Defined as ranging in size from 1-249 employees, SMEs make up an astonishing 99% of the total companies operating in Switzerland. These create two-thirds of all open positions on the Swiss job market, with the total number of workers employed by SMEs in Switzerland now reaching nearly 600’000. Those companies employing 20-49 employees (18’275 or 11.96% of the total) and 50-99 employees (5’947 or 8.98% of the total) represent the two most significant groupings.
The total number of SMEs can be divided into three main sub-sectors:
|Sector||Description||Number of Companies|
|Primary||Agriculture, forestry, fishing||51’592|
|Secondary||Extractive and manufacturing industries, production and distribution of electricity, gas and water, and construction||90’042|
|Tertiary||Services such as retail trade, wholesale trade, restaurants and telecommunications||458’052|
The average number of employees per SME, per sector is:
- Primary 3.0
- Secondary 8.4
- Tertiary 4.7
The above, combined with emerging trends such as remote working and labour leasing (engaging skilled contractors or freelancers for temporary special projects and assignments), make it easy to understand why more and more companies, including SMEs are now choosing to out-source non-core services including payroll to so-called PEO companies. So, what is a PEO exactly and what services can they provide?
A PEO typically offers an array of HR-related services. These may include: employer of record services, (labour leasing), payroll, employee benefits + compensation, risk and compliance, tax, and other HR and payroll consulting services.
The main advantages for the SME of working with a PEO are:
- Reduced administrative work
- 100% focus on customers and not on internal administration
- Lower employee turnover due to repetitive work
- Higher revenue growth because more focus on core services
- Safeguard employees with professional support in HR-related issues
An experienced, trustworthy and licensed PEO can guide SMEs through the typical HR issues and challenges and thereby abide to Swiss laws and regulations, which can also help SME’s reduce employee risk and employee churn.
A further advantage of working with a trustworthy PEO, is that these are able to mitigate health insurance and pension benefits vs costs and SMEs should find that they will be able to offer their employees better benefits without the cost and burden associated of having to manage their own in-house HR resource.
Considerations for an SME to outsource HR and work with a PEO
- SMEs typically specialise in one type of service or product. Costs for an SME to employ a HR worker are relatively high and associated employee risks such as absenteeism, and sickness, mean that SME owners need to be able to optimise their resources, including staffing to operate profitability.
- Employing one or more staff to manage HR, payroll and the myriad of related and dynamic staffing issues, represents a risk position for the SME – and engaging a PEO to manage all HR services including payroll could make more sense. Some of the measurable advantages for the SME of working with a PEO.
- Cost savings by replacing a staff resource with an outsourced HR partner
- Revenue optimisation with 100% focus on the core business
- Flexibility in adding contractor staff for new orders, projects, assignments
- Knowledge of the PEO is specialised and far reaching and always up to date with new HR trends
- Time savings by working with an outsourced HR partner – the PEO is specialised and signs a service agreement with the SME so there should be no hidden surprises
SMEs today are likely to employ multiple generations within their small teams. These have vastly differing HR and social interests and requirements. New employee trends such as remote working coupled with rising employee costs and staff coverage risks, all point to the outsourcing of non-core activities such as HR services making increasingly more sense for the SME.
Accurity GmbH is a professional employer organisation based in ZRH. We are SECO licensed with a 20+ year enviable reputation as a trustworthy, reliable and transparent partner for companies of all sizes including SMEs. Contact our team on email@example.com to see how we can help your company.