Recruiting Top Talent in Switzerland

Swiss Top Talent

Finding and recruiting top talent in any overseas territory poses many potential trip wires for companies taking steps to build their international profile.

This is certainly the case in Switzerland, one of the world’s wealthiest nations with a highly educated and qualified workforce. Unemployment steadily fell throughout 2021 to a low of around 2.5% towards the end of the year, adding to an already competitive employment market.

These attractions – and the challenges they bring – underline why Bradford Jacobs’ global experience is indispensable for taking the smartest recruitment route into Switzerland – ideally placed for international expansion among EU members and further afield.

Bradford Jacobs’ benchmark platforms as a Professional Employer Organization (PEO) have worldwide reach and include a total understanding of the challenging complexities of Switzerland’s economy and employment market. You can trust Bradford Jacobs to put the brightest talent in place for your company.

The Recruitment Process in Switzerland

Job-seeking in Switzerland? A first step will be to understand the employment market and its leading sectors. The business landscape is dominated by small to medium-sized enterprises (SMEs). The service sector accounts for over 75% of Gross Domestic Product, primarily in banking, finance, and insurance, with the bulk of the balance taken by industry.

Switzerland has no national minimum wage, but average salaries are among the highest in the world – with a cost of living to match. The workforce is highly qualified and well-educated … facts to bear in mind for incomers. Adjustments may also be necessary to a formal business environment with work cultures and etiquette that can vary between the German, French and Italian-speaking regions.

Remember also that although Switzerland is not a member of the European Union it is part of the ‘single market’ and therefore there is free movement to live and work throughout the economic bloc for Swiss and EU citizens.

Recruitment agencies are often sector-specific, with the built-in advantage of understanding the employment market in detail and where to find – and place – candidates with relevant skills.

Employers and jobseekers also have the option of registering with Regional Employment Centers (RAV), which hold databases of highly skilled professionals as well as companies that are looking to fill positions.

Switzerland is also a member of EURES, the ‘job bank’ that links employers and potential candidates across the EU’s freedom of movement employment market. Switzerland’s National Coordinating Office for EURES comes under the State Secretariat for Economic Affairs.

New arrivals can be reassured that Switzerland provides a comprehensive framework of regulations and statutes that safeguard employment rights.

Recruitment is the first stage of making your company operational and competitive in Switzerland.

Legal Checks on Employees in Switzerland

• Scope:  Most checks are permissible, provided they are related to the position being applied for and are made with the applicant’s permission.
• Medical Checks: Allowed where the workload demands a certain level of health and fitness
• Drug Screening: Permitted only where relating to specific roles
• Credit Checks: These must be relevant to positions such as banking, finance, or attorneys
• Social Media:  Accounts cannot be accessed by potential employers and used as part of a screening process
• References and Educational Qualifications: These can be verified with the applicant’s permission
• Criminal Records:  Can be requested in relation to roles such as childcare, but the information cannot be stored electronically due to data protection requirements

Required: Ensuring applicants have the correct visas and work permits assigning the right to live and work in Switzerland.

Basic Facts on Hiring in Switzerland

Companies hiring staff for expansion into Switzerland must comply with a framework of employment, contract and registration regulations that are applied at state and cantonal level. Some areas are not subject to mandatory federal regulations, which is when collective and trade union agreements can come into play. Basic requirements include:

• Within one month of being hired, employees should receive written notice of the details of the contracted parties, start date, role, work location and schedule, salary, and payment frequency
• Contracts can be verbal or implied but some provisions that differ from statutory regulations, such as overtime or notice periods, are valid only if confirmed in writing
• The contract must comply with all mandatory requirements and where they have been improved by collective agreements on relevant industries or sectors
• Employees in manufacturing and processing companies must have access to their policies on health and safety. Where necessary disciplinary policies should also be available
• Contracts should stipulate whether they are fixed term or indefinite
• Probation periods, normally one month, can be extended to three months if written into the agreement

After hiring and onboarding, employers must be aware of other considerations. Minimum standards apply to such as sick leave, minimum wages, working hours, maternity allowances, paid vacations, termination and severance, notice periods and social insurance payments. Some are covered by federal legislation, others implemented by Switzerland’s 26 cantons. Collective agreements can also improve statutory minimum standards but cannot undercut them.

Companies must establish a legal entity in Switzerland in order to operate payroll for their employees. The typical choice is for a private limited liability company, Société á Responsabilité Limitée (SARL), to operate under the Swiss Companies Act, although opening a branch is another option. Registration procedures include:

• Registering the company name in the relevant canton’s Commercial Register (Registre du Commerce) which is published in the Swiss Official Gazette of Commerce
• Depositing CHF 20,000 (€19,272, US$21,780) in a Swiss bank account
• Registering at least one founder, an individual or entity, with no upper limit
• Confirming at least one director is a Swiss resident
• Appointing a local legal representative
• Opening a local registered office
• Providing notarized Articles of Association of the subsidiary
• Registering with the Federal Tax Administration
• Applying for relevant business licenses for area of operation

Once staff have been hired, the employer’s responsibilities include:

• Filing forms with the Federal Tax Administration for remitting tax
• Registering with the Federal Social Insurance Office (FSIO) and the federal social insurance system (AHV) and the pension fund (BVG)
• Dealing with differing tax rates as they are applied by the state, by 26 cantons and 2,250 municipalities and in some cases the church
• Assessing liability where all four classifications of taxation apply and withholding taxes due to the state, cantons and municipalities at various rates and percentages each month
• Remitting withheld taxes monthly or quarterly as required
• Filing annual tax returns, generally by March 31 for federal authorities and most cantons, with the tax year running from January 1 until December 31