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Accurity Blog

Since the EU free movement of persons initiative was introduced in 2002, the population of Switzerland has grown by 20%, to 9 million today. While this has admittedly put a strain on some services including transport and healthcare, the demand for skilled labour remains high. According to the Federal Statistical Office more than 11’000 jobs remained vacant at the end of 2023. To compound this situation, according to various industry associations, there will be a short fall of at least 430’000 workers by 2040. Some estimates put this number even higher.

The labour market in Switzerland is continually evolving, and it is inherently difficult to forecast labour demand. The simple fact is, the situation will not change anytime soon. Evolving demographics, as the baby boomers retire, no doubt signal more challenges ahead. Simply put, there are not enough young people to fill the job vacancies gap.

This is not only a Swiss problem and many countries, find themselves struggling to fill job vacancies as a result of demographic transition and an ageing population. Post Covid and many companies are now joining the global trend to recruit remote based employees to fill job vacancies. Technology and social acceptance both fuelling the trend.

Despite the challenging situation in Switzerland, the official view of the Swiss government is that no special state intervention is required to avoid shortages in key sectors of the economy such as health, energy or transport. In other sectors such as IT, Pharma and Biotech companies continue to recruit foreign workers due to lack of skilled local candidates.

Granted Switzerland has a high level of education and vocational training is constantly looking to adapt to the needs of companies.  This approach seems to have worked so far, but some argue, this is only because of the massive influx of skilled immigrant labour, predominantly from EU countries. Immigration can in fact, be attributed to having curbed demographic ageing and raised labour market potential in Switzerland.

Market Trends

Most experts agree that international competition for skilled labour will intensify in the coming years, especially in certain industry sectors with high demand. This is leading to some interesting observations and trends in Switzerland.

  • According to Dr. Rafael Lalive, a professor at the University of Lausanne and a labour market specialist, due to the lack of competitiveness in child care for families, Switzerland doesn’t compare well to its neighbours France, Germany and Italy which according to him have much better childcare systems.
  • Possibly as a result of the above, the number of remote workers based in Switzerland is growing and now stands at around 25% of the total workforce.
  • Since Covid, more companies are now engaging remote workers and this includes workers based in Switzerland working for foreign companies, as well as foreigners working remotely outside of Switzerland for Swiss companies.
  • With the growing interdependence of the world’s economies, cultures, and populations referred to as Globalisation, borders are becoming more fluid and most countries have launched worker engagement models that allow foreign workers to work in their country for certain time periods.
    • One such example is the so called “Digital nomad visa” which has now been launched by over 60 countries worldwide. These typically have varying conditions and lengths of stay, depending on country.
    • Although Switzerland does not use this type of visa, there are a variety of permit and visa options for skilled workers looking to reside and work in – or from their base in Switzerland.
  • With the growth in popularity and acceptance of the remote worker, companies of all sizes are casting their nets further afield to find the right talent.
  • In support of this recruitment strategy, specialist HR and employment services companies operate various engagement solutions to enable remote work.

Switzerland – Remote work Scenarios

There are two main scenarios that can lead to someone looking to work remotely in – or indeed from, Switzerland. These are:

  • A skilled worker recruited for a permanent or contractor role based in Switzerland

    • A worker recruited for a permanent role will be employed and pay-rolled by their new Swiss employer.
      • They will have a Swiss employment contract and pay into all the Swiss social funds, health and accident insurances and oblatory state and private pensions.
    • A contractor will typically be pay-rolled via a local employment services partner.
      • The above model is also referred to as Labour Leasing and the contractor will have a Swiss employment contract, as technically they are employed the the local employment services company, which in turn as a supply agreement with the company engaging the worker.
      • This means the contract worker pays into the same funds, insurances and pension types as the worker on a permanent recruitment contract.
  • A person moving to Switzerland to be with their legal partner
    • who either already lives in Switzerland, or who has been recruited for a position based in Switzerland and who has a permit.
    • The partner joining the recruited worker, wishes to continue working for their current (foreign) employer during the time they  based with their partner in Switzerland.

In both the above cases, having a registered residential address and a  valid permit is key. This must always be secured before any work commences.

Types of engagement models 

For the above contractors scenarios, there are different engagement options possible:

  • EOR or Employer of Record – this is for the contractor worker and valid either when the client company is based in Switzerland or in a foreign jurisdiction. The main point to note is that the EOR is a SECO licensed Swiss employment / HR services company with a registered office, and personnel in Switzerland.  The EOR signs a supply agreement with the client company and an employment agreement with the contractor (who has already agreed terms with the client company).
  • ANobAG – A German acronym which stands for ” employee without a contributory employer”. This in effect means that the worker is employed by the foreign based client company, and that they are solely responsible for setting up and ensuring payment of all the social fund, insurance and other obligatory payments including pensions (Pillar 1 and 2). There are of course local expert partners that can support the ANobAG worker in both the set up and monthly payment schedule.
  • For both the EOR and ANobAG models, it is important to note that due to the economic conditions in Switzerland including the cost of living, those enquiring about working remotely for a foreign company while living in Switzerland should note: minimum salary restrictions are in place. In certain scenarios permission can be refused if salary levels are deemed too low.

Summary

Since Covid, the number of people working remotely in Switzerland has increased. Combined with the fact that Switzerland has a shortage of skilled workers across several industry sectors, and it is easy to explain the 20% growth in population numbers since 2002. Some workers and their partners arriving in Switzerland are interested in working remotely. The two main models used in these cases are EOR and ANobAG. But buyer beware, there are several rules and regulations in place that must be observed. In these cases, we suggest contacting a local employment services expert for advice.

Accurity is a SECO licensed, provider of  payroll and HR management services in Switzerland for companies of all sizes from multi national corporations to SME’s and start-ups. We also advise on flexible and remote work and rates of pay. Please feel free to contact our team to find out more about the services we offer companies, contract staff and recruiters, and see how we can help you! We make Switzerland easy for you!