say the foreigners here is still a little bit higher, 0.

3 point higher, I think. But it goes down dramatically as well. So, you know, you have this reproduction rate. [00:36:00] It is called 2. 1. And, uh, we are below, far below too, I think, uh, Swiss nationals around 1. 3 and the international ones 1. 6. And, but both, both scores goes down like that. So we, the people we We hire from abroad, come from countries that face exactly the same demographic problems to, to summarize it.

So birth rate, you know, demographic change is either development of the birth rate. And then at the same time, when you look at the, uh, the job market, uh, How many people are entering the job market and that’s very easy to, to forecast because I mean, you know, those that are born today will enter in 16 or 18 years, um, uh, the job market and there’s already a big gap.

So the direction we’re heading is quite clear. Solution is of course, not, not so easy. And [00:37:00] because everyone, I mean, every country in Europe is facing exactly the same issue. It

Mike: appears to me just as someone in the workforce myself, that more that there is an increase in hiring remote work by good companies.

Is that an allude? Is that, is that true? Or am I just, is that seeming, seeming to be the case for me?

Michael: What I think is, I mean, it always has been like that. No, I think, I don’t think it’s, uh, I don’t think it’s, it’s anything new. I think. We always offshored work, so it’s a longstanding practice, hiring remote workers abroad, offshoring, you know, you always had those trends.

I remember some years ago, HR, a lot of HR functions went suddenly abroad to Poland. Then a couple of years later back, now, now, now it’s fine. And so anything like that. So I think it’s not, nothing, nothing new.[00:38:00]

But I think it has a limited impact on the domestic labor market, to be honest, because despite the strength that you might see, there has been no significant negative effect on Swiss residents job opportunities. I think we still have a shortage in many areas and still a strong economy. High demand for specialized skilled roles has continued to, to, to support the local employment.

Mike: I mean, it also, it’s, yeah, it’s pretty, um, almost invaluable to speak French or Swiss German, which I guess is still difficult to find by, if you were looking for, if you have so much competition from expats and international people, at least there is that, which is always going to be the advantage of locals.

Michael: Yes, I think that’s also something because we do not speak or do not have English as a local language. Uh, the risk is also, uh, more limited. I know, I mean, I sometimes look also when I have a project where I don’t have enough [00:39:00] resources to look for externals who can support us, but I mean, the biggest challenge is always the language barrier.

Now, I mean, try to find someone, let’s say you have to analyze, uh, Data for Swiss companies, find someone in, in India who can read, um, annual reports that are available only in German, for example, it’s nearly impossible. AI might help now, of course. So, I mean, you don’t need individuals anymore to do that.

And Uh, the rise of AI and the ongoing cost pressure might shift more hiring abroad. Yes, that’s right. But at the same time, then we have also the decline in the workforce over the coming years and decades. So. It might come at the right time as well. No, we don’t have enough people anyway. So

Mike: how does the profile of the average job seeker look now?

I understand that one of the key reasons it’s so difficult to find people is [00:40:00] I suppose there are less people now, because as you said, there’s an aging population and therefore less people on the job market, but in Is it also more difficult to find people now, or is that also a bit of an illusion? It’s always been this way.

Michael: Yeah, good question. I mean, I have now really just the experience in my area or where I support other areas in finding people. It’s still I think end of the day, I think you’re right. It has not changed a lot in the last 10 or 15 years. It was difficult 15 years ago. It’s difficult now. We have sometimes waves.

So sometimes for some job, uh, uh, offers you get suddenly 50 people. And then two years later for something similar, only five. Uh, I don’t know why this is the case, but, uh, It happens quite frequently. So they are up and downs, but again, as I mentioned earlier, so we are talking about, um, skill shortages, uh, for years [00:41:00] we are growing and growing and we still have them.

Mike: Yeah. I mean, we have, it’s, you have access to a pool of candidates all over the world. You know, I have these online tools which make it. More easy to find talent than ever. And yet it does not seem to have solved the problem of being able to find the right people.

Michael: Yeah, I think you’re right. I’m not an HR expert and don’t work in HR, but, uh, I think you’re right that you can increase the number of applications maybe.

But this does not necessarily need, you find more people with the right skillset. But I think also that companies, so that’s what I hear from others as well. And from HR experts are not flexible enough as well in order what they’re looking for. They always look, they’re still looking for the perfect fit.

And, but they have to change because that’s not possible anymore. And sometimes it’s even better to get someone [00:42:00] with a maybe different, uh, Uh, experience from a different industry or different skill set, uh, even if, if it does not fit a hundred percent, the description that you’re looking for.

Mike: Yeah. I wonder if it’s both.

It’s the expectation of the employer trying to find the perfect candidate, and then also the expectation of the candidates trying to find the perfect job. And together, there’s just never that perfect alignment is harder than ever.

Michael: Yeah, that’s correct. Correct. And especially, I mean, it’s a different story.

If you, you apply for a job when you already have one at the moment, then you’re more critical and look exactly that you find something that suits you much better. If you are on the top market and month by month, I think you’re getting more flexible. What do you, what do you accept?

Mike: It’s probably a bit like dating now that there is the illusion of an infinite amount of people to choose from you become incredibly picky, which maybe that wasn’t the case and makes things ultimately worse than before you had an app to [00:43:00] find everything.

Michael: Yeah. And you know, it’s a demand market at the moment. So, I mean, uh, there’s not enough demand there and therefore the demand size. So, those that are looking for a job. Can also dictate to a certain degree what they want to have now, that’s why you have so many in the last years, you know, all these additional benefits that every, every company tries to attract now tell them now, but you haven’t seen what do you mean by

Mike: demand job?

Michael: It’s more demand driven markets or a demand driven market. So, I mean, there is not enough, um, sorry, sorry, sorry, sorry. I have to correct it. I mean, uh, supply supply, of course. And so, I mean, there’s not enough supply, so not enough candidates there and more companies are looking, uh, for someone. So the supply side, so those that are looking for a job can dictate more or less.

What they are looking for, what they want to have. And that’s why [00:44:00] many corporations over the last year added so many additional benefits to the packages to, to, to get more and more attractive.

Mike: I wanted to ask you a bit more now on the sort of broader economic perspective. How does the strong Swiss franc fit into this with my minimum macroeconomic knowledge does not seem to be slowing down. Does that, what economic drawbacks does that have?

Michael: I think, you know, I mean, we are used to a strong currency for many years, for many years.

I mean, if you go back to the last decades, Swiss franc has always, I think the last 30, 40 years on average, two to 3 percent every year. And I think that helped us a lot in order to stay competitive. First of all, And you can really, uh, [00:45:00] compare that to other countries like Germany who have gone the other way because of the Euro.

I mean, the German Deutschmark was also a very strong, uh, strong currency. The same like the Swiss franc up to, uh, the year where they introduced the Euro. And then it got a weak currency and basically Germany step by step lost their, uh, Competitiveness basically. So it’s like a fitness program when you have a currency that is getting stronger and stronger.

A problem is if you have suddenly economic shocks and like a couple of years ago, where suddenly the Swiss franc went from 120 to one, it was in a short period of time, then it’s getting a problem for the industry now. But, uh, Slightly increase in, in, in strength, uh, is really not, uh, not a big [00:46:00] problem. So I don’t see that.

And at the same time, it attracts more people to Switzerland as well, I would say, because for us as a consumer, we are getting richer by that because every time we go abroad. Things are getting cheaper, more or less fast, no?

Mike: Oh, yeah, it’s great.

Michael: Yeah, yeah, and that’s obviously great. And, um, correct, I mean, but what I always say to my friends is, ah, you’re also rich in Switzerland.

No, I’m not rich in Switzerland. I’m only rich when I’m abroad. Yeah, definitely. Because what many don’t realize, of course, uh, That obviously, and you know that the price level here, uh, is very, it’s much higher than compared to, to foreign countries.

Mike: Yeah, six francs for a cup of coffee still gets me.

Michael: Yeah, yeah, correct.

Mike: Okay, so we’ve But I mean,

Michael: Australia has similar issues at the moment, I mean, due to the inflation, I mean, incredibly expensive.

Mike: Yeah. Um, well, it’s expensive for an Australian. Um, again, the, the, the [00:47:00] exchange rates working in my favor very much so, but not for my family when I come and visit. Yeah. Okay, so if the franc continues to steadily increase, we assume at least, um, imminently there is no negative consequences of that.

Are there any other Significant economic challenges, which you think Switzerland faces in the short term could face, I should say.

Michael: Yeah, let’s say not just a short term also medium term. So, uh, Talent shortage and demographic change. I already explained we have the strong Swiss franc I think also energy costs is something we have to look out for.

Fortunately, not as much as in other european countries But we see a little bit similar Yeah Tendency and, you know, getting out of nuclear energy and things like that. Uh, not the right way. So. Investing heavily in renewables, but that does not pay off immediately and things like that. So that’s [00:48:00] definitely a challenge.

And then, you know, the global supply chain disrupt, disruptions we have seen during COVID is an ongoing issue now in a more and more. The polar wilderness, I mean, navigating a bipolar world, uh, is for companies, uh, in Switzerland, difficult and, uh, creating some challenges as well. Now, because you have to, to, to decide a little bit, okay.

Uh, which position do you take? Let’s say you are an international company. You are active in China. You’re active. In the U S and you are in a sector that gets more and more regulated about what you can do, what you’re allowed to do and not. So these are difficult decisions for companies. And that has an impact of course, on the overall Swiss economy.

And the last thing I would like to mention is now. We don’t know what will happen now in the U. S. of course, but if we have an [00:49:00] increase in tariffs, what is a possibility, then it could hit us as well, especially the pharmaceutical industry. We export, so I mean biggest share of export is pharma for us, so it’s the most important export sector and a lot goes to the U.

S. This might, that’s definitely a risk now, but depends on what really happens. We all don’t know that yet.

Mike: Yeah, it’s not just that, it’s also their apparent confrontation of the prices of drugs in the US seems to be a hot talking point in politics. Correct,

Michael: exactly. And that could lead to regulations and so on.

And then the farm industry has to think about and know what they do about that.

Mike: Going back to your comment about energy, Do you, how much, do you know how much of Switzerland’s energy is produced within Switzerland?

Michael: I don’t know it exactly. Uh, but I mean, uh, I think the, the mature, I think we [00:50:00] import only during winter times and we export during summertime

Mike: we export, but, uh,

Michael: uh, yeah, yeah, because we produce too much during summertime, which is okay.

Which is okay. Every country is exporting, importing the whole time. I mean, but on, on, on, on, on, on balance. Not so much the, the, uh, energy expert, but I mean, we still have a high share of Hydrona, 50 percent around. We have nuclear, I think, 25 and then the rest. That’s from the mix quite okay, but don’t forget, we had this at the early point in our discussion.

If you Increase population by 20%. Obviously, they need more more electricity as well. We have now all the tech revolution that consumes massive energy as well. And at the same time, we don’t look so much on the supply side. And that creates a risk in the long run. [00:51:00]

Mike: Do you keep up with the different energy trends in terms of sustainability, which things are being pushed?

Michael: I worked 20 years ago in the renewable energy sector and wind energy. Um, I’m following that a little bit, but it’s more a little bit, what is possible technology and so on. So, and not so much, uh, what is really now going on in this country. Of course, you read that you would like to invest more in renewables in wind energy, but I know, you know, in 20, 20 years ago, I.

I helped to build wind farms in Australia and I realized back there in Australia how difficult it was. To build a wind farm in the middle of nowhere, where in five kilometers only four farmers live, you should think on paper, that’s an easy, easy thing to do to put, put up five wind turbines. Forget it. We got sued the whole time.

We got [00:52:00] debt stress. We got everything. So what I realized back then, that even in a country like Australia, Is such a struggle to get wind farms running. How is it then in a country like Switzerland with such a high population density, it’s nearly impossible. And that’s exactly what we see now. So I’m, I believe in wind energy, but I don’t believe that Switzerland will get a big wind energy boom.

I don’t see that because it’s just, I mean, you know, people say, Oh yeah, it’s great, but not in front of my house. And that’s exactly the same. It’s exactly this issue.

Mike: Not in front of my house, not in the mountains that I walk.

Michael: Yeah, of course. I mean, you could, we could put up a lot on, uh, near the Matterhorn, but I mean, I’m not sure if the tourists would like it.

So as I came to Switzerland 18 years ago, I came out of the wind energy and I looked first, okay, shall I do something in wind energy in Switzerland? I did four weeks of research [00:53:00] and I came to the clear conclusion, never, ever here, and I still stick to that. We will see a couple of wind turbines, but not on a scale like, like, uh, like Denmark, get it?

Mike: I guess it’s also easy when you have an ocean too, I suppose you have some space to put them.

Michael: Yeah, but you know, even with Australia, you had space.

Mike: Yeah, but Australia is also extremely regulated, extremely regulated. Yeah, and don’t

Michael: forget 99 percent back then, uh, Dominated by the coal industry. Yeah. And fighting against the coal industry is not so easy.

Mike: No, we’re not as progressive as what I would like us to be.

Speaker 3: Um,

Mike: Well, I have one more question for you, and this is a more, more generic nature. And it goes back towards a lot of the conversation, which was, um, the workforce and jobs, and I think you’d be a fantastic person to ask this too. And that is what advice do you give to young professionals looking for a job in Switzerland?

Um, I, I know you said that it’s a demand market, no, sorry, a [00:54:00] supply market. So that’s great then, but in terms of making people as attractive as possible to their employers, what can you, any advice, any wisdom? Well,

Michael: um, I get contacted a lot by, by let’s say, potential experts. What I always say, then you have to learn the language that makes it much easier for you.

That’s the big, big hurdle for many. Of course we, you know, there’s still many jobs around where you can also get your job when you speak English. That’s not an issue, but it makes your life much easier if you can speak the local language or at least try to learn that as soon as possible. Apart from that, um, Yeah, I think what we discussed a little bit earlier as well.

So, I mean, I think self responsibility, take your, your career in your own hand is important, learning, learning, learning, uh, look out for the right skill set, more on the technical side, soft skills, I think build and leverage and your network is [00:55:00] important. I’m, by the way, I’m, I’m in the mentoring system of the Zurich, um, RVR.

So that’s the unemployment office where I mentor long term unemployed. And what I always realized that what they realized for me, it was clear, you know, when you build up your network. But you build up a network, but then you’re either not using it or you’re not leveraging it. And then when you’re losing your job, you very often realize that your network was connected to the position that you had in your job.

So I can really advise also young people start already build up a network and move that also a little bit in a personal space. So not just, okay, I work for company A, you for company B, we had a meeting, we are connected full stop. Try to build a kind of network within your professional network that gets a personal private network, because that will [00:56:00] help you.

Long term career, definitely when you change a job or when you’re suddenly unemployed or you just want to do something else. So that’s an important thing. And then do not look just at the corporate sector. So I think consider self employment and starting your own business. I see that as the next really big shift that we see more and more people having their own business.

Being self employed and this offers exciting opportunities. So, I mean, why not create a business that addresses one of the big challenges that we discussed today?

Mike: Michael, thank you. We covered a lot in this. Um, you had something for every question I threw at you. So, thank you very much for your time. I really appreciate it.

Michael: Yeah. Thanks a lot as well. All the best. Alright, bye bye.