Cracking the Swiss Market: Essential HR and Legal Strategies for Long-Term Success

In 2023, loads of new companies popped up worldwide, for instance, around 600k in Germany and 52k in Switzerland alone. But here’s the kicker: about 75% of these won’t be around in five years. Why? It’s a mix of many reasons, such as cultural issues, employment challenges, lack of ambition, and inflexibility in changing their vision or strategy.  

If you aim to be one of the successful ones and want to go global, there’s a lot to think about. Planning is crucial, especially when it comes to finding talent, dealing with legal matters, and considering the political and economic stability of the countries where you want to set up shop. 

Let’s look at one market in particular – Switzerland. Breaking into the Swiss market, for instance, means getting a grip on the local business scene, especially from a Human Resources (HR) angle. Switzerland is well known for its economic stability and skilled workforce, making it a great place to grow any innovation business. However, setting up a legal entity means navigating specific regulations. Amongst others, I will focus on a handful of elements: 

Legal Entity and Workforce Structure 

Setting up a business in Switzerland requires right away a decision to be taken linked to the choices from a legal forms’ standpoint. You have forms like sole proprietorship, partnership, limited liability company (GmbH), or corporation (AG). Each option comes with different needs from an HR standpoint. For instance, the AG requires a formal structure with a board of directors, which impacts hiring executives and governance. Also, a need for registration in the Commercial register would come with it, providing details about founders, directors, and your business activities. 

Employment Contracts and Labor Law 

Swiss labor law, compared to some other European labor laws, allows a lot of freedom but also sets minimum standards. Employment contracts can be verbal or written, but written ones are better for clarity. These contracts need to include a job description, salary, working hours, and termination conditions. The Swiss Code of Obligations governs these relationships, ensuring protections like notice periods, paid holidays, and maternity leave. 

Work Permits and Immigration 

Switzerland’s labor market differentiates between EU/EFTA nationals and non-EU/EFTA nationals. EU/EFTA nationals have easier access, needing just a residence permit. For non-EU/EFTA hires, it’s tougher as you need to prove no local candidates are available and comply with quotas involving Swiss immigration authorities. 

Social Security and Insurance 

Employers must register employees with social security systems like the country pension insurance (AHV), disability insurance (IV), and occupational pension schemes (BVG) – all with contributions shared between employer and employee. Accident insurance is also mandatory. Understanding all of that is important to manage the payroll and ensure payroll compliance.  

HR Best Practices for Market Entry 

Effective HR strategies include thorough market research, understanding labor conditions, and offering competitive benefits. Partnering with local HR advisors can help navigate Swiss employment laws and cultural nuances. Implementing solid HR policies from the get-go can boost efficiency and morale. 

To sum it up, entering the Swiss market requires a detailed approach to setting up a legal entity and handling HR responsibilities. By getting the abovementioned basics right, companies can establish a strong presence in Switzerland and benefit from its skilled workforce for long-term success.