The momentum in the world economy anticipated to be trimmed this year, together with the inventory adjustments in the semiconductor industry and worldwide weaker demand for mobile devices, would drag the export growth. However, the reshoring of major Taiwanese manufacturing companies will increase the domestic production capacity which may partially offset the drag. In aggregate with services exports, it is projected that the real exports goods and services will grow by 2.62%. Real private consumption will grow by 2.02%, supported by labor market improving, the individual income tax cuts, and the subsidy programs for domestic travels and energy-efficient appliances replacements, but continuously dampened by the declining demographic dividend, the economic uncertainties and volatile financial markets. Real private fixed capital formation is forecast to increase, mainly spurred by the continuing investment of semiconductor manufacturing, and the manufacturers’ relocation encouraged by the government’s “Action Plan for Welcoming Overseas Taiwanese Businesses to Return to Invest in Taiwan”.
In the DGBAS's latest estimation in November 2021, the estimates of Taiwan's economic growth rates remained 6.09% for 2021, per capita GDP raised to US$32,787, per capita GNI raised to US$33,420, and the CPI is increased by 1.98 percent. In 2022, GDP is expected to rise by 4.15%, per capita GDP are expected to rise to US$34,880, per capita GNI are expected to rise to US$35,394, and the CPI will gently rise by 1.61%.
| Year | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 Q3(a) |
|---|---|---|---|---|---|---|---|---|---|
| Economic Growth Rate (based on GDP) | 2.17% | 3.31% | 2.79% | 3.06% | 3.39% | 6.62% | 2.59% | 1.28% | 3.97% |
| Per Capita GNI (US$) | 23,684 | 25,704 | 26,421 | 26,561 | 29,369 | 33,808 | 33,624 | 33,365 | 8,753 |
Source:DGBAS
The unemployment rate in October 3.40%.
Overall, Taiwan's labor market is quite stable, as demonstrated by the long-term growth trend from 11.2 million people in 2011 to 11.92 million in 2021. In 2021, the labor force participation rate was 59.18% and the unemployment rate was 3.67%. Due to the great increase in the popularity of higher education over the past decade, the proportion of the labor force with college degrees or higher has continued to rise. The government has also promoted the combination of learning and application, industry-university cooperation, lifelong education, and other policy programs to further strengthen the competitive advantage and quality of Taiwan's workforce.
Over 300,000 students graduate from colleges and universities in Taiwan every year, of which close to 60,000 have master's and Ph.D. degrees. In 2022, 6.21 million employees or 55% had a college degree or higher. In 2021 there were approximately 14.7 person-years of full time researchers per 1000 employees. The accumulated technical and managerial talent in the manufacturing and service industries means that ensures that foreign firms investing in operations in Taiwan can meet their need for high-level technical and management personnel.
During the past decade, Taiwan's consumer price index (CPI) has risen by an average of 1% per year, while the salaries of industrial and service employees have risen by an average of 2.3% per year. Although Taiwan's commodity prices and salaries have risen steadily for many years, the productivity of industrial sector employees has increased at an average rate of 3.6% per year, and labor productivity is continuing to rise.
| Electronic Components Manufacturing | Wholesale and retail | Information and telecommuni -cations | Finance and insurance | Real Estate | |
|---|---|---|---|---|---|
| Executives and Supervisors | 106,741 | 72,253 | 95,096 | 113,821 | 82,757 |
| Professionals | 73,407 | 55,163 | 63,847 | 68,913 | 60,425 |
| Technicians and Associate Professionals | 45,358 | 42,789 | 49,288 | 56,872 | 40,629 |
| Clerical Support | 42,345 | 35,306 | 37,802 | 49,758 | 34,763 |
| Service and Sales | 35,946 | 33,434 | 39,812 | 51,307 | 32,779 |
| Artisans, Machinery Operators, and Assemblers | 36,088 | 35,882 | 46,606 | 45,083 | 35,968 |
| Basic Laborers | 33,494 | 31,503 | 30,824 | 39,016 | 30,425 |
Source: Ministry of Labor (https://english.mol.gov.tw/) occupational category salary survey
Public servants, teachers, and military personnel had salary increased by 4% in 2024.
According to the latest Salary Trends Survey from ECA International, the world's leader in the development and provision of solutions for the management and assignment of employees around the world, the report points out in terms of real salary increases, Taiwan's Actual salary forecast growth rate in 2024 is 2.5%. Therefore, the projected salary adjustment rate will be expected to stay at the same level to reflect the steady economic situation in Taiwan with the trend of global slow economics.
In Taiwan, total guaranteed salary consists of basic guaranteed salary plus any fixed allowances, such as job allowance or shift allowance, etc, excluding overtime. The annual guaranteed salary can be 13 or 14 months, and the 13th or 14th months of salaries are usually paid before the Chinese New Year Holiday.
| Sector/Year | 2018 | 2019 | 2020 | 2021 | 2022 |
|---|---|---|---|---|---|
| Average Salary (NT Dollar) | Average Salary (NT Dollar) | Average Salary (NT Dollar) | Average Salary (NT Dollar) | Average Salary (NT Dollar) | |
| Manufacturing | 52,948 | 53,776 | 54,004 | 57,473 | 60,451 |
| Manufacture of food products & prepared animal feeds | 41,744 | 43,332 | 43,441 | 43,969 | 45,503 |
| Manufacture of beverages & tobacco products | 60,035 | 60,798 | 58,925 | 57,800 | 60,324 |
| Manufacture of textiles | 40,766 | 41,529 | 39,841 | 40,690 | 42,019 |
| Manufacture of wearing apparel & clothing accessories | 37,734 | 36,763 | 38,021 | 38,932 | 39,983 |
| Manufacture of leather, fur & related products | 44,537 | 45,863 | 47,165 | 45,394 | 51,859 |
| Manufacture of wood & of products of wood & bamboo | 35,460 | 35,579 | 36,248 | 37,165 | 38,269 |
| Manufacture of paper & paper products | 39,653 | 39,484 | 40,589 | 41,925 | 45,192 |
Source: Directorate-General of Budget, Accounting and Statistics, Executive Yuan, R.O.C. (Taiwan),
website: Time Series (dgbas.gov.tw)
It is increasingly popular for companies to adopt performance-based variable bonus programs in Taiwan. The practice of adopting variable bonus programs increases bonus pay as a percentage of the total cash rewards package and applies to all levels of jobs. Typically, the ratio of variable payment as a percentage of total cash increases with the level of job grade and performance of employees in a company.
In Taiwan, variable payment may also be separated into short-term incentives, such as sales incentives and sales commissions, and long-term incentives, such as stock reward programs. Stock reward programs can also include profit-sharing stock grants and stock options.
Profit-sharing stock grants are a unique reward tool in Taiwan. For accounting purposes, these are regarded as retained earnings distributions and thus do not occur as an expense in a company’s books. For employees, it is taxed at par value but has the actual pay power at market value. The combination of these favorable accounting and tax treatments has made profit-sharing stock grants a main component of payment for high-growth local High Technology companies.
In early 2007, however, the Ministry of Economic Affairs announced that accounting for employee profit sharing should follow the concept of International Accounting Standards to be recognized as expenses, and the effective date for the change would be January 1, 2008. The cost of employee profit sharing should be accounted for by the “fair value” method in order to appropriately reflect the true operation cost of employee compensation in the income statement. In response to this trend, Taiwanese companies are reviewing their reward strategy and making necessary changes to the current reward programs in order to attract and retain talent.
Taiwan’s labor law requires that employers provide benefits to their employees. One of the benefits considered most important is that employers are required to help their employees enroll in Taiwan’s social security system and to pay for LI, employment insurance, and health insurance. The LI rate is 8% of the current monthly wages; the rate is 1% for employment insurance; and 4.91% for health insurance, giving rise to a total of 13.91% of the current monthly wages of the insured. Employers also must not pay less than 6% of an employee’s monthly wage for the pension plan and must deposit the money in an “Individual Pension Account” established by the Bureau of Labor Insurance. For employees who elected the old pension scheme under the Labor Standards Act (LSA), the employer must make deposits into the fund according to the employee’s seniority, wages, and the company’s turnover rate for the past five years, as well as the number of employees who will retire in the next five years and deposit the pension fund into the designated bank account in the Bank of Taiwan in the name of the company.
While multinational companies tend to provide enhanced benefits to attract and retain talent, most domestic companies only provide benefits based on the minimum legal requirements. Common employee benefits include leaving service benefits (LSB), life, medical, accident and business travel insurance, physical examinations, festival bonuses, housing allowances, etc.
It is a common practice for companies to purchase life and/or accidental insurance as a means to care for survivors if an employee dies of non-occupational injury or disease, or is disabled by an accident. Group insurance is usually arranged as a one-year term life policy and/or accidental death and dismemberment policy with a typical target benefit of 2 to 3 times the employee’s annual salary. In addition to the life insurance coverage, 47% of the surveyed companies would deem those deceased employees as having retired or resigned from the company, so their spouse or dependents may also receive retirement benefits or leaving service benefits. To shift the potential business operation risk associated with occupational hazards, companies may purchase insurance to fund such statutory obligations.
Most companies in Taiwan also offer group medical insurance coverage which is supplementary to their group life insurance. Benefits provided include hospital room and board, special services and medicine, doctor’s daily consultation and surgical expense reimbursements. An employee can use the plan together with NHI benefits to obtain better treatment and services. Medical benefits are normally extended to employees’ spouses and dependent children free of charge or at a nominal fee.
In addition to group insurance programs, business travel insurance is also common in Taiwan. Seventy-three percent of surveyed companies indicate that they provide travel insurance, which usually covers accidental and medical reimbursement.
Due to increasing awareness regarding the importance of employee health as it relates to profitability, most companies are required by the Labor Safety and Health Act to provide basic medical checkups. Companies may also provide comprehensive physical examinations. About 92% of surveyed companies provide medical checkups. The comprehensiveness of the checkup can vary between management and non-management levels; some can differ by age.
Employee Assistance Programs (EAP) have gained popularity in Taiwan as more companies become aware of the importance of the mental and physical health of their employees. Many corporations offer various types of EAP services to their employees to assist them in improving their work environment and in carrying out their responsibilities more efficiently.
It is a Chinese tradition to reward employees on festival occasions. In practice, about 93% of surveyed companies provide festival bonuses to employees for Chinese New Year, the Dragon Boat Festival, the Mid Autumn Festival, or Labor Day. The average cash bonus for each festival is in the range of NT$500 to NT$5,000, depending on the festival occasion, the industry and the size of the company.
Housing allowances are mainly provided to expatriates and some executives in Taiwan. About 37% of the companies provide this benefit to high level executives and expatriates.
Except in the Consumer Products Industry, the starting salary for new graduates has been declining for the past few years. The salary for sales, R&D and technical support engineers in High Technology industry are higher than for other positions. This is because of limited manpower supply for certain academic backgrounds.
The Employment Services Act governs the employment of foreigners (including Mainland-area residents, unless otherwise provided for in the applicable laws and regulations) and native employees hired by Taiwan enterprises. In addition, there are two laws further regulating the hiring of foreign professional workers, which are “Regulations on the Permission and Administration of the Employment of Foreign Workers” and “Qualification and Criteria Standards for Foreigners Undertaking Jobs Specified in the Employment Services Act”. Due to the nature of cross-strait relations, the application for Mainland Chinese professionals’ activities in Taiwan is regulated by "Permit Regulations Governing the Entry of Professionals of the Mainland Area into Taiwan for Professional Activities". An amendment to the “Regulations Governing Permission for Intra-company Transfers of Mainland Chinese Employees of Multinational Enterprises to Work in Taiwan” allows Taiwanese-invested multinationals with parent companies or headquarters in Taiwan and their branches or subsidiaries located in at least two other countries to transfer Mainland Chinese staff to work in Taiwan. The amendment is expected to provide more flexibility for multinational enterprises headquartered in Taiwan.
For foreign professionals, the prerequisites for a work permit depend on the education level and the working experience of the applicant. For example, a foreigner with a college/university diploma must have 2 years of prior working experience in order to apply for the work permit in Taiwan, but for a foreigner with a Ph.D./Master degree, there is no prior working experience requirement. The duration of a work permit shall not exceed 3 years and applications for extension can be submitted based on business needs. The application process takes about 10 working days to be approved by the Ministry of Labor (MOL) if all required documents are submitted and both the employer and foreign workers meet regulatory requirements. Before arriving in Taiwan, the foreign individual must apply for a residence visa, and once in Taiwan, he/she must apply for an ARC within 15 days of arrival or within 15 days before the expiration of a “visitor visa” that does not state that “no extension will be granted and the visa holder is prohibited from staying in Taiwan for 60 days or more”. The application process for a resident visa is about 7 working days, and application is handled by the Ministry of Foreign Affairs. The ARC application is processed in approximately 5 working days by the National Immigration Agency, part of the Ministry of Interior. Upon the expiration of the ARC, the extension application can be submitted to the National Immigration Agency for processing. Furthermore, the Immigration Act is under review that, in the future, would allow foreign nationals to apply for permanent residence as long as they meet the specific requirements. Work permit applications from South Eastern and Western Asian Countries such as Afghanistan, Iran, Malaysia or Vietnam, etc. require notarization from the Taiwan Consulate Office in those countries.
In order to better utilize mainland China’s specific industry knowledge and technology, currently visa applications are open to mainland-area professionals with requisite skills or knowledge. However, the total period of stay is limited to 6 years. Professionals from China may also obtain a visa to Taiwan under the condition that it is an internal employment transfer within a multinational company. The initial stay may not exceed 3 years; at the end of this initial period, however, subsequent stays can be extended with no fixed limit on the number of extensions. The visa application process takes about 5 working days, and requires authorization by the National Immigration Agency under the Ministry of Interior and the Department of Investment Review under the Ministry of Economic Affairs.
For more information, please check the “Workforce Development Agency” website (https://www.wda.gov.tw/en/Default.aspx), the website of the National Immigration Agency (https://www.immigration.gov.tw/) or the website of the Department of Investment Review (http://www.moeaic.gov.tw/english/index.jsp).
As mentioned previously, the Financial, IT and Telecom Industries are expected to have the greatest number of job openings. Below are the estimated market manpower demands:
| Industry | Highest Turnover Job | Job Needed Most | Job Most Challenging to Recruit for |
|---|---|---|---|
| Chemical/Petrochemical | Sales Engineer | Field Service Engineer | Sales Engineer |
| Sales Representative | Sales Representative | ||
| Consumer Products | Account Executive | Account Executive | Product Manager |
| Sales Representative | Sales Representative | ||
| Bio-tech/Pharmaceutical | Sales Representative | Sales Representative | Product Manager |
| High Technology | Field Service Engineer | Field Service Engineer | Field Service Engineer |
| R&D Engineer | R&D Engineer | R&D Engineer | |
| Financial | Direct Sales | Direct Sales | Direct Sales |
| Consumer Banking Sales | Consumer Banking Sales | Consumer Banking Sales | |
| Telemarketer | Actuarial Staff | Actuarial Staff | |
| Brokerage Sales | Brokerage Sales | Brokerage Sales |
Source: Watson Wyatt Total Rewards Survey (Taiwan Area)
Note: 80% of the survey participants were subsidiaries or branches of foreign companies.
To improve competitiveness and boost employment, the Workforce Development Agency, MOL has set up five employment services centers, 33 employment services offices, and 256 employment services stations. These facilities assist with recruitment and job opportunities, process unemployment applications, analyze and investigate employment market data, and provide employment consulting services.
Private employment agencies and human resource companies, such as headhunters and management consultant companies, are on the rise in Taiwan. These companies provide recruitment, training, wage calculation, talent dispatch, and human resource management consulting services. To set up a private employment agency/human resource company, approval must be obtained from the competent authorities under the Employment Services Act and its accompanying regulations. Once established, such a company will be supervised by the competent authority.
The government of Taiwan has been implementing a cooperative occupational education program, which encourages corporations to sponsor educational training programs or courses for students. This effort focuses on key content areas of entrepreneurship and work readiness. Corporations may submit program applications to the Department of Education for approval. Depending on the nature of the program, the training can take the form of courses, part-time jobs, research positions, internships, or scholarships.
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