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Is your business going well and your company growing? Then perhaps it's time to hire your first employee. Find out here what you should bear in mind and what practical steps you need to take.
Hiring your first employee is an exciting milestone for your company. The fact that you're thinking about taking on staff means that your company is doing well. You have now become well established and the number of orders or sales is growing - you can no longer do everything on your own and you're looking for support. Or perhaps you'd like to tap into new areas and are now looking for the right technical expertise.
To help you successfully deal with your first appointment and have your new employee stay with you for as long as possible, we've spoken to HR experts and collated the key information for you.
Finding the right time to hire staff is not that easy. First you need the necessary financial resources, but you also need a certain time buffer (in case you don't find anyone straight away, i.e. lack of qualified staff) (currently not available in english). You should also factor in enough time to train the person in question.
It can help talking to other business owners who have already had the courage to take this step. They can share their experiences with you and help make it easier for you to take the decision.
Do you recognize yourself in some of the following statements? Then it's possibly time to get some help on board:
If the "when" is clarified, then the next step is "how"? Our step-by-step guide can help you with this.
And of course our start-up offer – so that you can concentrate fully on your company's next step.
If you're hiring employees for the first time, you're going outside your comfort zone and slipping into a new role - that of HR manager but above all that of boss. From the recruitment process to the work reference, you're responsible for completely new tasks.
1. Defining the job profile
2. Starting the recruitment process
3. Processing the application procedure
In the recruitment process, it's particularly important that the new employee fits into any existing team and aligns with the values and conduct for the corporate culture (cultural fit). The new colleague should enhance the team both from a personal and technical perspective. "Lack of technical knowledge can be remedied on the job through upskilling", says Ute Schläfli, Product Owner Recruitment at AXA.
An employment contract can be concluded in writing or verbally (and theoretically also implicitly), but it's generally in writing. In certain cases this is also compulsory, e.g. for apprenticeship contracts.
What should be included in an employment contract?
Permanent contract: state on what grounds and after what period the contract can be terminated. You can also reduce the statutory probationary period of one month, eliminate it altogether or extend it to three months.
Temporary contract: there is no statutory requirement for a probationary period, but this can be agreed if required. Enter the end date of the employment relationship (unless this is determined by the conclusion of a project stated in the contract).
Benefits that are not obligatory, such as daily benefits insurance or additional contributions to Pillar 2, as well as the choice of an attractive pension fund solution are all fringe benefits. These are becoming more and more crucial when skilled workers in particular choose an employer.
Please note: if your business is subject to a collective employment contract (CEA), you must comply with the latter's regulations and reflect these in the employment contract. You can obtain information from the trade unions, your employer organization, cantonal employment office or the State Secretariat for Economic Affairs (SECO).
You can find tips on "Drawing up an employment contract" and a template for an individual employment contract at myright.ch. But the formulation of an employment contract is obviously a very individual matter. "When issuing your first employment contract, you should also consult your legal advisor to make sure that everything is legally ironclad", explains Irene Roth, Head of Employee Administration. "This way, you won't just be on the safe side, but you'll also have a sample individual contract for any other employees."
It sounds trivial, but a functioning workstation and suitable work are initially required so that work can be carried out. Before your new employee starts their first day of work, define what is on the agenda on day X and during the induction period. As well as physically setting up the workstation, you should also not forget any user accounts and approvals. If you're well prepared, your new employee can show their potential from day 1.
Employers are obliged to register their employees with the cantonal compensation office and where applicable, apply for family allowances. "The requirement to contribute to social insurance schemes (OASI, DI, LEC and UI) begins from January 1 after a person turns 17", says Barbara Jacobi, Head of Payroll at AXA. "New employees who do not yet have a social security number must be registered immediately by the employer with the cantonal compensation office. If new employees have a social security number, they can be registered straightaway or at the latest with the salary declaration at year-end." Your point of contact is the cantonal compensation office. If you already have a number and imagine that you'll be waiting a long time to be served, don't worry as everything can now be done easily online.
If your company is already registered with the compensation office, new employees do not need to be registered separately - simply declare them at year-end on the official salary declaration (to do so, you need the personal details, OASI number and date of birth of the person in question).
If the new employee doesn't have an OASI number yet, for example because they have come directly from another country, a new number will have to be applied for with the responsible compensation office.
If your new employee has children, there is an entitlement to family allowances depending on the family structure. It's your job to apply for these from the family compensation office. The best approach is to contact your OASI compensation office, as the family compensation office is usually located there.
For this process, you'll need the following documents and information from your employee:
If you wish to hire foreign employees who don't have a type C residence permit, there are another couple of points you should bear in mind.
1. Submitting registration or application for permit
2. Registering for withholding tax
Employees subject to withholding tax (foreign employees without a permanent residence permit) must register with the responsible tax authority within eight days of joining.
You must register employees with a pension fund if their salary is at least CHF 22,050 p.a. (as at 2023) and the employment period will be for more than three months or on a permanent basis. Note: insurance is compulsory from day 1, even if the person is initially in their probationary period.
You'll need the following details for registration purposes:
Suitable candidates who have several potential employers to choose from increasingly look at factors other than salary, such as the pension fund solution. How well is the pension fund set up? Will retirement assets also be invested and if so, where and how? Does the employer contribute towards supplementary savings contributions for extra-mandatory benefits? The answers to such questions can ultimately make a small but subtle difference.
Furthermore, you have to protect your employees against the consequences of accident and occupational diseases, which means that you have to take out accident insurance. As soon as you hire the first person subject to insurance coverage, this must be registered with the accident insurer of your choice. Having said that, "of your choice" is not entirely correct, as employees in certain sectors are obliged to be insured with the Swiss National Accident Insurance Fund (Suva). Find out beforehand whether this applies to your company. (currently not available in english)
Daily sickness benefits insurance is not mandatory, but it makes sense. This covers the cost of continuing salary payments for employees who are absent due to sickness or are on maternity leave.
Another advantage is that your employees benefit beyond the statutory minimum under DSB insurance for continued salary payments. This in turn makes you more attractive as an employer.
"For administrative purposes, it's definitely advantageous to take out accident and daily sickness benefits insurance from the same place." - Barbara Jacobi
For small businesses in particular, it is often too complicated for them to set up and run their own pension fund. AXA can help, in that it offers various semi-autonomous pension solutions that are specifically tailored to the needs of start-ups and SMEs.
Discover our pension solutions
Accident insurance protects you and your employees against the financial consequences of an accident. If there's a problem, it covers continued salary payments, the cost of care and pensions.
If employees are absent through sickness or because they are on maternity leave, daily sickness benefits insurance takes over the cost of continued salary payments from you. And your employees also benefit, in that they have more time to recover in peace.
To determine whether employees are financially viable for you, you should take a realistic view of the applicable costs. There are also a few indirect costs on top of the more obvious direct ones.
The main direct costs that apply are salary costs. These depend heavily on your sector, but also on the type of position and job profile. Salary can also be a good means of locking in particularly qualified candidates.
"An employee's salary should normally be fair, in line with the market and match job requirements", says Ute Schläfli. If you're not sure what that means, it's best to listen to other employers or get advice from industry associations.
Added to salary costs are the costs of social security insurance: OASI, DI, unemployment insurance, family allowances, accident insurance, pension fund and, if applicable, daily sickness benefits insurance. Depending on the structure, these can amount to 11 - 13 percent of the gross salary total.
As a side note, there are government calculation templates that can help you roughly work out the direct costs. (currently not available in english)
The following costs can easily be forgotten - you must calculate them whenever you hire staff:
Consider in advance what you would like to achieve: should the new employee help increase turnover, i.e. contribute towards the growth of your business? Or is the idea that you will be relieved of work and have more time available (for business or private purposes) - but possibly with the same level of turnover?
With this in mind, you will be better able to calculate what budget is available for hiring a supporting person and whether this is realistic.
Now you have an excellent overview of everything you have to consider if you wish to hire your first employee. But among all the hard criteria, facts and figures, there is one thing that you shouldn't forget - your gut feeling. If you don't feel right about someone, there is usually justification for this. Listen to your intuition and look elsewhere, as this wasn't quite the right person.
And don't despair if everything looks unclear and challenging at the outset. You too will learn and collect experience - in time, you'll become better at dealing with HR matters and better in your role as the boss.
Go for it! Our checklist will guide you through.
Jennifer Bächtold is a Content & Advertising Manager at AXA. She researches and writes about all kinds of health and pension topics.
