Great talent is everywhere, and if you’re looking to hire remote, global talent in Europe, Switzerland could be next on your list, thanks to its proximity to other European nations, top-tier universities, and liberal employment laws.
For employers looking to tap into Swiss talent, hiring employees may seem like a complex process, however, it doesn’t have to be. An Employer Of Record (EOR) can be ideal for companies looking to hire and pay talent around the world without the legal and administrative hassle. For example, you may not know that in Switzerland, vacation entitlement is awarded based on an employee’s age or that compared to other European countries, Switzerland has fairly liberal employment laws, particularly when it comes to terminating contracts.
To overcome the nuances in Swiss working culture and to ensure a seamless process, work with an EOR. This article will walk you through the reasons, processes, and advantages of hiring employees in Switzerland through an EOR.
Why Hire Talent in Switzerland?
Switzerland boasts a prosperous, modern, and liberal market economy with low unemployment, a highly skilled labor force, and a gross domestic product (GDP) – among the highest in the world. Switzerland's economy benefits from highly developed financial service sectors.
Switzerland is located in the heart of Europe, bordered by Germany to the north, France to the west, Italy to the south, and Austria and Liechtenstein to the east. Politically stability and close economic ties to bordering countries make Switzerland an attractive location to do business. Forbes even ranked Switzerland 10 out of 161 countries for Best Countries for Business.
How Can I Legally Hire an Employee in Switzerland?
To hire new employees in Switzerland, your business must have a local legal entity. The process to establish a local entity can be complex, time-consuming, and expensive. Doing so is only worth it if you are planning to set up long-term operations in the country.
This is where EORs come in handy. An EOR acts as a broker for hiring talent outside of the country you legally operate within. It will already have an entity set up with the legal framework in place to do the hiring for you. This gives you more time to focus on managing relationships with your employees and growing your business. Going through an EOR is a simple way to hire talent in Switzerland without all the legal hassle.
What Does an EOR Do?
Simply put, EORs take care of the legal procedures while you manage your employees. The legal frameworks for hiring in Switzerland can be quite different from those in the US and Canada. EORs handle worker visas and work permits, employment contracts, payroll, local compliance, termination, and any other HR services.
To learn more, check out our article on everything there is to know about EORs.
Contracts and Documentation
An EOR will handle the tedious administration involved in preparing contracts. Working with an EOR will guarantee that employment contracts are compliant with Swiss regulations. EORs will also help collect the correct documentation, such as employment offers, signed contracts, banking information, and more. This way, you can focus on growing your business and connecting with your employees.
Employee Insurance and Benefits
When the world is your competition, it pays to incentivize new and existing hires with attractive benefits like medical, dental, vision and life insurance, and retirement savings plans. A comprehensive EOR will have those kinds of benefits built into its service offering.
Vacation and Public Holidays
In Switzerland, employees who work five days per week are entitled to 20 days of annual paid vacation. In addition, Switzerland has 42 public and religious holidays. Whether or not your employees are entitled to time off will vary by region. You can access a full list of Swiss public holidays for 2023 here.
An EOR will help companies navigate the public holidays in Switzerland and keep track of paid time off and different types of leave.
Taxes
Switzerland has a complex three-tiered taxation structure on the national, regional, and local level. This means income tax rates may vary a lot within the country. Social contributions are split equally between the employer and the employee. Mandatory insurance may increase the employer contributions.
Understanding the tax laws in Switzerland can be a long and complicated process, but it is necessary to ensure you are paying employees compliantly and abiding by local Swiss laws. Thankfully, an EOR can handle the logistics and ensure that payroll is processed properly and per the regulations in whichever country you are operating.
What Are Your Responsibilities?
While the EOR handles everything related to legal and HR processes, everything else will fall to you as the employer. You take care of your global staff in the same way you would your local hires. That means search and recruitment, company onboarding, training, management, day-to-day communications, progress tracking and so on. With an EOR taking care of the legal complexities, you’re able to focus on building connections with your remote staff.
While the relationship with the employee won’t be all that different through an EOR, you need to be clear with your staff on the legalities of their contracts. Of course, retention is also up to you. You will need to consider how you help your staff grow and succeed in their new roles at your organization.
What Are the Advantages of Going Through an EOR in Switzerland?
Using an EOR to hire talent in Switzerland will save you time, reduce costs, and mitigate risks.
Setting up an entity for hiring in Switzerland is time-consuming and frankly, can be a huge headache. Since the EOR is already set up to hire employees in the country, it will be faster and easier to start hiring right away. In fact, the process won’t be that much different from hiring locally.
The set-up and HR costs can also be quite high, so going through an EOR can save you money. You will also be paying lower salaries than you would be in the US and Canada, so you’re bound to see some positive impact on your bottom line.
Most importantly though, you’ll be mitigating the risks associated with non-compliance. Because EORs have extensive experience in navigating complex local HR policies, you won’t have to worry about any issues arising from improper hiring practices.
How Do I Choose the Right EOR for Me?
Before selecting a vendor, consider these four things:
- Local Experience: Does the EOR have experience hiring in Switzerland? As discussed earlier, one of the biggest advantages of hiring an EOR is the assurance of compliance. Often, this requires a lot of past experience, so check the EOR’s track record in the country.
- Service Scale: Do you need someone who offers a full suite of services? If you want happy employees that you can retain in the long run, then you may need to offer them benefits like insurance and other welfare. Some EORs have systems in place for this but others may not. Also, certain EORs will offer consulting services to optimize your global hiring practices.
- Data and Systems Security: Switzerland has to adhere to the European Union’s General Data Protection Regulation (GDPR), meaning it has vastly different data regulations than other countries, especially Canada and the United States. Working with an EOR guarantees compliance with the GDPR and emphasizes the importance of protecting intellectual property. It’s critical to keep systems secure in a remote work environment, so look for a vendor that outlines ways they plan to keep information sensitive and secure.
- Collaboration: Ensure your vendor’s approach to communication and collaboration with its clients is aligned with your organization’s approach. Love having a point of contact person? Perhaps all you need is access to a Slack channel so you can quickly reach your vendor. Whatever your communication style, ensure your vendor can meet your needs.
Borderless: The Employer of Record Your Company Needs
Need an EOR? Look no further than Borderless. We can help you establish a business entity in Switzerland, giving you access to a massive talent pool without all the headache of traditional global expansion.
Book a demo today and see how we can help you quickly and easily hire, onboard, pay, and retain the talent your organization needs.
Disclaimer
Borderless does not provide legal services or legal advice to anyone. This includes customers, contractors, employees, partners, and the general public. We are not lawyers or paralegals. Please read our full disclaimer here.
