In June 2022, the Swiss unemployment rate dropped to a non-seasonally adjusted figure of 2%. This from 2.1 % in May. This represents the lowest value recorded since November 2001. And the total number of people currently unemployed in Switzerland stands at 92’511.
But compare this figure with the total number of job vacancies in Switzerland (which according to the Federal Office for Statistics rose by over 40% at the end of Q1/22 – to reach 211’500 across all sectors), and it is not difficult to see why the number of contractor roles in Switzerland is increasing.
Skills shortages in several key sectors such as banking, engineering, Pharma / biotech and IT mean that more and more companies are now looking to engage contractors as a way of filling vacant positions. Many of the workers come from international markets including the EU/EFTA – whose nationals are now able to work in Switzerland without visa issues (Agreement on the Free Movement of Persons signed in 1999).
So what are the compelling reasons for a company to engage a contractor for a specific role? Can foreign companies also engage contractors in Switzerland without having to open a branch office or base here? In this FAQ – we look at these questions and more.
Q: What are the main benefits for my company to work with contractors?
Accurity: COVID-19 compelled companies around the world to explore business models that prioritised flexibility. Two key benefits when working with contractors are: increased flexibility and efficiency.
- A project or global expansion strategy often means skilled workers are required quickly and for defined timelines.
- Companies can expand and contract the workforce as needed with a reduced long-term commitment.
- Skilled contractors bring specialised expertise to the job, and can be productive immediately.
- Companies can engage contractors for a project, with a view to offering them a permanent role later (try-before-hire).
Q: What about the costs and quality with contractors?
Accurity: Reducing costs and increasing quality are critical in strategic planning and a healthy workforce is essential to achieving this.
- In addition to permanent employees, business owners can also benefit from hiring skilled contractors to fulfil their short-term needs. These often bring fresh ideas.
- By engaging contractors on a defined contract timeline, this creates a de-risk HR position in times of uncertainty, such as during the recent pandemic.
- Contractors agree rates with the company they are engaging in work for. They are also responsible for paying their taxes and insurances. The company hiring the contractor can contribute to these costs, but it is not a written law.
Q. When should our company engage a contractor?
Accurity: There are no hard and fast rules for this, but engaging a skilled contractor can be extremely beneficial for the company when:
- New orders are received requiring immediate support, action or increased production for example.
- A project requires a specific skillset. This can often be IT-driven, but other project skills may also required.
- For foreign (non-Switzerland based) companies looking to expand their footprint internationally – it is possible to to engage a contractor based in Switzerland, even if the company does not have its own branch or legal entity here.
- For SME’s or start-ups with limited resources and intent on focusing on what they do best, a skilled contractor to handle a specific role, could also add to the dynamics and performance of the company.
Q. What are some examples to support the strategy to engage a contractor?
Accurity: There is plenty of evidence of the growth in popularity of companies engaging independent workers. For example:
- Statista estimates that half the U.S population will be engaged in some form of contract work by 2027.
- According to consultancy firm Deloitte, approximately 25 percent of people in Switzerland now work as a freelancer. Although not technically the same as a contractor – these do engage in project work for (their) company clients – which is essentially also what a contractor does.
- In Airswift’s 2022 GETI report, multiple sectors within the energy industry also attribute a globally mobile talent pool to the rising use of contractors.
Q: What things should our company consider when engaging a contractor?
Accurity: There are a number of points to consider here:
- The question should be asked, whether the job can be completed on a short-term basis or within a defined time period?
- Does the job require a specific and/or specialised skill set?
- Can the job be done with minimum supervision?
- Should we try and hire the contractor directly? Or is it better to work with a recruitment partner specialised in hiring skilled contractors?
Change at work has accelerated since the Covid Pandemic and a recent report by Gartner.com highlighted a number of key trends in HR management. The ones relevant to this post are:
- Hybrid work becoming the norm.
- Shortage of critical talent.
- Staff turnover increasing depending on company policies such as flexibility.
By engaging contractors as part of an agile HR strategy, companies will not only benefit from having skilled and experienced workers on board, capable of focusing on work tasks immediately, but also the company’s permanent staff will be exposed to fresh ideas and experiences that can only help them grow as a result. As Winston Churchill famously said: “To improve is to change, so to be perfect is to have changed often.”
Accurity GmbH is a professional employer organisation (PEO) based in Zurich. We are SECO licensed with a 20+ year enviable reputation as a trustworthy, reliable and transparent partner for companies of all sizes including SMEs, contractors and recruitment agents. Our core services include EOR and ANobAG for contractors and clients wishing to engage contractors. Contact our team for a non-binding consultation on firstname.lastname@example.org to see how we can help your company.