Greater Zurich Area AG, May 2013: Human Resources 1
Among the many assets of the Greater Zurich Area, the
greatest may wel...
Greater Zurich Area AG, May 2013: Human Resources 2
Talent and innovation in the Greater Zurich Area
Based on a great trad...
Greater Zurich Area AG, May 2013: Human Resources 3
Switzerland’s liberal labor laws
As a non-member of the European Union...
Greater Zurich Area AG, May 2013: Human Resources 4
Permit types (work and residency)
• 	 Temporary non-residential workin...
Switzerland
Greater Zurich Area AG
Limmatquai 122
8001 Zürich / Switzerland
Phone	 +41 44 254 59 59
Fax	 +41 44 254 59 54
...
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Diverse, Liberal and Plentiful: Talent Pool, Labor Law, and Human Resources in the Greater Zurich Area

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Among the many assets of the Greater Zurich Area, the
greatest may well be its high-quality talent pool – and
how easily it can be tapped into. Local universities such
as the ETH Zurich (among the top 25 universities in the
world) and the University of Zurich churn out greatly
qualified graduates at a high pace.
http://www.greaterzuricharea.ch/

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Diverse, Liberal and Plentiful: Talent Pool, Labor Law, and Human Resources in the Greater Zurich Area

  1. 1. Greater Zurich Area AG, May 2013: Human Resources 1 Among the many assets of the Greater Zurich Area, the greatest may well be its high-quality talent pool – and how easily it can be tapped into. Local universities such as the ETH Zurich (among the top 25 universities in the world) and the University of Zurich churn out greatly qualified graduates at a high pace. A unique concentration of international companies sets the bar high for the Greater Zurich Area’s multilingual work force. Global industry leaders such as IBM, Google, ABB, Dow Chemical, Ecolab, Johnson & Johnson and Kraft Foods have cutting-edge research facilities or headquar- ters in the Greater Zurich Area. Here, they employ a veritable international work force elite made in Switzer- land: Top-notch employment opportunities, prime wages, low taxes and an extremely high quality of life make the Greater Zurich Area attractive for emerging talent and top managers alike. The most flexible and liberal labor laws of any European economy, as well as highly efficient trade and labor agreements with the European Union make the Greater Zurich Area euro-compatible and euro-competitive at once. Diverse, Liberal and Plentiful: Talent Pool, Labor Law, and Human Resources in the Greater Zurich Area Workforce with best cost/performance ratio in Europe Thanks to its strong currency, the Swiss Franc, highly-­ skilled Swiss labor doesn’t come on the cheap in absolute numbers. However, in the big picture, Switzerland offers the best cost/performance ratio in Europe. Decisive factors for the Greater Zurich Area’s great labor balance sheet are: • Employees pay all health insurance (incl. dentistry) out of their own pocket. • Low auxiliary wages, low social contributions. • Long working hours. • High productivity. • High workers’ motivation, great work ethics. • Highly flexible work force (“hire and fire” is common). At the same time, wages are very appealing to recruit and maintain the best talent among members of top-­ level management in the Greater Zurich Area. The Greater Zurich Area’s workforce is relatively inexpensive while showing a favorable cost/performance ratio. The Greater Zurich Area offers some of the most attractive labor conditions in the world – for employers and employees alike.
  2. 2. Greater Zurich Area AG, May 2013: Human Resources 2 Talent and innovation in the Greater Zurich Area Based on a great tradition and experience in industries such as watch making, precision manufacturing and banking, the Greater Zurich Area has become a beacon of precision technologies (life sciences, micro/nanotech, cleantech, ICT), modern finance and international ma- nagement know-how. The Swiss Federal Institute of Technology (ETH Zurich) and the University of Zurich are educating highly skilled engineers, and these innovative technicians continue to live up to the world-famous “Swiss Made” label. The high-quality talent supply by these world-class uni- versities was a key factor in the decision of Google to move their European Engineering Center to Zurich in 2004. The IBM Zurich Research Lab had come to a similar conclusion nearly 50 years ago. Today, it counts two No- bel Prizes and many other technological breakthroughs among its achievements. Only in 2010, Disney has launched a research center in cooperation with the ETH Zurich adding to the roster of global innovators to set up R&D operations in the Greater Zurich Area. And for several years now, the Greater Zurich Area has become an increasingly attractive destination for companies ex- panding from China into Europe. Solar companies such as Suntech, Jinko, and Yingli are part of an actual cluster buildup. Last but not least, the Greater Zurich Area has yielded a thriving and dynamic start-up scene in new technol­ ogies, inspiring Fortune magazine to name the city of Zurich as top of the 7 Best New Global Cities for start- ups in its October 2012 issue: “When Google looked to set up its European engineer­ ing headquarters, it turned to Zurich, and Yahoo fol­ lowed suit. The U.S. tech giants liked Zurich’s robust broadband infrastructure, but the real appeal is the local talent: Switzerland is the No. 1 country in the world in patents as a percentage of GDP. The Swiss government has multiple programs for investing in small businesses, and the effort seems to be paying off. Zurich is home to hundreds of startups, including calendar software maker Doodle and Wuala, a cloud storage company.” Cooperation and mutual inspiration be- tween academic and corporate innovators in the Greater Zurich Area, as well as the highest per capita expenditure on research & development make for a know-how environment that is particularly conducive to technological development and scientific invention. Bilateral agreement with the EU: Free movement of personnel In June 2007 the last quota restricting free personnel movement between Switzerland and the European Uni- on (of which Switzerland is still not a member) have been removed. Since then, international companies operating in the Greater Zurich Area can hire the best and brightest from all over Europe, in addition to the native talent of the Greater Zurich Area. And due to the superior quality of life they enjoy here, top international exec­ utives do not hesitate to relocate to the Greater Zurich Area. “At first glance, Swiss salaries appear high, but the productivity and flexibility of the workforce balance the numbers, and for many companies, available tax relief provides a very competitive situation.” David B. Bancroft, Managing Director Cilag AG The bilateral agreement on the free movement of personnel between Switzer- land and the EU has further added to the attractiveness of the Greater Zurich Area as a headquarters location for international companies.
  3. 3. Greater Zurich Area AG, May 2013: Human Resources 3 Switzerland’s liberal labor laws As a non-member of the European Union, Switzerland and the Swiss enjoy particularly liberal labor laws. In general, the legislator refrains from strict regulations in favor of a pro-business order, thus deliberately lea- ving room for direct agreements. The beneficiaries are the employer and the employee alike. Among the great achievements of Swiss labor legislation are the following: • Switzerland has not experienced a significant organized strike in many years. • Unemployment is significantly lower than anywhere else (on average 2.9% for 2012 [source: SECO]). • Union membership is low; unions and employers cooperate and are open to compromise. • Minimum legal periods for notices of termination are shorter than in other European countries (between one and three months, depending on duration of employment). • Wages can be regulated by collective agreements or negotiated directly between employer and employee. • Liberal international labor force: nearly 20% of Swiss workforce is non-Swiss, second highest in Europe. • For middle management or higher, overtime work is included in base salary. • Minimum annual paid vacation days are 20 (25 days for employees below 20 years of age). Low social security contributions in Switzerland In the Greater Zurich Area individuals enjoy low-priced and comprehensive package of social security and other insurance services. Social security is based on three pillars and combines federal, company-sponsored and individual plans for retirement. Occupational accident insurance is included in this system. Further insurance provisions • Unemployment insurance (“Arbeitslosenversicherung ALV”; ~2% of salary). • Mandatory occupational accident insurance (“Unfallversicherung UVG”) covers accidents on and related to the job; contribution is split equally between employer and employee. • Salary payments during illness or recovery of an accident; continuation of entire or partial salary payment by employer; payment duration and percentage is progressive depending on employee’s age and years of service. In most cases, the law requires 2 to 3 months. • Family allowances (subject to cantonal regulation). • Salary reimbursement regulation (“Erwerbersatzordnung EO”; 0.3% of salary), during military service or maternity leave; split equally between employer and employee. Three pillars of Social Security 1st pillar: AHV (US equivalent: Social Security) A federal retirement fund for the elderly and bereaved (“AHV”) and the disability insurance (“Invalidenversi- cherung IV”); both are mandatory for the working pop- ulation, employer and employee each contribute 50% to the pension. Current premiums: AHV: 8.4% and IV: 1.4%. 2nd pillar: Company-sponsored pension (Berufliche Vor- sorge: BVG, US equivalent: 401K) A cumulative pension savings plan, mandatory for all employees in Switzerland (“Berufliche-Vorsorge- Gesetz BVG”). Funding for this plan is split equally between the employer and employee. 3rd pillar: Tax deductible private retirement plans Non-mandatory retirement plans (savings or life insur- ance), partially or completely tax-deductible depending on the nature of the plan and employment status. Under Switzerland’s liberal labor law, employees and employers enjoy an equal degree of protection and flexibility.
  4. 4. Greater Zurich Area AG, May 2013: Human Resources 4 Permit types (work and residency) • Temporary non-residential working declaration up to 90 days (permit voucher). • Short-term work/residence (less than 1 year). • Residence (up to 10 years). • Permanent residence (no limit). Application procedure • Residence applications are usually filed by individuals at the cantonal immigration office before intended start of employment. • Work permit applications are filed by the employer at the cantonal immigration office before intended start of employment. • Many cantons offer online applications. • For jobs limited to 90 days (envoys, self-employed, and contract workers) a permit voucher is available at the cantonal authority. Example: Social Contributions on a gross managerial salary of CHF 240K Individual health insurance Basic health insurance is mandatory for everybody living in Switzerland; health insurance plans are bought by the employee from private insurance companies; no involve­ment of the employer. Work and residence permits Much of the red tape surrounding work and residence permits in the Greater Zurich Area has been cut in recent years. Work permits are no longer necessary for EU and EFTA citizens. Work permits for Non-EU/EFTA on a ma- nagerial level are mostly a formality and initiated by the employer upon availability of a valid working contract. A residence permit is mandatory for anyone who works during their stay in Switzerland or whose stay exceeds three months. Benefits of the Swiss labor pool at a glance • One of the most liberal labor laws in Europe, short period for notice of termination. • Due to Swiss employers’ low social security payments, long working hours and high productivity, hourly labor costs are lower than in other European countries. • The typical workweek is 40 to 42 hours. • Top-notch management skills, Swiss are international and multilingual (20% of population are non-Swiss nationals). • English is business language. • Talent pool of high-quality graduates from internationally renowned universities. • Easy to recruit and retain talent from abroad to work in the Greater Zurich Area. • High quality of life in Greater Zurich Area. • Bilateral agreements and free movement of labor between Switzerland and the EU give EU nationals free access to the Swiss labor market. • US citizens (management level) enjoy standardized, brief and simple procedures to obtain work and residence permits. Deductions Salary basis Rate For employer For employee Social Security (AHV) 240,000 5.15% 12,120 12,120 Unemployment Insurance 1 126,000 1.1% 1,386 1,386 Unemployment Insurance 2 114,000 1.1% 570 570 Accident Insurance 1 126,000 (employee) 1.2% – 1,512 Accident Insurance 2 126,000 (employer) 0.3% 378 – Accident Insurance 3 Over 200K (employer) 1% 740 – Sickness Insurance 240,000 1.1% 2,640 – Pension Fund (401K) 240,000 7.5% 18,000 18,000 Family allowance (Ct. of Zurich) 240,000 1.3% 3,120 – Admin. Fee 240,000 0.3% 727.20 – Total Contributions 39,681.20 33,588 Net Salary 206,412
  5. 5. Switzerland Greater Zurich Area AG Limmatquai 122 8001 Zürich / Switzerland Phone +41 44 254 59 59 Fax +41 44 254 59 54 info@greaterzuricharea.ch www.greaterzuricharea.ch USA Greater Zurich Area Inc. swissnex building 730 Montgomery Street San Francisco, CA 94111 / USA Phone +1 415 912 5909 CHINA Jianping Gao Representative China Phone +86 21 6149 8208 Have we sparked your interest? Would you like to get to know your options in the Greater Zurich Area in more detail? If yes, please contact your nearest Greater Zurich Area representative for more information. We are happy to assist you in every aspect of expanding your business to the Greater Zurich Area! Greater Zurich Area AG, May 2013: Human Resources 5

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