Cost of Swiss Professionals Increases – Swiss Salaries Rise

Posted on 19 February 2008 by ThomasP

The average hourly cost of labor working in Switzerland increased over the period 2004 – 2006.

Swiss labor costs remain among the highest in Europe, however the strengthening of the Euro has offset the competitive disadvantage of work in Switzerland.

The average hourly wage paid for salaried employees working in Switzerland over the period 2004 – 2006 was CHF 53.90, according to the Federal Office of Statistics (OFS) in Berne.

The OFS emphasized that the progression in labor costs resulted predominantly from the increase in salaries and bonuses paid by Swiss-based companies for higher qualified professionals working in Switzerland and also resulting from the reduction in the effective working hours. The statistic therefore reflects the increasing specialization in the Swiss economy.

However this generalization skirts around large variations in the Salaries increasing in Switzerland

different branches of the Swiss economy. Employees in the sectors of insurance and banking are those costing the most to their employers, with an average remuneration of CHF 80.80 per hour. They present as well the most marked progression in compensation of work in Switzerland, with a rise of more than 12% over the past 2 years. At the Salaries increasing in Switzerlandother end of the scale, employers in the hotel and restaurant industries paid an average hourly wage of CHF 33.20 to their employees, which represents a rise of only 2.9% over 2004 and probably does not even offset the cost of living increases over that period. For clerical workers working in Switzerland, retail stores offered on average an hourly wage of CHF 46.45, an increase of 3.85%.

Between the extremes, teachers were among the better compensated, with an average hourly wage of 66.55%, ahead of public sector administration (CHF 63.85 / + 3%) and those working in the energy industries (CHF 63.15 / 4.15%). The sectors with the highest costs also have the highest demands for well-
qualified professionals working in Switzerland – unsurprisingly the high value-added sectors. In the construction industry, the average hourly salary is CHF 47.60 (+2.9%) and in the manufacturing industry CHF 52.25 (+3.6%).

Overall, it’s the financial services and banking sector which is pushing up the statistics. And the employees from the public sector did not really receive better increases workers in construction, and even less than teachers working in Switzerland.

In Switzerland, the average salary is composed of 83% remuneration directly received, 15% contributions for social security retirement and insurances (such as unemployment), and 1.6% other costs such as continuing education.

In order to compare Switzerland to the rest of Europe, these charges have to be converted into Euros. The OFS calculated that in 2006, the average hourly salary came out to be Euro 33.80, thus ahead of Sweden (Euro 32.15), Luxembourg (Euro 32), and France (Euro 30.30). Thanks to the strong rise of the Euro, the discrepancy between the costs of working in Switzerland and the surrounding EU countries was substantially reduced. It would appear that with respect to cost levels in 2002, Switzerland actually presents a cost reduction of roughly 1% due to exchange rate fluctuations.

Recent studies have called into question the linearity of remuneration and employee fidelity and motivation, indicating that relative status at the workplace is more importantthan absolute compensation in the minds of many professionals working in Switzerland.

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