Rising gold prices, scarce skills: the two pressures weighing on Swiss watchmaking costs

Gold has risen roughly 60 per cent over five years. For a manufacture whose cases, bracelets and clasps consume kilograms of precious metal every week, the impact on production costs is direct and lasting. At the same time, a less quantifiable but equally structural shortage is setting in: that of skilled hands. Watchmakers, regulators, polishers, setters: the industry's recruitment needs far exceed current training capacity.

These two pressures are different in nature and in horizon, but they converge on the same income statement. Treating them separately, one via financial hedging and the other via human resources, means missing the point: together, they are redefining the sector's cost structure.

Raw materials: hedge, pass on, rethink

Against the rise in gold, the major houses combine three levers. Hedging first: forward contracts and strategic stockpiles smooth out jolts, provided one accepts that hedging is insurance, not a bet. Price pass-through next: the high end enjoys favourable price elasticity, but it is not infinite, and the repeated increases of recent years have tested part of the clientele's patience, as the vigour of the pre-owned market attests.

The third lever is the most interesting: rethinking the material itself. Development of proprietary alloys, the rise of steel and titanium cases in segments formerly reserved for gold, work on certified recycled gold that simultaneously addresses the cost of supply and the demand for traceability. The materials constraint then becomes a territory for product innovation.

Skills: the real bottleneck

You can buy gold at market price. You cannot buy an experienced regulator: they must be trained, and that takes years. Watchmaking schools are running at full capacity, companies are competing for graduates, and the salary bidding war between neighbouring manufactures in the Jura arc creates no new skills: it shifts the same people while raising costs for all.

The most advanced houses are internalising the response: in-house training centres, broadened apprenticeship pathways, retraining profiles from precision mechanics, and above all retention through career paths rather than salaries alone. A watchmaker stays where they grow. Manufactures that offer trajectories (complications, restoration, prototyping) retain better than those that offer only bonuses.

Human capital, an asset to manage like the gold inventory

Our recommendation to senior management fits in one image: treat your skills pyramid with the same rigour as your precious-metal inventory. Map critical know-how, identify positions held by a single person, produce costed transmission plans and review them at board level. In our manufacture audits, the most frequent fragility is neither financial nor commercial: it is a key workshop that rests on two people within five years of retirement.

The rise in gold can be read in market prices. The loss of a skill cannot be read anywhere, until the day it makes a product impossible to manufacture. Of the two inflations, the second is the more dangerous.

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