The Rising Cost of Labour in Switzerland and Why Outsourced Solutions Can Help

Given the current challenging market conditions, companies that are able to find new ways of streamlining their business processes without significantly increasing costs will have a distinct advantage.

In many cases, this may involve outsourcing certain tasks to third-party service providers rather than hiring new staff members or using expensive consultants. In Switzerland, the cost of labour is particularly high. Additionally, because of the high value placed on education in general, demand for skilled workers exceeds supply in most sectors. As such, wages for these positions are continuing to rise and have become an essential factor in determining how an organization expands and whether or not it is more cost-effective to establish a new branch or satellite office. 

This article explores some common costs associated with labour, as well as how outsourced solutions can help you save money without sacrificing quality.


Rising Costs

One of the biggest hurdles facing companies today is the rising cost of labour. This is particularly the case in Switzerland, where the influx of workers from outside of Europe has created an imbalance between supply and demand for skilled workers. This has led to a significant increase in wages for many jobs in the country, especially those in STEM fields. In fact, wages for engineers have risen by as much as 50% over the past decade! The impact of this phenomenon is significant. The high cost of labour has also slowed overall economic growth and has made it more difficult for smaller businesses to expand.


What is driving the increase in wage costs?

There are several key factors driving the increase in wage costs. The most immediate factor is that, in many cases, a shortage of skilled workers has led to a bidding war for skilled labour. This has resulted in some professionals receiving wages that are well above the market average. Additionally, the Swiss government continues to increase the minimum wage in line with this trend. This has increased the wages of many workers in the country but has particularly affected employees working in the service sector. Another factor is that many companies in Switzerland depend on highly-skilled foreign workers to fill their rosters. To attract these employees, a number of companies are providing more comprehensive benefits packages. This has increased the overall cost of employing workers in Switzerland and is likely to continue to do so in the future.


Outsourcing as a way to reduce operational costs

One way to reduce operational costs, while also ensuring that your company remains productive, is to outsource certain business processes to third-party service providers. Outsourcing allows you to take advantage of economies of scale by consolidating work that would be difficult to do with a small in-house team. In many cases, it also allows you to tap into a wide range of expertise and experience that you might not be able to access in your home country. In the case of Switzerland, outsourcing can be particularly effective for sales, customer service, IT, legal, marketing and bookkeeping. Finding the right employees to join your team is essential to the success of any business but the rapid digitization which has occurred over the past few years, coupled with the remote working shift, has opened up new options for employers. Outsourcing some of the functions within your business to remote experts can help you find the workers you need in a faster manner, and more cost-effectively. As we have seen, not all jobs need to be executed from a physical office space anymore.


Finding the right outsourcing partner

Before you begin outsourcing any part of your business processes, it is important to select the right partner. Finding a partner that is a good cultural fit is essential to the success of any outsourcing relationship. You should also carefully consider the type of outsourcing relationship into which you are entering. Outsourcing is a good solution for long-term projects but it is not limited to this time frame. Outsourcing for the short-term or on a case-by-case basis can be very helpful, offering your organization added flexibility if you find the right partner. It can noticeably reduce your costs, immediately and in the long run. When selecting an outsourcing partner, it is critical to consider the type of work you want to outsource. This can help you find partners who are an ideal cultural fit, specialize in the type of work you need done, and understand the challenges and pressures you face on a day-to-day basis in Switzerland.


Key Takeaways

- The economy has evolved: it has become increasingly important to find new and efficient ways of doing business. 

- There has been a surge in outsourcing over the last few years, offering first-movers a distinct advantage.

- You no longer need to hire new, local staff members to complete tasks or projects, or to fill open roles; outsourcing to third parties can provide a faster, more flexible and cost-effective solution.

- If you choose to outsource, finding the right outsourcing partner is essential to your success. 

- When selecting a partner, it is important to consider partners who understand your needs and the type of work that you want to outsource.

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