Executive recruiters in Switzerland are busy. With a flood of multinational corporations locating or expanding in this Alpine nation these days (in 2004 there were 526), employees – and expatriates – are in high demand.
For example, Google, which opened its new European research centre in Zurich last year, is actively seeking engineers. As an enticement, Google executives point to Zurich’s high qualify of life, a fact that is supported by the Mercer Human Resources 2004 Overall Quality of Life Survey that places Zurich and Geneva equally in first place among 215 cities worldwide. Switzerland’s capital city Berne ranked fifth.
Switzerland also ranks second among 111 countries in the Economist Intelligence Unit 2005 Qualify of Life Index based on nine quality of life factors: material well-being, health, political stability and security, family life, community life, climate and geography, job security, political freedom and gender equality.
Google’s research centre is near breath-taking mountains, a wide range of outdoor activities and sports, and is in excellent proximity to many European countries and sites, company executives say. Urs Holzle, Google’s VP of operations, remarks on Zurich’s advantageous high salaries, which he believes makes it easier to attract quality staff. Add to this the fact Zurich is a vibrant city filled with culture, fine restaurants and night life. In addition, most people in Switzerland speak three languages with English being common; approximately 19% of Switzerland’s 7.3 million inhabitants are non-Swiss.
Switzerland certainly conjures up positive images: pristine landscapes, fresh air and a stable economy. But Switzerland has also been long regarded a closed society that does not make it easy for outsiders to live and work there. That is now changing.
Bernard S Zen-Ruffinen, managing director of executive search firm Heidrich & Struggles, reveals that, whereas Swiss firms had typically employed 20% foreign nationals, today that figure hovers around 50% and rising. He attributes this dramatic shift to government and private organisations, especially those from North America, targeting Switzerland as a location.
“Seventy per cent of our clients are now from the US,” he says. “In addition, Switzerland caters to the top tier of executives in the world.”
Consequently, Switzerland competes head on with the UK, Europe’s number one location for North American firms.
Heart of the matter
“The tendency today is to see large organisations locate to the centre of Europe,” Mr Zen-Ruffinen says. For that reason, Switzerland is on Europe’s site selection radar screen.
Businesses across a range of industries find major benefits to calling Switzerland home. Indiana-headquartered Zimmer Holdings, a world-leading orthopedic company, concentrates its research and development (R&D) and production of orthopedic implants in Winterthur, outside of Zurich.
The site, which manufactures some 140,000 hip stems, doubles as the company’s European and Australasian headquarters. The company hires expats from around the world. Many comment that Switzerland’s quality of life is more important to them than their salaries.
Yet, Swiss salaries are highly competitive and Winterthur is no exception. However, it is also a cultural city offering desirable amenities such as its own university and vocational college, parks and world-class art galleries such as the Fotomuseum. In addition, the city offers young families an international school.
Nestlé Corporation, headquartered in Vevey, operates as the largest company in Switzerland, and employs 253,000 workers of which 97% are from outside of Switzerland. Employees can enjoy skiing in the surrounding Alps, weekends in villages such as trendy Gstaad, wine tasting at a typical caveau, or the world-renowned Montreux Jazz Festival held every July.
Lausanne is home to the International Institute for Management Development (IMD), one of the world’s leading business schools engaged in developing the leadership capabilities of international business executives at every stage of their careers.
“The majority of our programme participants come from medium to large corporations and all have an international orientation to their businesses,” comments Dr Peter Lorange, IMD president. “Many companies, which begin by sending their managers to IMD programmes go on to develop their relationship with the institute to a closer level and become part of the IMD Learning Network, which provides further learning advantages.”
Medtronic, which is situated near Lake Geneva between Geneva and Lausanne in Tolochenaz, finds various benefits to its location, including ease of hiring international staff. Human resource executive Laura McKeaveney points out that Medtronic draws talent from California, Ireland, Australia, the Netherlands and beyond.
“We have 650 employees at this location that represent 65 nationalities,” she says. “We concentrate on diversity. Switzerland is a prime location for medical device companies. Switzerland also enjoys a strong work ethic that differs from other European countries. We have the longest working hours in Europe – 40-hour work weeks and double shifts. In Switzerland, everything can be negotiated.”
This has been the experience of US-headquartered Proctor & Gamble (P&G), which came to Geneva in 1999 to open a regional office. Today the company is the sixth largest employer in Geneva with 1650 employees.
While the company had considered Ireland for its European location because of an attractive incentive package, P&G spokesman John Tracey explains that Switzerland was more open to international businesses and their needs across the board. “We found Switzerland’s central geographic location a plus for staff relocations,” he says. “The quality of life offered to families was also important.”
Testimony to this fact is 500 P&G staff members who arrived as expatriates and have now obtained localised status.
“We find that 90% of our expatriates do not want to go back,” Mr Tracey says. Today the company is in search of people it can hire within the region, but is also stressing diversity.
Geneva is also home to several international schools such as the International School of Geneva, probably the oldest international school in the world and the largest.
Thirty-five per cent of the students’ parents work for government bodies, says Dr N Tate, director general. “Twenty-five per cent are from multinational companies, and the rest from missions and embassies.”
While the Swiss are quick to admit their nation lacks diversity, this is changing. Google, for example, encourages female software engineers to apply for work since that company is striving to maintain a gender balanced workplace.
Companies are also engaging innovative hiring practices to obtain the best talent. Credit Suisse in Zurich, for example, now bases its hiring procedures on personality and behaviour rather than standard interview questions.
“Companies locating to Switzerland find that taxes are levied on three levels: federal, cantonal and communal,” states Mr Zen-Ruffinen. “The Swiss federal tax law is uniform throughout Switzerland, whereas each of the 26 cantons has a separate law for cantonal taxes. Community taxes are levied as a multiple of cantonal taxes. Individual tax rates are higher in Geneva than Zurich.”
Attorneys with Niederer Kraft & Frey in Zurich point out that tax incentives for new and expanding businesses are available both at the federal and cantonal level. “Almost all the 26 cantonal tax laws provide for either relief or exemption from taxes, although the degree of relief or exception varies from canton to canton and [depends] on the business being conducted,” says Markus E Kronauer, an attorney and certified tax expert with the firm. Expats are required to obtain a work permit to be employed in Switzerland. The standard period is one year. “Expats must be sponsored for an assignment,” explains Mr Zen-Ruffinen.
One double-edged problem multinational companies across Switzerland find is expats often do not want to return home when their work permits and assignments run out. “Many will get another job and stay here,” Mr Zen-Ruffinen says.
This, of course, is the greatest testimony of all as to Switzerland’s quality of life.