Interview with Bettina Schaller

swissVR Monitor: You have enormous experience as an expert in human resource management, giving you a particularly good overview of the impact demographic change will have on the Swiss labour market. What do you see as the main impact it is already having and the future challenges it represents?

Bettina Schaller: Demographic change is already having a substantial impact on the Swiss labour market. One of the most serious challenges is the country’s ageing population – the high number of baby-boomers moving into retirement is creating a growing shortage of skilled labour. At the same time, falling birth rates and social change mean fewer and fewer young people entering the labour market. In the short term, weaker economic growth is helping to cushion these problems, but the long-term issue remains. Structural change, such as measures to support families or initiatives to make it easier for individuals to combine work and family responsibilities remains crucial. As well as demographic ageing, younger generations have different expectations of employment culture and different values: issues such as sustainability, meaningful work and work-life balance are increasingly important to them and determine how attractive individual companies are to younger people. Swiss businesses will continue to be dependent on migration to some extent, but it is likely to become more difficult to recruit skilled labour from Europe as our neighbours also grapple with their own skills shortages.

swissVR Monitor: What do you see as the most important changes the labour market needs to make over the next few years in response to demographic change?

Bettina Schaller: Over the coming years, the labour market will move further towards flexible working models to help meet the needs of an older workforce. These could include working from home, part-time working, a flexible retirement age, and an opportunity to reduce hours of work in the last few years before retirement. At the same time, the demand for technology and automation will continue to grow as more employees retire and businesses attempt to offset the resulting decline in productivity. And an ageing population may also result in demand-led changes on the labour market: an older population will purchase different goods and services, so for example the demand for skilled staff in the area of health is likely to increase.

swissVR Monitor: Our Board survey shows that most companies are making their employment models more flexible in response to demographic change, for example by introducing working from home, parttime working or a flexible retirement age. How do you rate the effectiveness of such an approach, given the challenges you have just described?

Bettina Schaller: Making employment models more flexible is an important part of tackling demographic change and enables companies to boost employee satisfaction and productivity, with a positive impact on staff retention. But such measures in isolation are not enough: they need to be accompanied by further initiatives of the kind we already know about – expanding support and mentoring, promoting family-friendly working arrangements, combatting age discrimination, and actively integrating workers from abroad. And we will have to address a new challenge – how AI agents will influence work. Right now, it is too early to assess this, but a holistic approach will be the key to long-term success.

swissVR Monitor: A majority of Board members also report that their company has boosted its productivity by using technology and automation as a response to skills shortages. What part could technologies like artificial intelligence (AI) play in tackling demographic change?

Bettina Schaller: We should link artificial intelligence with the emergence of AI agents, as both play a crucial role in tackling the challenges posed by demographic change. They enable companies to automate processes, replacing the work done by employees who are retiring. AI also enables employers to boost their employees’ efficiency – and hence also their productivity – and to tap into new areas of business. It is crucial though to ensure a harmonious interaction between human and machine. Older workers in particular would benefit from targeted measures to help them understand the benefits of AI and to make better use of the technology. Transparency and training are the key to boosting confidence in these technologies and ensuring that humans are always in control. And it is important that in the case of core processes, for example recruiting to fill a staff vacancy, AI is used only to support the process, with a human always making the final decision. Companies need to ensure that the technology they deploy does not cause harm to or discriminate against individuals. The aim is an ideal interaction between human and machine. Indeed, stipulating the importance of the ‘human in the loop’ is a key condition of the EU’s Artificial Intelligence Act, which sets out preliminary benchmarks for the use of AI beyond the HR function.

swissVR Monitor: Which further measures would you consider to be essential if companies are to be able to tackle the impact of demographic change successfully?

Bettina Schaller: I am waiting for the growing interest in longevity to become evident in company projects. Swiss SMEs in particular are continuing to use tried and tested ways to keep their ageing workforce healthy, motivated and productive while also trying to attract younger generations. The Swiss apprenticeship system means that for some time as many as four generations have been working in the same company at any one time, and this has an influence on corporate and management culture. As well as more flexible employment models and the use of technology, lifelong learning and targeted in-service training are crucial. Lifelong learning helps companies adapt their employees’ skills to the changing demands of the labour market. And companies also need to promote an inclusive corporate culture that actively supports diversity and equality of opportunity. A further key measure is collaboration with training institutions so that companies can identify and support future talent at an early stage. Ultimately, we won’t be able to avoid a certain level of migration in future but we do need an integrated approach that involves companies, their employees and policymakers.