When companies are looking to fill an internal vacancy, they have several options open to them. In this blog post, we will take a closer look at permanent versus contract hiring in Switzerland.
What do we mean by permanent employee and contract employee?
To distinguish between the two, we must first understand how they differ from one another.
Permanent employee:you are hired directly by the company and are on their payroll. Your employer manages your payroll, benefits and assumes liability for hiring you.
Contingent/contract employee:Contingent workers are contractual employees (also called 'contractors' in the recruitment industry) that are generally employed to accomplish a specialized task.
What kind of employment can you expect as a temporary worker?
There are a few contractor types that are common:
Freelancers: Freelancers work via/through their own LLC, they are self-employed. Most of the time, they work on specific projects and they fulfill very specific tasks/deliverables and invoice accordingly. Generally, they are paid a higher rate than external consultants as they assume all the risk of employment.
External consultants: Consultants deliver their work on behalf of another company to the end-client. Sounds more complicated that it is; essentially, the person is hired by a recruitment agency that holds a labor leasing license, they provide that person’s services to an end-client in return for a set hourly/daily/monthly rate. In Switzerland, hiring external consultants is very common with larger corporations as this allows them flexibility and they can quickly scale up (and down) to meet their business needs.
Depending upon the company and their structure, hiring contingent/contract labor is handled completely separately from permanent hiring.
How does permanent employment work in Switzerland?
In permanent recruitment processes, companies generally rely on their internal HR team to fill vacancies. Depending on many factors, these companies may rely on their internal recruitment team, hiring managers or HR leaders to advertise, shortlist candidates and conduct interviews. Permanent hiring is a far slower process usually - you may have several interviews with different people at various hierarchies in the organization – they like to see whether you will fit into their company culture.
In general the slower process can be explained by the long notice period in Switzerland - usually 3 months as a software engineer. This is the time the employer will give you to find another job if they terminate your contract and vice versa, you will have to work for them another 3 months minimum if you decide to resign.
How do large companies recruit?
As an applicant, your first interaction with a company may be with their internal recruitment team – depending on how your interview process goes, they will arrange for you to meet or speak with other internal stakeholders including HR or line management.
Larger companies often hire entire teams to implement or run specific projects; sometimes these companies have strategic hiring gaps and need contractors to bridge over periods where certain people are missing. For instance, a permanent employee goes on maternity leave and as we say, the show must go on, so they look for a stop-gap measure: hiring a contractor solves their business need perfectly.
Paying for a contractor is done via procurement and is handled very differently to hiring permanent staff. Recruitment agencies can hold a supply agreement with the company and be considered “Preferred Suppliers” and be on their PSL (Preferred Supplier List). Companies can have very structured processes and first release the role to their Tier 1 (preferred suppliers) list first, then to their Tier 2 suppliers after a given time (other suppliers they use if Tier 1 can't find the ideal candidates).
Understanding the relationship between the agency that contacted you for the contract position and their client is important; they may be one of literally dozens of suppliers that compete for the same role.
Finding your dream job
Your goal as a candidate should be to partner with an agency that holds close relationships to both line management and procurement; the closer the better, as this will speed up the interview and feedback process. TalentCloud Group is your perfect recruiting partner - thanks to the relationships we enjoy with hiring managers and procurement, we increase your chances of landing your dream job - don't hesitate to reach out to our team of recruitment experts to get help! We have jobs in Zurich, Geneva, Bern, Basel, Zug, Lausanne and all over Switzerland.