Relevance of the topic to SZKB and objectives

As an employer, SZKB has the ability to shape the professional development of its employees in their work roles. This can have both negative and positive effects. Opportunities and risks relating to business conduct vis-à-vis employees can be divided into an inside-out perspective and an outside-in perspective:

• Inside-out – the impact of SZKB on employees and society: As an employer, SZKB has a direct impact on the well-being and development of its employees and society. Positive effects such as a diverse corporate culture promote satisfaction, employee retention by the company and the positive perception of SZKB as a responsible employer (employer branding). At the same time, it is important to avoid negative effects such as health impairments, discrimination in the workplace or loss of employability. SZKB focuses on targeted measures to promote sustainable growth and innovation, including topics such as diversity and integration, business transactions/commuter traffic and remuneration of the highest governance bodies.
• Outside-in – the impact of external factors on SZKB: External developments such as societal expectations and environmental changes have an impact on SZKB. Commercial transactions/commuter traffic, as a key cause of operational CO₂ emissions, requires measures to reduce the environmental footprint. Likewise, the remuneration policy is subject to increasing requirements in order to avoid misincentives and reputational risks while at the same time helping to attract qualified managers.

With this approach, SZKB identifies areas in which action is required, minimises risks and strengthens its role as a responsible employer and sustainable institution.

SZKB has defined "Diversity and integration", "remuneration of the highest governance bodies" and "commercial traffic/commuter traffic" as key topics in the area of responsible business conduct towards employees and set the following targets (for climate targets, see Chapter 5 Climate Report):

• SZKB fulfils its role as a training company by providing a number of apprenticeship and internship positions equivalent to a minimum of 5% of the workforce.
• SZKB acts as a socially responsible employer by providing job opportunities for individuals with disabilities, such as through reintegration programs or through the continued employment of employees with limited capacity, with at least 1% of its employees taking advantage of such opportunities.
• The number of sickness-related absence days per employee (FTE) is less than 5.0 days per year (with long-term absences not taken into account).¹
• The (unexplained) pay gap between the genders is no more than 2.5%.
• By 2030, there will be a minimum of 25% representation of both genders among employees at all levels, including the Executive Board.

¹ _{Long-term absences are not taken into account}

Management approach

Organisation
The strategic responsibility for human resources policy lies with the Bank Council, its Personnel Committee (PEA) and the Executive Board. These bodies perform central tasks in managing and monitoring the Bank’s HR strategy and policy. The Human Resources department (HR) is responsible for the operational design and implementation of the human resources strategy. It reports directly to the CEO and is responsible for the development and implementation of the HR strategy. This comprises the areas of digital transformation, strategic HR projects, talent and leadership development, process optimisation, the drafting and updating of directives and HR communication.

The Bank Council, in particular the Personnel Committee, is responsible for key decisions in the area of human resources policy. This includes the appointment and dismissal of members of the Executive Board and the Board of Inspectors, approval of the Remuneration and Personnel Regulations and the organisation and development of the compensation model for the Executive Board or the Bank Council. These decisions are subject to supervision by the Cantonal Supervisory Commission and also include a determination of the fixed and variable elements of overall remuneration.

The Human Resources department is operationally responsible for the development and promotion of diversity, equality and integration within the organisation. It monitors compliance with relevant standards and implements measures that strengthen and further develop an inclusive corporate culture.

Preventing discrimination
Sexual harassment, bullying and discrimination of any kind are not tolerated at SZKB. Appropriate provisions have been incorporated into the "Personal Regulations" for this purpose. The appropriate channels for lodging complaints are managers, the Human Resources department or the members of the Executive Board. In addition, the whistleblowing process can be used. Irrespective of this, employees can contact the board of the Bank’s internal staff association for support and advice.

Remuneration model
The structure of the SZKB remuneration model is based on clearly defined levels (1–8 for employees, 9–10 for the Executive Board) and includes the following rules:

• Fixed remuneration: Employees on levels 1 and 2 receive a fixed basic remuneration.
• Variable remuneration: On level 3 and above, variable remuneration is possible in addition to fixed remuneration, although there is no legal entitlement to it (even if it has previously been paid).
• Variability criteria: The amount of variable remuneration depends on the level, individual performance (results and behaviour) and the total amount available. This is determined on the basis of the Bank’s adjusted business performance and is approved by the Bank Council.

The model reflects fair and performance-based remuneration and is adapted to and based on SZKB’s business performance.

Occupational safety and health
SZKB fosters a health-oriented corporate culture and minimises the risk of occupational illnesses. Its occupational health management is based on the pillars of prevention, intervention and integration. In the event of prolonged health-related absences, SZKB supports employees and managers with professional advice in order to ensure a smooth reintegration or a transition to disability insurance (IV). In addition, external, independent care management provides support in the event of long-term illness or occupational overload.

Key measures

• Expanding attractive employment conditions
• Ensuring equal opportunities and equal pay
• Organising «People Days»
• Establishing employee satisfaction
• Supporting training and education

Detailed employee figures can be found in the Appendix "Key figures about employees".

Expanding attractive employment conditions

Switzerland offers a solid social network and fair employment law standards, which are also fully applied at SZKB. SZKB also creates additional advantages in the area of diversity and integration in order to ensure an attractive working environment for all employees:

• Pension fund: The entire annual salary, including the variable component and excluding the coordination deduction, is insured with the Pension Fund of the Canton of Schwyz. SZKB also enables employees to create additional retirement capital separately from their management pension plan, if desired as a retirement pension. Through voluntary supplementary savings contributions, retirement provision can be extended and additional protection obtained to cover death and disability.
• Maternity: Employees receive 100% of their salary (fixed and variable remuneration) for a period of four months without any reduction in holiday entitlement.
• Family allowances: In addition to the statutory allowances, SZKB pays a voluntary family allowance until the child reaches the age of 20.
• Reconciling work commitments and family life: Employees with at least a 50% workload (mothers or single fathers) receive financial support for external childcare as well as free advisory and brokerage services. These regulations also apply to part-time employees, adjusted on a FTE basis.
• Compatibility of work commitments and private needs: SZKB offers its employees a highly flexible working schedule. Working hours can be freely performed within an extended time window from Mondays to Saturdays between 6.00 a.m. and 11.00 p.m. This rule enables an optimal balance between work commitments and private needs and fosters a modern, performance-focused and employee-friendly work culture.

¹ _{No key figures are shown for 2021 and 2020, as SZKB implemented a new HR system in 2022.}

² _{Returning to work refers to all employees who are taking or have taken parental leave during the reporting year.}

³ _{The figure shows the ratio of employees who took parental leave to those who continued working after the end of parental leave.}

⁴ _{Retention is measured one year after returning to work (after parental leave). It is not yet possible to report the figures up to and including 2022.}

Ensuring equal opportunities and equal pay

SZKB promotes diversity and integration with a special focus on reconciling work commitments and family life. Flexible working hours, the option of working from home and childcare allowances also support employees (regardless of the support model). With a rate of employment of 50% or above, employees who are mothers or single parents benefit from financial support for childcare. Part-time models are available to men and women alike. SZKB undertakes to prevent discrimination in all areas, from recruitment through promotion to remuneration, and to upholding the personal integrity of its employees.

The SZKB women’s network organised regular events, network meetings and training sessions for female employees. The aim is to facilitate dialogue concerning issues related to the professional and personal development of female employees and to enhance specific skill sets.

SZKB conducts an equal pay analysis every two years in cooperation with an external partner. This is based on total remuneration (fixed and variable components) and compares salaries by gender. SZKB has set itself the target of keeping the adjusted salary gap below 2.5%. The salary equality analysis was most recently carried out in 2023. The next analysis is planned for 2025.

Organising People Days

The "People Days" leadership programme has been in place since 2022. Once each year, the managers of each business unit jointly discuss and calibrate the performance and potential assessments of the employees. This process creates a uniform understanding of the assessments based on objectivity, fairness and broadly supported feedback. The performance and potential assessments resulting from the People Days form the basis for the remuneration development of all employees. For employees on levels 3 to 8, the performance evaluation also represents a component for the assessment of the individual variable remuneration.

The Human Resources department carries out evaluations to identify distortions in the assessment ("bias", such as in regard to employee gender, age or level). In addition, a detailed analysis will be submitted to the Executive Board after all People Days has been held in order to identify potential inequalities in evaluation between areas.

The systematic assessment of performance and behaviour, as well as the calibration of results during People Days, have proven to be effective tools in ensuring transparency and fairness in human resources development.

Establishing employee satisfaction

Every two years, SZKB conducts a comprehensive employee satisfaction survey in cooperation with an external partner. The aim of the survey is to gain valuable insights into the needs and opinions of employees in order to further develop working conditions and the corporate culture in a targeted manner. SZKB also uses pulse checks (surveys carried out during the year) of the workforce as needed in order to review the effectiveness of the initiated measures.

The regular survey enables SZKB to identify strengths and identify potential areas where improvement is required at an early stage. The results are fed directly into strategic human resources development and support the Bank in maintaining and developing its attractiveness as a responsible employer.

¹ _{No key figures are shown for 2021 and 2020, as SZKB implemented a new HR system in 2022.}

Supporting training and education

SZKB attaches great importance to comprehensive education and training for its employees in order to promote their employability and support lifelong learning.

SZKB offers a wide range of learning opportunities:

• Core training and fostering of young talent: SZKB is actively involved in the education and promotion of young talent in order to create a solid basis for future specialists. Its commitment includes practical training programmes that prepare young talent in a targeted manner for the professional challenges ahead. SZKB offers various occupational profiles for core training. If necessary, new occupational profiles are created and introduced.
• Talent and leadership programmes: With an 18-month talent programme, the Bank supports potential beneficiaries in order to strengthen their leadership and cross-departmental expertise. Five women and eight men are taking part in the group, which started in 2024. Since 2021, a leadership programme has assisted in the further development of executives, which continued in the form of «leadership circles» in 2023. This involves two mandatory training sessions each year.
• Training opportunities: SZKB offers employees access to their own learning platform, an external learning library and support for part-time training by covering 80% of the costs for advanced training and, as a general rule, also 80% of training hours from 2025.
• Advisory certifications: Client advisors are certified according to SAQ within 18 months in order to ensure the highest standards of advice. For employees who require an investment fund licence, this must be obtained within 6 to 12 months.
• ESG training: In 2024, SZKB conducted comprehensive training on ESG issues covering general content as well as internal Bank processes such as energy-efficient renovations and sustainable financing. These training courses were conducted according to an e-learning format and are SAQ certified. In addition, further training has been provided for client advisors with a focus on ESG in advisory services. In addition, in cooperation with the Lucerne University of Applied Sciences and Arts, SZKB has also developed a tailor-made specialist course in sustainable finance aimed specifically at managers and ESG-specialist departments.

This commitment reflects the importance that the Bank attaches to the qualifications and development of its employees.

¹  _{No key figures are shown for 2021 and 2020, as SZKB implemented a new HR system in 2022.}

The remuneration model for SZKB’s Executive Board is structured largely in a similar manner to that of employees (see Chapter 2.2.1 Relevance, objectives, management approach and measures, section Remuneration model): It consists of a fixed basic salary and a variable component.

• Half of the variable remuneration relates to individual performance (results and conduct) of the respective member of the Executive Board as well as to the achievement of strategic performance criteria of the entire Bank in the past financial year. Two-thirds of the strategy bonus is distributed as deferred compensation. The Bank Council defines the key performance indicators (KPI).
• There is no salary component in the form of shares or options. SZKB is not a private company but rather an independent institution under public cantonal law.
• New Compensation Regulations will be introduced for the Executive Board on 1 January 2025. From this point onwards, the compensation of the Executive Board will be comprised of fixed compensation and a variable performance-related component. The previous additional performance-related component dependent upon the achievement of strategic performance targets will no longer be necessary. At the same time as the introduction of the new Compensation Regulations, the methodology used in the Compensation Report will also be adapted to the current industry standards as of 1 January 2025. From this point onwards, the profit share will no longer consist of the performance-related component paid out but rather the component allocated. This should improve transparency and comparability of compensation over the years.

The compensation model for the Bank Council is approved by the Cantonal Supervisory Commission and does not include a profit-sharing component.

Assessment of effectiveness

SZKB uses a wide range of measures to promote its employees and create a modern, supportive working environment. Programs for advanced training, flexible working time models and initiatives such as the SZKB women’s network help contribute to skill enhancement and increased workforce satisfaction. Regular surveys ensure that the measures are effectively implemented and adapted continuously to the needs of employees. At SZKB, HR topics and processes are well anchored in the Bank Council, the Executive Board, the HR department and line management. Overall, SZKB considers the measures taken to have been effective.

Further development and next steps

Starting in 2025, SZKB will be offering three additional apprenticeships in the Sales department and will train two apprentices for the new "Mediamatiker" apprenticeship. The new "digital business developer" apprenticeship will also be offered in 2026.

Employees in the 58+ age group have the option of partial retirement from 1 January 2025. They can reduce their workload by 20% without any financial losses under the pension scheme. These will be compensated by the Bank. In addition, an orientation seminar is offered to prepare for the next phase in life.

From 1 January 2025 onwards, SZKB will adhere to the Agreement on Working Hours (VAZ). This allows certain groups of employees to avoid having to record working hours. All other employees record their working hours in a simplified manner as daily net working hours. In this way, SZKB promotes a culture of working time rooted in trust.