Back-offices have lost more jobs than other functions. But that might be changing now.

The news came as a significant surprise. The number of finance sector employees in Switzerland increased slightly for the first time in a decade in 2020, rising by about 414 full-time equivalent workers.

On top of that, another 150 jobs were added in the first half. Although that is not a large number when looking at the total stock of the more than 91,200 bank jobs domestically, what it does is provide a glimmer of hope after a decade of cuts.

Unfavorable Trends

According to Swiss Banking's Banking Barometer 2021, it is also surprising where banks are bulking up. Besides the expected gains in private banking, the number of jobs in back-offices also seems to be on the rise.

This is surprising given how hard such functions have been hit by a number of unfavorable trends seemingly aimed squarely at their numbers, prompting them to suffer the most losses among the 10,000 jobs cut in the sector over the past ten years.

Backyard Shed

Offshoring to lower-cost countries overseas such as Eastern Europe or India. The automatization of processes and the higher qualifications required with oncoming digitalization. Time seemed up for the legions of bean counters sitting in the backyard sheds of Switzerland's banking palaces.

But that might no longer be the case. The barometer rates job creation perspectives in logistics and operations, two back-office functions, as the most positive around currently.

The survey that forms the basis of the report expects one in every three banks to create jobs in those two areas this year.

Ralph Hamers Engineers

UBS-CEO Ralph Hamers (German only) recent statement backs that up. At an investor conference, he said he wants to attract an «engineering culture».

The role of the «doers» should be valued far more highly. That means that the bank wants to attract the best tech talents. At the same time, UBS has been moving back to outsourced back-office functions for a number of years.

Headhunter Fever

This all has not gone unnoticed by headhunters. Page Executive Stephan Surber told finews.ch (German only) that leadership and development activities related to back-office processes are increasingly taking place in Switzerland. «New jobs are being created, particularly in IT.»

But Surber also knows there is a catch. The demand is for highly educated applicants with technical or IT backgrounds. «Work has become very technology-dependent», he says, «and you can't compare it with the back-office jobs from other eras.»

A Tight Lid

In UBS's back-offices, there are currently job postings for project managers, data and business analysts as well as calls for Hamer's touted IT engineers. Credit Suisse is keeping a tight lid on its recruiting activities and not providing any information but the job postings seem to be at about the same level as they were a year ago despite the recent scandals affecting it.

The changes in profile requirements also show up in a survey by a sector lobby organization, which expects that continued digitalization will lead to expanded information technology areas and activities.

That could lead to a 2 percent gain in staffing levels, and an 8.6 percent one over the next ten years - more than any other area in banking.

Manual Activity on the Wane

Manual processes will continue to be rationalized by continued automatization, according to the lobby organization, with repetitive and rule-based processes being replaced by algorithms and bots.

Employees will only undertake so-called «exception handling» tasks. That will lead to one in four jobs being cut in back-office areas over the next ten years.

Surber thinks the same thing. «The wave of back-office automatization is by no means over», he says. Banks are always going to keep a very tight lid on costs. But there will always be a demand for «well-educated experts in technology.»

Others Pay Better

Automatization and stricter job requirements will pose a challenge, particularly related to training. Previously, simple tasks in the back offices served as an ideal way to train young recruits.

Now it seems like they are fighting for university graduates who are increasingly interested in other sectors. And tech companies are in a position to pay higher salaries than banks are.