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

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, Microsoft, 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 wag-

es, 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 Europe-

an 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.

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 abso-

lute 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

• 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 offers some of the most attractive labor conditions in the world - for employers and employees alike.

The Greater Zurich Area’s workforce is relatively inexpensive while showing a favorable cost/performance ratio.

Greater Zurich Area AG, November 2009: Human Resources 1

Talent and innovation in the Greater Zurich Area

Based on its great tradition and experience in industries

such as watch making, precision manufacturing and

banking, the Greater Zurich Area has today also become

a beacon of IT, bio-, nano- and medical technology, and

modern finance.

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 quality supply by these world-class universities was

a key factor in the decision of Google to move their Eu-

ropean 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 Nobel prizes

and many other technological breakthroughs among its

achievements. And only in 2006, Microsoft has launched

its Development Center in Zurich as the newest addition

of a global and innovation driven company to set up

R&D operations in the Greater Zurich Area.

Bilateral agreement with the EU: Free movement of

personnel

In June 2007 the last quota restricting free personnel

movement between Switzerland and the European

Union (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, international top international ex-

ecutives do not hesitate to relocate to the Greater Zurich

Area.

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 leav-

ing room for direct agreements. The beneficiaries are

the employer and the employee alike. Among the great

achievements of Swiss labor legislation are the follow-

ing:

• Switzerland has not experienced a significant

organized strike in many years.

• Unemployment is significantly lower than anywhere

else (3.3%, January 2009).

• 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.

«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

Cooperation and mutual inspiration between 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.

The bilateral agreement on the free movement of personnel between Switzerland and the EU has further added to the attractiveness of the Greater Zurich Area as a headquarters location for international companies.

Greater Zurich Area AG, November 2009: Human Resources 2

• Average annual working hours in Switzerland:

1’855 (most in Europe; USA: 1’918 hours)

• 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 re-

tirement. Occupational accident insurance is included in

this system.

Further insurance provisions

• Unemployment insurance

(«Arbeitslosenversicherung ALV»; 2% of salary).

• Salary reimbursement regulation

(«Erwerbersatzordnung EO»; 0.3% of salary),

during military service or maternity leave; split

equally between employer and employee.

• Family allowances are subject to cantonal

regulation.

• Mandatory occupational accident insurance

(«Unfallversicherung UVG») covers accidents on 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 any case, the payment

duration does not exceed 46 weeks.

Individual health insurance

Basic health insurance is mandatory for everybody liv-

ing 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 re-

cent years. Work permits are no longer necessary for EU

and EFTA citizens. Work permits for Non-EU/EFTA on a

managerial level are a mere formality and initiated by

the employer upon availability of a valid working con-

tract. A residence permit is mandatory for anyone who

works during their stay in Switzerland or whose stay ex-

ceeds three months.

Under Switzerland’s liberal labor law, employees and employers enjoy an equal degree of protection and flexibility.

Three pillars of Social Security

1st pillar: AHV (US equivalent: Social Security)A federal retirement fund for the elderly and be-reaved («AHV») and the disability insurance («Invali-denversicherung IV»); both are mandatory for the working population, employer and employee each contribute 50% to the pension. Current premiums: AHV: 8.4% and IV: 1.4%

2nd pillar: Company-sponsored pension (Berufliche Vorsorge: BVG)A pension plan, mandatory for all employees in Swit-zerland («Berufliches Vorsorge-Gesetz BVG»). Fund-ing for this plan is split equally between the employer and employee. 3rd pillar: Tax deductible private retirement plansNon-mandatory retirement plans (savings or life in-surance), partially or completely tax deductible de-pending on the nature of the plan and employment status.

Total

Employer

Compulsory Social Contributions*

Source: Corporate Consulting & Technology (CCT SA) Zurich, December 2008

on a US$ 100,000 annual gross income, in %

Employee

United States

Ireland

UK

Netherlands

Switzerland

Singapore

Belgium

Germany

France

7.50

10.75

12.80

12.05

12.75

13.00

32.34

19.55

41.80

7.50

6.50

6.00

10.35

10.55

20.00

13.07

39.10

20.90

15.00

17.25

18.80

22.40

23.30

33.00

45.41

58.65

62.70

* Depending on the insured’s age, variations apply.

Greater Zurich Area AG, November 2009: Human Resources 3

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.

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!

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.

• Topnotch 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.

Greater Zurich Area AG, November 2009: Human Resources 4

MAIN OFFICE

Greater Zurich Area AG Limmatquai 112 8001 Zürich / Switzerland

Phone +41 44 254 59 59 Fax +41 44 254 59 54

www.greaterzuricharea.ch info@greaterzuricharea.ch

USA Greater Zurich Area Inc. swissnex building 730 Montgomery Street San Francisco, CA 94111 / USA Phone +1 415 912 5909

Greater Zurich Area Inc. 575 Madison Avenue, 10th Floor New York, NY 10022 / USA Phone +1 212 937 8415

CHINA

Jianping Gao Greater Zurich Area Representative Office No. 1388 North Shaanxi Road 1612, Regus Silver Centre 200060 Shanghai Phone +86 21 6149 8208

INDIA

Arvind Tilak Ascent Strategic Management Group Pvt. Ltd. R 1, Pinac Memories, Near City Pride 2, Kothrud 411029 Pune Phone +91 20 6500 4608 ext. 000