63% of Swiss employees have seen a negative impact.
Stability, maturity, and security. These keywords defined the Swiss economy and position in Europe for the past decades. Even during world wars, the country was a neutral zone as they avoided conflict at all costs, predicting this would bring down their economical status which they greatly took care of.
Just like the rest of the world, Switzerland is facing an unprecedented economic downturn during the Corona virus pandemic. The Swiss government shut down much of the public life in the country, which as a result, created a considerable impact on the domestic economy. Additionally, as other countries and governments responded in similar manners to the pandemic, there has been a significant decline in global trade and in the demand for Swiss exports, such as chocolate, cheese, chemical-pharmaceutical products, watches, and textiles.
The Swiss State Secretariat for Economic Affairs assumes that output will fall by around 25% compared to 2019, GDP by 10% and unemployment will rise to 4.5%. Although the scale of the economic downturn cannot yet accurately be quantified and the estimates involve considerable uncertainty, it is already clear that the COVID-19 crisis has hit the Swiss economy extremely hard, with a big impact on both employers and employees. 77% of all self-employed individuals have had a negative impact, 18% of which have had to close their business, and 21% have seen business drop to zero whilst keeping it on artificial breathing. However, looking on the bright side, 10% report an increase in business, enabling them to benefit from the crisis, an example of which would be mask production or management and manufacture in the pharmaceutical and health sectors.
“It is already clear that the COVID-19 crisis has hit the Swiss economy extremely hard, with a big impact on both employers and employees”
Having had years and decades of great economical stability, Switzerland has managed to help its citizens survive the pandemic in the best ways possible. More than 100,000 small and medium-sized enterprises had successfully applied for the loan program launched by the Swiss parliament, in cooperation with banks, the sum reaching over 16 billion CHF. This tsunami of applications demonstrates how serious the situation for businesses is in the country, and fortunately, how much the nation itself is willing to help. In comparison with other countries in the neighbourhood, Switzerland has intervened fairly rapidly to support businesses and has kept bureaucracy to a minimum, helping to prevent a wave of insolvencies – at least for the time being.
Employees have been massively affected by the COVID-19 crisis. The Deloitte survey shows that almost two-thirds of the Swiss employees, 63%, have seen a negative impact. 54% of which have had to reduce their hours, 27% have had an overtime cut, 24% have lost their annual leave, and 2% unfortunately, their jobs. The extent to which individual employees are affected depends on a number of factors. Firstly, it has to be analyzed whether a particular occupation relies on close physical contact with other individuals, as the more the sector depends on close physical contact, the more it is likely to be affected, leading to worse unemployment figures in the particular category. Another indicator is the percentage of online workers from home. As we all know jobs are different and so are the responsibilities that come with them. Employers in the consulting sectors, or other similar occupations, which indeed are fortunate enough to work online without a problem, have witnessed much less turbulence in their working life. Only small numbers of employees have had their hours reduced to zero and have been moved on to short-time work compensation payments or have actually lost their job. In other words, the better suited a sector is to home-working, the smaller the impact on the workforce. In such cases, working from home is cushioning the impact of government restrictions.
“More than 100,000 small and medium-sized enterprises had successfully applied for the loan program launched by the Swiss parliament”
Unfortunately, for the near future of not just Switzerland, but the rest of the world, the crisis is far from over. As the Swiss have created a loan system, their economic reserves are melting faster than expected, leading the nation to re-evaluate how they plan on curing the wounds. The Deloitte survey indicates that 24% of self-employed businesses expect to become insolvent and 19% of those in employment expect to lose their job in the near future.
By Mina Vučić