Competing with the state and large companies for skilled workers

Swiss SMEs continue to face a persistent shortage of skilled workers - as shown by AXA's latest SME labor market study, which was conducted for the fourth time in 2025 and again this year with the Sotomo research institute. Despite rising unemployment figures, the labor shortage remains by far the biggest challenge for SMEs: 44% had problems filling vacancies most, most or all of the time, while a further 40% had at least some difficulty finding suitable staff. Only 16% had no problems filling vacancies. The shortage of skilled workers is further exacerbated by staff shortages - a problem that has worsened significantly over the last four years: For around a quarter of the companies surveyed, this issue is now one of the biggest challenges. "Despite the economic slowdown, the labor shortage remains a structural problem for SMEs," says Michael Hermann, Head of Sotomo.

Competition with large companies and the state

To make matters worse, SMEs are in intense competition for talent not only with each other, but also with large corporations and state institutions. SMEs feel the pressure of competition from large companies much more strongly than from the state: 67% feel that they face strong or moderate competition from large companies and half feel that they face strong or moderate competition from the state. Although most SMEs consider themselves to be more attractive than large companies and the state in terms of values such as team spirit, appreciation and a familiar working atmosphere, respondents see themselves at a clear disadvantage compared to large companies and the state when it comes to hard factors such as salary, pensions and career opportunities.

Professional expertise: in high demand, but the ability to work in a team is key

Experienced and highly specialized specialists are particularly in demand, but difficult to find - 83% of the companies surveyed found it difficult to find highly specialized specialists, while 68% found it difficult to recruit managers or executives. This is in contrast to specialists without professional experience, the majority of whom are rated as fairly or very easy to find.

In line with this, SMEs cite insufficient specialist knowledge as the most common recruitment difficulty. However, other factors also play an important role when hiring new employees. SMEs pay even more attention to the reliability of their employees (75 %) and around two thirds also consider honesty to be one of the most important aspects when recruiting. Social fit and commitment to the employee's team are also very important (55 % and 54 % respectively). In direct comparison, team fit is often weighted even higher in practice: If there is a tension between professional competence and team fit, almost three quarters of respondents (72 %) opt for the applicant with the better social fit. Only 19 percent would give preference to the professionally stronger but less team-compatible profile. Michael Hermann concludes: "Soft factors such as social integration into the existing team are playing an increasingly important role in the concrete decision in the application process today."

Diversity: valuable for the image, but not very concrete

While diversity programs in the US are increasingly being pushed back under political pressure from the new administration, Swiss SMEs continue to uphold diversity as a goal. 57 percent of the companies surveyed stated that diversity in the company is important to them. SMEs also appear to be convinced that diversity is a profitable argument for their company, or has become more important. A third of all SMEs surveyed pay more attention to diversity when recruiting than they did three years ago, while the figure for large SMEs with up to 250 employees is as high as 54%.

Nevertheless, the implementation of concrete diversity measures often remains vague: only 45% of companies have taken concrete measures to promote diversity, while 55% have refrained from taking specific steps. The contribution to diversity in the team is also of limited relevance in recruitment and is only rated as particularly important by 27%. "In some cases, diversity seems to be more of a lofty goal than a strategy based on concrete measures," says Michael Hermann.

Where measures exist, they are most frequently aimed at recruiting young employees (23 %). Companies also take measures to improve gender representation: Around 18 percent to increase their proportion of women and ten percent to increase the proportion of men.

Employees in a strong negotiating position

The recruitment process is therefore not an easy one for SMEs. In addition to the high level of competition in the market and applicants' lack of specialist knowledge, excessive salary expectations are also a common obstacle - particularly in the service sector, where almost half of SMEs (48 %) perceive such high salary demands. In the manufacturing sector, wage pressure is somewhat less pronounced (31 %). However, more companies there (42 %) than in the service sector (32 %) are confronted with the fundamental problem that no or too few people are applying for vacancies.

In general, the ongoing labor shortage has shifted the balance of power in favor of employees: According to the study, two thirds of SMEs (63 %) now see employees in a stronger negotiating position. A large proportion of SMEs (69 %) also notice this greater bargaining power in the behavior of their employees. Around four out of ten companies are confronted with increased wage demands, while just under a third of SMEs are experiencing increased demands for flexible working hours. This is particularly evident among larger SMEs: 89 percent have observed a change in their employees' behavior.

Flexible solutions are in demand

In response, the companies surveyed are focusing on greater flexibility: more than half of SMEs now offer individual working time models and part-time options. 56 percent of companies are focusing on more flexible working hours, 50 percent on more flexibility in terms of workload. Other measures include additional benefits (39 %), better pension and social benefits (21 %) and higher wages (17 %). "SMEs need to find creative solutions to remain attractive to employees - flexibility is a central keyword here," explains Michael Hermann.

Optimistic outlook for the future - but challenges with succession solutions

Most SMEs are optimistic about the future: 91% of the companies surveyed believe they will be in business in ten years' time. Nevertheless, the challenge of safeguarding their existence is not an easy one. According to the respondents, the biggest threats to the long-term existence of SMEs are most frequently economic uncertainties (40 %), changing customer needs (35 %) and a lack of young talent (26 %). The problem of young talent is also reflected in the fact that 44% of the companies surveyed consider the search for a succession solution to be difficult.

Source: www.axa.ch