Publications

General

Taiwans economy is expected to grow by over 4% in 2007. This is due mainly to robust exports and a revival of domestic private consumption.

Despite its relatively small population (around 23 million) and scant natural resources, Taiwan has a robust market economy. It is the worlds 19th largest economy and is home to a world-renowned high-tech sector. It also 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 third highest in the world.

Despite restrictions on cross-strait links, China has overtaken the United States to become Taiwans largest export market. China is also Taiwans second-largest source of imports after Japan and is the islands number one destination for foreign direct investment.

An important pillar of Taiwans economy is its service industry, which accounts for over 70% of its GDP. Analysts have noted that the islands economy is too heavily dependent on the electronics sector, which is increasingly facing competition from other countries in the region such as South Korea.

Wages and Compensation

Normally, employees in Taiwan are paid twice a month. The standard work week is 42 hours. Overtime pay for non-management positions usually ranges from 1.5 to 2 times the hourly wage.

Taiwan recently raised its minimum hourly wage by 44% to $2.88 per hour. The national minimum monthly wage had also been raised by around 9% to $523.64. This is the first increase since 1997, and around 1.4 million low-income workers will benefit from the raise. The government justified the increase due to the rising consumer price index, and an increase in labor productivity. Authorities also spelled out a range of measures to alleviate the impact of the increased minimum wage on businesses. These include subsidies for wages paid to disadvantaged workers, and special loans for certain sectors.

Professional salaries are generally lower than those in the United States (about 65%), 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.

In addition, there is also a separate component known as the Surplus Profit Distribution. By law, public companies are required to distribute a percentage of their profits to their employees. Most companies set this amount at 1% or lower.

Other Benefits

Implemented in 1995, National Health Insurance (NHI) is mandatory for all Taiwanese employees and foreigners. The contribution rate is 4.5% of each employees monthly salary. Premiums are shared between the employer, employee and the government, with the employer responsible for 3/5 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.

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 buyers annual income.

Labor and Employment Insurance Acts

Labor Insurance Act Under this act, Taiwanese employees are provided with unemployment, disability, retirement and death benefits. Comprising 5.5% of monthly salary, it is jointly contributed by employers, employees and the government. Both local and foreign employees are eligible.

The Act was amended in 2004. Since then, instead of a lump sum payment upon retirement, annuity payments have been required. Under the Act, 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. Foreigners are also excluded from the program.

Right now, 60% of the unemployed employees previous salary is paid in the event of involuntary unemployment. But 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.

Recruiting Strategies

Relationships and Networking As in China and Hong Kong, personal networking in Taiwan is important in job seeking. In-house HR searches are also common and highly popular.

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 fast gaining popularity in Taiwan. Some of the popular recruiting websites include www.104.com.tw, www.1111.com.tw, and www.taiwanjoblink.com.

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 Chengchi University.

Others Headhunting for middle and senior level positions have become increasingly popular in recent years. Poaching is also common, especially 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 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. These include providing residence permits and education for their children. Plans are also underway by the authorities to open offices in India to search for high-tech professionals there.

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