Adecco CEO warns of hit from Swiss 10 million population cap

STAFFING company Adecco Group AG has spoken out against a proposal to cap Switzerland’s population at 10 million, warning that restrictions on labour movement would curb economic growth and even harm society.

The comments from chief executive officer Denis Machuel come less than a month before the country votes on the initiative, which has been polling strongly all year.

There’s an “aging population, talent scarcity and skills gap,” Machuel told Bloomberg in an interview. “If you limit Swiss companies’ access to skilled foreign workers, I think that would be a limit to Switzerland’s economic or even societal success.”

Switzerland’s population growth has outpaced most of its European neighbours, rising about 0.8 per cent per year on average, according to the Federal Statistics office. That’s led to an anger about immigration and its effect on house prices and soaring rents.

While Machuel acknowledged that a fast growing population brings challenges and demand for appropriate controls, he said a “smart migration” policy built on education and integration is a better option.

Overly strict measures would limit companies’ ability to hire, with the risk that they invest elsewhere, and the economy loses high skilled roles in technology and life sciences.

“All global companies arbitrate on where they grow best and where they put their resources,” Machuel said.

The recruitment giant said the population cap would also affect jobs like plumbers, carpenters and electricians, as well as in healthcare, given the aging population. For Adecco, the key issue here is that these are jobs that won’t be soon replaced by artificial intelligence.

On AI, that threat has been hanging over Adecco more broadly, as investors worry that the technology will make it easier for companies to move recruiting in-house. 

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Adecco’s first-quarter results earlier this month fell short of expectations on some metrics. Its shares fell to the lowest since 1993 after the company reported disappointing margins.

The group has been pushing back, with its chief saying that the narrative that AI will destroy the intermediation that Adecco does is “fundamentally wrong.” 

He says the Zurich-based firm is well positioned to benefit, as companies will need to increasingly upskill their workforce.

In a recent study, Adecco said that 31 per cent of leaders surveyed thought they had sufficient skills and knowledge to understand the opportunities that AI brings. BLOOMBERG