Taiwan 2013 Salary & Employment Report
On 22 January, the inaugural Michael Page Salary & Employment Forecast 2013 for Taiwan was released to the media at a press conference and to ECCT members at a special lunch. The report was produced by Michael Page and released in association with the European Chamber of Commerce Taiwan. The report, the first on Taiwan, is a key recruitment industry report that has been released annually to the market in a number of Asia Pacific countries for more than five years. It is based on both quantitative and qualitative research, with findings derived via a survey of employers (mostly multi-national corporations) and insights obtained through Michael Page's involvement in the professional employment market. The report is currently produced for Taiwan, China, Hong Kong, Singapore, India, Australia and New Zealand. The main findings of the report were summarized in a presentation by Dan Chavasse, Regional Managing Director for North Asia at the lunch. Also speaking at the lunch, Tony Phoo, Economist, Global Market Research, Standard Chartered Bank (Taiwan) gave some forecasts and insights on Taiwan's economic prospects, risks and challenges.
● According to the report, there is a shortage of skilled personnel in Taiwan across all industry sectors and at all levels despite some continued challenging economic conditions in other parts of the world and a noticeable slowdown in certain sectors and work opportunities in China. Moreover, the continued migration of Taiwanese professionals to other Asian countries will add to an existing skills shortage in the local recruitment market over 2013 and prompt employers to place an increased focus on talent attraction and retention strategies.
● Most employers surveyed (69%) for the report anticipate their employees will look for career opportunities in other Asian countries and relocate for work during 2013. This percentage is much higher than China (51%) and Hong Kong (39%).
●Talented individuals from Taiwan are lured not only by higher salaries abroad but also to gain experience and improve their career prospects.
●According to Chavasse, Taiwan talent has been and continues to be highly sought after and the lack of talent in China drives aggressive hiring policies from the mainland. While Hong Kong and Singapore remain popular locations, the majority of survey respondents (67%) identify China as the preferred destination for departing Taiwanese professionals.
●This mobility of Taiwan's workforce is likely to make the country's existing professional skills shortage more pronounced and 58% of survey respondents report that they are expecting a skills shortage over the next 12 months. The shortage of professional talent across all sectors and at all levels will present challenges for employers, particularly if economic conditions start to improve during 2013.
●Some 55% of surveyed employers indicate the skills shortage will result in the development of more targeted attraction strategies to attract and retain staff.
● The major challenge for employers in Taiwan continues to be working to ensure they have the best employees with the right skills for their business. Employers will therefore be placing an enhanced focus on talent attraction strategies with the view to create more targeted offerings to entice employees to join their company, according to the report.
● In addition, talent attraction strategies likely to be implemented include non-financial incentives such as career development opportunities and work-life balance options, however financial reward remains important. As more local professionals relocate to other Asian countries including China, talent attraction becomes even more of a focus.
● According to the survey findings, the same percentage of employers believe employees are likely to leave their current employer in order to achieve a better work-life balance as they are to leave for an improved salary with another employer (21%).
● The majority of Taiwanese work over 40 hours a week, according to their managers, with 40% working between 40 and 45 hours, 22% working between 45 and 50 hours a week and 10% working 50 hours or more.
● To attract and retain talented professionals, employers will need to implement a range of talent attraction and retention strategies including non-financial incentives, such as career development opportunities and work-life balance options. For employers within multinational businesses, learning and development opportunities are a particularly popular career incentive, with many employers developing their talent in Taiwan and then providing employees with career opportunities in other Asia-based locations.
·Structured career progression was rated by the highest percentage of surveyed employers (36%) as an important attraction and retention strategy, followed by 23% choosing recognition and rewards. Promoting a strong company culture and providing work-life balance options are other non-financial talent attraction and retention strategies employers are likely to make use of.
●Taiwan's professional skills shortage will place pressure on salary levels, with 44% of employers surveyed believing that salaries will rise above the inflation rate.
● The majority of respondents (80%) will base salary increases during 2013 on performance, with most (41%) likely to award an average increase in the range of 3-4%. The migration of talent would slow if China's talent base increased sufficiently or salaries in Taiwan increased. However, based on the current trends, local salaries in fields tracked in the survey are still below those of Hong Kong and China.
● Chavasse pointed out that this expected range of salary increases in Taiwan is lower than in other markets such as Hong Kong and China, meaning that the remuneration gap between Taiwan and regional rivals could go even higher.
● Given salary levels in Taiwan are on average lower than some other Asian countries, a general rise in remuneration offered by employers in Taiwan over 2013 would assist with talent attraction and retention. It may even go some way towards encouraging local professionals to stay in Taiwan and expats to return home, according to the report.
● In his presentation, Tony Phoo said that Standard Chartered expects Taiwan's economic growth to rebound to 3.9% in 2013, up from 1.5% in 2012 on the back of a tech sector rebound, which would bode well for capital expenditure and hiring.
● While the potential worsening of the European sovereign debt crisis remains a major drag on the growth outlook, Phoo said that this is likely to be cushioned by a recovery in mainland China and steady growth in United States.
● According to Phoo, the recent uptrend in key economic data – including industrial production, capital goods imports, and exports orders – suggests that economic activity bottomed in 2012.
● While the near-term economic outlook is fairly optimistic, Taiwan still faces long term challenges. To succeed in the long term, Taiwan will need to move away from the current growth strategy that depends largely on markets in the US as well as Europe and diversifying into new growth markets, according to Phoo. This also means that the island will need to review its current reliance on traditional low-cost contract manufacturing, known also as the Original-Equipment Manufacturing (OEM) and/or Original-Design Manufacturing (ODM) models, according to Phoo.
● For Taiwan producers based in mainland China, the need to shift away from the increasingly competitive low-price OEM/ODM production is becoming even more pressing nowadays, given rising production costs, shortages of labour, intensifying competition from local mainland Chinese producers in the OEM/ODM space, an appreciating currency, and fast-thinning profit margins.
● However, the transformation to an "own-brand" OBM producer will not be easy. Taiwanese producers are known to be extremely competitive in terms of cost management, but lack expertise when it comes to managing a brand, according to Phoo.
● Most employers surveyed (69%) for the report anticipate their employees will look for career opportunities in other Asian countries and relocate for work during 2013. This percentage is much higher than China (51%) and Hong Kong (39%).
●Talented individuals from Taiwan are lured not only by higher salaries abroad but also to gain experience and improve their career prospects.
●According to Chavasse, Taiwan talent has been and continues to be highly sought after and the lack of talent in China drives aggressive hiring policies from the mainland. While Hong Kong and Singapore remain popular locations, the majority of survey respondents (67%) identify China as the preferred destination for departing Taiwanese professionals.
●This mobility of Taiwan's workforce is likely to make the country's existing professional skills shortage more pronounced and 58% of survey respondents report that they are expecting a skills shortage over the next 12 months. The shortage of professional talent across all sectors and at all levels will present challenges for employers, particularly if economic conditions start to improve during 2013.
●Some 55% of surveyed employers indicate the skills shortage will result in the development of more targeted attraction strategies to attract and retain staff.
● The major challenge for employers in Taiwan continues to be working to ensure they have the best employees with the right skills for their business. Employers will therefore be placing an enhanced focus on talent attraction strategies with the view to create more targeted offerings to entice employees to join their company, according to the report.
● In addition, talent attraction strategies likely to be implemented include non-financial incentives such as career development opportunities and work-life balance options, however financial reward remains important. As more local professionals relocate to other Asian countries including China, talent attraction becomes even more of a focus.
● According to the survey findings, the same percentage of employers believe employees are likely to leave their current employer in order to achieve a better work-life balance as they are to leave for an improved salary with another employer (21%).
● The majority of Taiwanese work over 40 hours a week, according to their managers, with 40% working between 40 and 45 hours, 22% working between 45 and 50 hours a week and 10% working 50 hours or more.
● To attract and retain talented professionals, employers will need to implement a range of talent attraction and retention strategies including non-financial incentives, such as career development opportunities and work-life balance options. For employers within multinational businesses, learning and development opportunities are a particularly popular career incentive, with many employers developing their talent in Taiwan and then providing employees with career opportunities in other Asia-based locations.
·Structured career progression was rated by the highest percentage of surveyed employers (36%) as an important attraction and retention strategy, followed by 23% choosing recognition and rewards. Promoting a strong company culture and providing work-life balance options are other non-financial talent attraction and retention strategies employers are likely to make use of.
●Taiwan's professional skills shortage will place pressure on salary levels, with 44% of employers surveyed believing that salaries will rise above the inflation rate.
● The majority of respondents (80%) will base salary increases during 2013 on performance, with most (41%) likely to award an average increase in the range of 3-4%. The migration of talent would slow if China's talent base increased sufficiently or salaries in Taiwan increased. However, based on the current trends, local salaries in fields tracked in the survey are still below those of Hong Kong and China.
● Chavasse pointed out that this expected range of salary increases in Taiwan is lower than in other markets such as Hong Kong and China, meaning that the remuneration gap between Taiwan and regional rivals could go even higher.
● Given salary levels in Taiwan are on average lower than some other Asian countries, a general rise in remuneration offered by employers in Taiwan over 2013 would assist with talent attraction and retention. It may even go some way towards encouraging local professionals to stay in Taiwan and expats to return home, according to the report.
● In his presentation, Tony Phoo said that Standard Chartered expects Taiwan's economic growth to rebound to 3.9% in 2013, up from 1.5% in 2012 on the back of a tech sector rebound, which would bode well for capital expenditure and hiring.
● While the potential worsening of the European sovereign debt crisis remains a major drag on the growth outlook, Phoo said that this is likely to be cushioned by a recovery in mainland China and steady growth in United States.
● According to Phoo, the recent uptrend in key economic data – including industrial production, capital goods imports, and exports orders – suggests that economic activity bottomed in 2012.
● While the near-term economic outlook is fairly optimistic, Taiwan still faces long term challenges. To succeed in the long term, Taiwan will need to move away from the current growth strategy that depends largely on markets in the US as well as Europe and diversifying into new growth markets, according to Phoo. This also means that the island will need to review its current reliance on traditional low-cost contract manufacturing, known also as the Original-Equipment Manufacturing (OEM) and/or Original-Design Manufacturing (ODM) models, according to Phoo.
● For Taiwan producers based in mainland China, the need to shift away from the increasingly competitive low-price OEM/ODM production is becoming even more pressing nowadays, given rising production costs, shortages of labour, intensifying competition from local mainland Chinese producers in the OEM/ODM space, an appreciating currency, and fast-thinning profit margins.
● However, the transformation to an "own-brand" OBM producer will not be easy. Taiwanese producers are known to be extremely competitive in terms of cost management, but lack expertise when it comes to managing a brand, according to Phoo.
