Publications

General

Taiwan’s economy is expected to grow by over 5.5% in 2011.  This is due mainly to robust exports and an increase of domestic private consumption. 

Despite its relatively small population (around 23 million) and scant natural resources, Taiwan has a robust market economy.  It has one of the highest per capita GDPs and household disposable incomes in Asia.  The island runs a trade surplus, and its foreign reserves are the fourth highest in the world.

Since 2008, cross-strait economic ties between China and Taiwan have increased significantly.  China is Taiwan’s largest export market as well as its second-largest source of imports after Japan.   China is also the island’s number one destination for foreign direct investment.  An important pillar of Taiwan’s economy is its service industry, which accounts for over 67% of its GDP. 

Taiwan currently has a labor shortage at rates not seen in 13 years.  This shortage is mostly seen in the industrial and service sectors. There are over 230,000 job openings that are not being filled, a 44% increase from 2010.  Companies are struggling to recruit qualified employees, and they blame Taiwan’s secondary and tertiary schools for not providing such employees.

Wages and Compensation

Normally, employees in Taiwan are paid twice a month.  Overtime pay for non-management positions usually ranges from 1.5 to 2 times the hourly wage.  Government law states that overtime may not exceed 46 hours in a month.  However, enforcement of overtime pay is lax, and up to 13% of employees do not receive overtime pay.

Taiwan raised its minimum monthly wage for the first time in four years by 3.5% to $620.  This was the first increase since 2007.  In July 2011, the Taiwanese government announced its plans to raise the minimum monthly wage again by 5% to $680 in 2012.  The government justified its increases due to the great disparity in wealth between the richest and poorest households in Taiwan. An estimated 1.5 million workers are expected to benefit from this wage hike.

Professional salaries are generally lower than those in the United States, but benefits and perks remain high for expatriates working on the island.

In Taiwan, bonuses are a significant part of compensation, the most important being the Chinese New Year Bonus.  Bonuses range from 1 to 6 months’ salary, and are given by both local and foreign firms.

Other Benefits

Implemented in 1995, National Health Insurance (NHI) is mandatory for all Taiwanese employees and foreigners.  A 2010 amendment lowered the contribution rates from 5.2% to 4.9% of each employee’s monthly salary.  Premiums are shared between the employer, employee and the government, with the employer responsible for 60% of the premium.

NHI provides a comprehensive benefit package that covers preventive and medical services, prescription drugs, dental services, and even Chinese medicine and home nurse visits.  It also provides coverage for inpatient, outpatient, dental care and maternity expenses for both employees and their family members.  Taiwan is unique in that companies are mandated by law to pay full wages during maternity leave.  Employees must be given 8 weeks of maternity leave.

As for housing, the Council of Labor Affairs usually assists workers in finding affordable housing.  The Council also provides low-interest loans for companies that build dormitories, so as to encourage employers to provide housing for their employees.  The average housing price in Taipei is about 9 times that of a buyer’s annual income.

Labor and Employment Insurance Acts

Labor Insurance Act – The Act was recently amended in 2011.  Under this act, Taiwanese employees are provided with unemployment, disability, retirement and death benefits.  Comprising 8% of monthly salary, it is jointly contributed by employers, employees and the government.  Employers must cover 70% of the contribution. Both local and foreign employees are eligible.  All companies with at least five employees are required to participate.

Employment Insurance Act – Passed in 2003, the Act provides for benefits to be paid to unemployed workers.  Workers insured under the scheme will be entitled to benefits for up to six months if they are involuntarily unemployed.  The law compels workers between 15 and 60 years of age to join the program.

However, the program excludes workers who have been covered by other insurance programs such as those for civil servants, teachers, military servicemen, as well as those who have obtained old-age benefits.

Currently, 60% of the unemployed employee’s previous salary is paid in the event of involuntary unemployment.  However, there are plans to increase this amount to 70%.

Labor Protection Act – Pension Scheme – New pension regulations went into effect in mid-2005.  Under the new regulations, employees who have changed jobs will continue to be eligible for pensions, as funds can be transferred from one job to another.  Employees eventually receive their monthly pension when they reach 60 years of age.  Employers must contribute 6% of employees’ monthly salary and employees have the option of contributing up to 6%.

Recruiting Strategies

Relationships and Networking – As in China and Hong Kong, personal networking in Taiwan is important in job seeking.

Newspapers – Job seekers in Taiwan turn to the wide array of newspapers when searching for jobs.  Major dailies include the China Post, Taipei Times, Apple Daily and Liberty Times.

Internet Job Sites – Like elsewhere in Asia, Internet job searching is hugely popular in Taiwan.  Some of the popular recruiting websites include www.104.com.tw, www.1111.com.tw, and http://www.518.com.tw.

University Recruiting – Recruiting at campuses is common, especially for entry-level positions.  Top universities in Taiwan include the National Taiwan University, National Tsing Hua University, National Chiao Tung University, National Cheng Kung University and National Yang Ming University.

Others – Headhunting for middle and senior level positions have become increasingly popular in recent years.  This is especially true within high-tech industries, and for senior technical and managerial positions.   

Over the past year, legislators have also called on the government to step up its efforts of recruiting overseas Taiwanese and foreign high-tech professionals.  This is mainly due to the fierce competition for talent from other countries in the region, such as Singapore and South Korea. 

Many feel that the government should offer additional incentives to lure talented foreign professionals back to Taiwan.  In response to this need, the Taiwanese government has amended its Immigration Act.  The visa, work permit, residence certificate and re-entry permit were combined into one document, simplifying paperwork and attracting foreign professionals.  Additionally, children of Taiwanese professionals abroad may now receive resident permits or permanent stay when they arrive. This change attracts more returnees to Taiwan.