Switzerland has the second highest gross domestic product (GDP) per capita in the world and ranks among the world’s most competitive business centers. Its remarkable stability and carefully guarded neutrality also make Switzerland the chosen location to headquarter an array of government and nongovernment organizations, including many associated with the United Nations. Thanks to its international ties, advanced professional services sector and high quality of life, Switzerland serves as a magnet for qualified workers from around the globe.
- Switzerland ranks at the top of the Global Talent Competitiveness Index by INSEAD, with Swiss workers being well-educated and multilingual with above-average international experience.
- Switzerland has a competitive tax environment and the lowest rate of value-added tax in Europe: 8% is levied on most goods and services, 3.8% on accommodation services and 2.5% on necessities and other everyday items.
- The country’s prosperity stems from a penchant for innovation. By investing heavily in research and development and partnering with renowned research institutes, Swiss enterprises habitually strive to make improvements to their products, services, and processes.
- Swiss culture is distinguished by its diversity and is heavily influenced by the major European cultures of neighboring nations, making it an ideal place to attract an array of prospective employees.
- With highly sought after, one-of-a kind tourist destinations, including ski resorts and hiking trails, tourism is an important pillar of the Swiss economy.
Q&A with Nick Broughton, Partner, GoGlobal
What are a few things to keep in mind when hiring in Switzerland for the first time?
Switzerland’s main sources of employment law are the Federal Code of Obligations (containing standards in employment contracts and termination of employment) and the Federal Labor Act (containing standards for many conditions of employment, including hours of work and overtime pay). Mandatory collective bargaining agreements also apply in some industries.
The recognized types of employment contracts in Switzerland are an employment contract for an unlimited period, a fixed term contract and an apprenticeship / vocational education and training (VET) contract. While Swiss law does not stipulate a specific form for a contract of employment, a written contract is recommended. A collective labor agreement (CLA) may stipulate the need for a written contract.
It’s important to note that fixed-term contracts can only be issued in cases where a valid reason exists, such as a maternity cover, a time-based project, or a replacement due to sickness. Fixed-term contracts may be extended a maximum of two times and may not exceed more than 24 months. Any fixed-term contract that exceeds 24 months needs justification or it will be deemed by law to be an indefinite contract.
Swiss law contains no provisions defining and addressing bonuses specifically. According to its characteristics, a bonus will be considered either as a gratification or as part of the salary of the employee. The distinction between gratification and salary is crucial in Swiss employment law as the rules governing gratifications are much more flexible than the ones applicable to the payment of the salary.
Swiss Employees are entitled to four weeks of paid annual leave per year, of which at least two weeks must be consecutive. Employees under the age of 20 are entitled to five weeks’ paid vacation. Where an employee has not yet completed one year’s service, their holiday entitlement is fixed pro rata. The employer determines the timing of the holidays, taking into account employees’ preferred dates to the extent they are compatible with the organization’s business needs.
What makes GoGlobal’s Employer of Record services in Switzerland special?
With a local team that has a lot of experience in hiring and managing workforces in Switzerland, clients will be consulted regarding employee engagement as well as throughout the entire employee life cycle. Additionally, clients have a designed account manager for each client, ensuring that onboarding goes on seamlessly.
What’s led to the explosive growth of Switzerland business?
Switzerland boasts unique advantages that make it a prime spot for global business expansion, including innovation, a liberal economic system, political stability, international ties, top research and education institutes, a strong healthcare system, outstanding infrastructure, a competitive tax environment and a high standard of living.
Notably, the labor market in Switzerland is marked by liberal legislation, light-touch regulation, and exceptional social stability – making it an attractive place to recruit and hire talent. Several hundred professions are geared toward the requirements of the economy, providing businesses with a highly qualified and experienced pool of talent.
GoGlobal is the world’s fastest growing, privately owned Global Employer of Record (EOR) service provider, with a globally distributed and remote workforce. GoGlobal’s technology-enabled EOR solution allows businesses of all sizes and geographies to hire staff globally without the need to set up a local entity, opening new doors to rapid expansion and growth. GoGlobal clients can hire top talent anywhere in the world – quickly, cost effectively and compliantly.