Executive Search in Switzerland – 2020 Outlook

New to the Swiss: Uncertainty

Confidence in the institutions, in the integrity of the political and economic players, and security with regard to future development are vital for a small open economy like Switzerland. We expect a further loss of confidence and an increase in uncertainty in 2020.

The increased transparency brought to light a multitude of abuses in politics and administration. The impression was created of autocratic politicians, overzealous or incompetent officials who are primarily concerned with their own well-being. At the same time, it became clear that politicians are at a loss as to how to deal with future developments and challenges.

The parliamentary elections in autumn 2019 were a shot across the bows for Switzerland as a bastion of lasting stability. Younger politicians ousted established personalities and smaller parties made substantial gains, a clear signal of distrust.

It is doubtful that much will change quickly, the old forces are still too strong, and distraction is probably their strategy. We expect more emphasis on climate and immigration. The difficult issues such as falling pensions due to the central bank’s negative interest rate policy, rising costs of living in conurbations or high pesticide pollution of groundwater caused by agriculture will only gradually gain weight.

Nevertheless, signs of resistance against the elite are to be expected. Public criticism of the central bank’s negative interest rate policy is likely to increase. We expect the weight of the government, parliament and powerful interest groups in the opinion-forming process to decrease when it comes to votes. For example, it is to be expected that the popular initiative to ban synthetic pesticides to protect groundwater against opposition from the powerful farmers’ and industrial lobby could be adopted. The framework agreement with the EU is likely to have a hard time at the ballot box. The jurisdiction of foreign judges over Swiss matters, an extension of access to social benefits for EU citizens and a reduction in wage protection are not popular everywhere.

The economy is also marked by a loss of confidence; the credibility of top performers has suffered greatly. Wrong decisions and fiddling became obvious. At the same time, they were not prepared to draw the appropriate conclusions. It is also becoming increasingly obvious that the economic elite is also overburdened with the challenges of technological change, increasingly dynamic competition and margin erosion.

Market participants are uncertain. We therefore increasingly expect to act in a way that involves low risks for themselves. Proven recipes such as restructuring and cost-cutting programmes, the focus on short-term successes or sales and the following of the herd will remain central in 2020. However, this risk minimization makes real innovations, which are usually controversial at the beginning, impossible. But because the board of directors and shareholders demand innovation from management – innovation means the future – we expect more and more sham innovations. The classic approach is to hire well-known futurologists, innovation and digitisation experts and possibly even initiate the implementation of individual projects that have already been tried and tested. Without a strategy or roadmap for the future, this will of course only be of limited use. This innovation activism should further increase the demand for IT specialists and engineers.

At C-level and mid-level management, we expect the length of stay to become shorter and shorter. The desire for security means that the board of directors and shareholders have less patience with management and management has less and less patience with their subordinates. Everyone wants to see rapid success. The employees will adapt to this behaviour. We expect an increase in no-shows, contract resignations before taking up a position or terminations during the probationary period, as candidates have received a more attractive offer in the meantime. Demands for salary guarantees and longer periods of continued salary payment are likely to increase.

The dynamic of change will only have a limited positive impact on the recruitment industry. Due to cost pressure, many companies have set up an internal headhunting department. Business is breaking away from the classic employment agencies. In order to compensate for these losses, they are increasingly penetrating the executive search sector with correspondingly negative effects on the level of fees.

Fortunately, Switzerland should benefit from the brightening global economy and the low unemployment rate should continue to support growth somewhat. We hope, however, that decision-makers will take the issue of loss of confidence on their radar screens, as otherwise economic data will deteriorate rapidly.

For information contact Christian Ulrich, Cornerstone Zurich