Why does inclusive meritocracy matter more than ever for the continued success of Swiss business? Exacerbating skills shortages, demographic change, and the evolving needs of an increasingly diverse workforce are putting businesses under immense pressure today. Therefore, creating optimal conditions to enlarge the talent pool, attract, retain, and advance the “best person for the job” is a business imperative. Truly meritocratic systems do precisely that, and inclusive leadership delivers the perfect tools.
The dramatic demographic shift, with its increasing skills shortage, is a loud call to action to enlarge and fully utilize the (diverse) talent pool.
By 2040, the Swiss labor market will have a shortage of around 431,000 people, representing around eight percent of the current working population (Economiesuisse, 2023). In 2029, the number of people reaching retirement age will exceed the number of young people entering the labor market by over 30,000. In the next ten years, the share of retirees will grow by 26%, and that of employees by 2% (Economiesuisse, 2024).
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The share of over-65-year-olds will significantly outpace the share of 20-year-olds, which is a massive challenge for our economy. In Switzerland, there was an average of 6.5 people of working age for every retiree in 1948; in 2020, this ratio was 3.3:1. By 2050, the “old age dependency ratio” will fall to 2.2. This poses significant challenges for the old-age insurance (OASI or AHV), as the financing of the first pillar is based on the pay-as-you-go system. This means that working individuals continuously fund the pensions of retirees. If immigration follows the (optimistic) projection of the Federal Statistical Office, we will be short 10 billion a year by 2050, barring seismic reforms. (Economiesuisse, 2023)
This trend is unlikely to reverse in the long term: In 2024, Switzerland had the lowest birth rate ever recorded: 1.3 children per woman. To put this into perspective: In 1876, each woman was expected to have 4.4 children (FSO, 2024). While the rest of Europe is experiencing falling fertility rates, too, Switzerland lags behind the EU, where the average fertility rate is 1.46 live births (Ibid). At over 31 years, Switzerland’s first-time mothers are also among the oldest in Europe (Ibid). (If you want to learn more about how companies are affected by the fertility crisis and how they can better support affected individuals, you can read the CCDI’s White Paper about the subject here).
Switzerland somehow needs to “balance out” declining fertility – by making full use of its diverse workforce! If we exclude immigration, the working-age population of Switzerland has been steadily declining since 2020 and is expected to continue doing so (Economiesuisse, 2023). The problem: As other European countries are experiencing similar fertility declines, the conditions to remain in one’s home country may become more attractive. Europe is projected to reach its peak population size and to begin experiencing population decline in the 2030s.
A quick look at the non-working population shows that many are not bringing their talents to the workplace in 2025 (FSO, 2024): 169’000 people are not working (for money), but not actively looking for work, 42’000 with tertiary degrees, 93’000 of them women.
Another clear indicator that companies are not efficiently utilizing the available talent base in the labor market? The high number of underemployed, that is, part-timers who would like to work at a higher percentage but are unable to do so. Currently, this number is at 277’000, 71% of them women, most of the mothers (News Service Bund, 2025). This is a clear indication that there are biases at play: These employees are likely not seen as capable or meritorious.
Employers are not reaching all of the talents. What can we tell about the level of meritocracy in Swiss business today?