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.

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.

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 plansNon-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.

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

involve ment 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

SWITZERLANDGreater Zurich Area AGLimmatquai 1228001 Zürich / SwitzerlandPhone +41 44 254 59 59Fax +41 44 254 59 54info@greaterzuricharea.chwww.greaterzuricharea.ch

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

CHINAJianping 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