Labor Market Summary
According to the report by the Directorate General of Budget, Accounting & Statistics, Executive Yuan, Taiwan’s gross domestic product (GDP) in 2022 Q2 grew by 3.05% on a year-on-year basis driven by the continued demand for innovative technology applications and digital transformation, alleviation of material shortage within the supply chain and the impact of higher product prices. Due to the impact of tightening monetary policy in various countries and the higher material costs caused by the stalemate of the Russia/Ukraine war, the actual GDP is projected to grow by 3.76% in 2022, down by 0.15 percentage points from the May forecast of 3.91%.
Regarding domestic demand, consumption momentum was restricted due to the rising COVID-19 cases in 2022 Q2. However, the base was low compared to the implementation of the three-level vigilance control in the same quarter of last year. In 2022 Q2, the revenue in retail and the food and beverage segment increased by 9.56% and 17.63% respectively, with a significant increase in the consumption of transportation and leisure and entertainment-related services, as well as a 10% increase in the number of passengers carried by public transportation.
Net increase or decrease in manpower demand at the end of October 2022 compared to the end of July: according to industry demand
Source: The second survey of manpower needs by the Ministry of Labor in 2022
According to data released by the Ministry of Labor, with the prospect of increasing global demands, Taiwan’s adoption of pandemic prevention measures and economic development in parallel, and optimism about tourism business opportunities in the peak summer season, it is estimated that between the end of July 2022 and the end of October 2022, manpower demand will increase by 60,000 persons. Industries with the highest workforce demand are still predominately in manufacturing, with a net increase in demand of 29,000 persons mainly due to the expansion or diversification of operations (60.4%). The wholesale and retail segment, and the accommodation and catering segment, are expected to have a net increase in manpower demand of 12,000 people due to the easing of the epidemic and consumption recovery.
Reasons for the increase in manpower at the end of October 2022 compared to the end of July
Source: The second survey of manpower needs by the Ministry of Labor in 2022
Compared to the previous year, the unemployment rate declined by 0.75 percentage points in July 2022, and the seasonally adjusted unemployment rate is 3.78%. The average salary for the month was NT$46,887, an increase of more than 3.97% on the same month last year. The number of unemployed persons was 448,000 in July 2022, with the highest unemployment rate in the 20–24 age bracket, accounting for 12.68%. This is attributed to people in this group being in the initial job search stage and adapting to the workplace after graduation.
The global economy is slowing down and the job market demands are more conservative
People were less willing to job transition due to the epidemic in 2022 Q2, however, the overall economy was even colder in 2022 Q3, affected by inflation, COVID lockdown, etc. At the same time, some technology companies began to lay off employees and it is foreseeable that the domino effect may continue until Q4, further restricting job transition. The overall industry will continue to recruit talent in Q4 but this will be extended.
The Taiwan government has announced an increase to the minimum wage next year but this will also drive up the manufacturing costs and the unit price of goods, thereby decreasing the public’s purchasing power, which may encourage people to work abroad.
The national policy "Golden Employment Card" promoted by the Taiwan government allows foreigners to obtain a work permit and residence visa at the same time and then come to Taiwan to look for a job and entrepreneurial opportunities. This differs from the previous policy requiring a work permit before applying for a residence permit. It is expected to attract overseas talent who are more willing to work in Taiwan and resolve the talent shortage in some industries.
In response to global commitments and goals for net-zero carbon emissions, Taiwanese companies also face legal compliance issues regarding carbon taxes and carbon fee regulations for raw materials. In 2022 Q3 and Q4, the finance, manufacturing, and construction industries have all begun to recruit ESG-related talents, mostly from corporate public relations, human resources, or supply chain management fields, or those who have experience in ESG trends research in the financial industry.
Corporate recruitment must be more flexible to meet the talent needs of emerging industries
When evaluating job opportunities, people usually compare the salary and benefits provided by different enterprises, therefore, enterprises are recommended to review and adjust salaries if necessary. In addition, under the gradual easing of the epidemic, talents are more willing to be on an expat package and talent is in short supply as those working overseas are no longer returning to Taiwan like when the epidemic began.
It is recommended that companies take aggressive actions to seize opportunities to hire talents when the overall market is relatively conservative. Especially under the talent magnet effect due to the recruitment in the semiconductor industry, other industries, such as the energy industry, must communicate the company’s vision and development plan to job seekers to attract talent.
At the same time, enterprises must also consider how to retain talent. For example, enterprises expect that talents meet all requirements of language, license, and relevant experience. However, when people are reluctant to change jobs and companies cannot find suitable candidates, enterprises need to adjust the recruitment requirements. In emerging fields such as ESG, information security, etc., due to the scarcity of talent with relevant experience and backgrounds, companies can flexibly hire cross-field talents and provide training opportunities to cultivate talent.
In addition, the human resources department needs to understand the overall industry, research talent market trends, and find the right channels to approach potential talents with marketing skills. For instance, HR may look for potential employees from sophomores and juniors in colleges or attract more media exposure to enhance recruitment.
Job seekers need to check that their language skills, certificates, and relevant experience meet the requirements. In addition to accumulating existing professional experience, job seekers should expand the breadth of their skills, such as big data analysis, etc., in line with the employers’ expectations for today's job seekers. The employee not only performs as a cog in the machine for a company's daily operation but also grows with the company as a partner.
The benefits and risks coexist in emerging industries with high salaries, new technologies, and high risks. Therefore, talents need to rationally view opportunities and dynamic market changes. In terms of soft power, job seekers need to strengthen their stability, proactive attitude, and communication skills, cultivating the ability to think and solve problems. This is the fundamental way to deal with drastic market changes.
In addition, job seekers can also break the persistence of only looking for regular job opportunities and consider entering larger-scale or foreign enterprises first to accumulate working experience by seeking the opportunity of temporary manpower.
Industry Outlook
Finance and Banking
In Q3, due to the public security issues in Cambodia resulting in too many uncontrollable factors in the domestic environment, it has become challenging to recruit accountants on an expat package. Even if the company offers many job openings, such as audit supervisors, factory management supervisors, and accounting supervisors, most job seekers are reluctant to consider those that require business trips to Southeast Asia or to be expatriated in Southeast Asia, giving rise to an imbalance between supply and demand.
The financial industry was affected by the stock market crash and plunge in the foreign exchange market in Q3, thereby significantly reducing the number of job openings related to the stock market and bond research. It is foreseeable that in Q4, accounting and the financial market will gradually recover with a significant reversal until the middle of next year driven by the ease of the epidemic and the demand for digital transformation.
In the temporary labor market, the labor demand in Q3 was flat because foreign banks and securities companies in Taiwan maintained a streamlined labor allocation but the insurance industry was impacted by the pandemic insurance. In the second half of last year, the demand for short-term manpower increased dramatically but the insurance industry faced challenges having to settle huge claims due to the severe epidemic situation, the manpower demand reversed in Q3 and continued to be downwards. The staff attrition will continue in Q4 and it is foreseeable that there will be relatively clear short-term labor market demand until 2023 Q1.
Although the startups in the blockchain and investment platform segment are not yet profitable, from the beginning of their operations in 2022, international startups have had pressure to cope with the liquidity, which also appeared in the Taiwan market. As a result, compared to the dramatic increase in manpower demand last year, the manpower demand of emerging industries became conservative in Q3 and will continue in Q4.
Administration and human resource management
Along with the growth in domestic demand, the need for human resource management talents has also increased, particularly, in talent transformation and recruitment. From the perspective of the manpower demand by area, as the semiconductor manufacturers set up factories in middle and southern Taiwan, the talent demands from the upstream and downstream manufacturers have also increased driving the growth in manpower demand of human resource management. Since most of the semiconductor industry-related talents are concentrated in northern Taiwan, it is now more necessary for human resource management talents to have recruitment skills, like flexible talent arrangement based on their characteristics and expertise, to attract relevant talents from northern Taiwan to develop their career in middle and southern Taiwan.
Human resource management talents who have experience in talent transformation and training are also in demand. In recent years, online learning platforms and self-learning have become popular due to the epidemic, which has driven the need for human resources transformation in education and training e-learning.
Legal and Compliance
Despite inflation and the hiking interest rates affecting economic growth, the overall demand for legal compliance talents is still soaring, especially legal compliance personnel in FinTech, digital transformation, and personal data protection segments. Currently, most of the legal compliance candidates are in the financial industry. As the demands for legal compliance talent in information technology and the construction industry are also gradually raising, there is a shortage of legal compliance talent. Some enterprises have simultaneously adopted internal training to cultivate relevant talent.
In addition, frequent cyber-attacks affected the government, semiconductor manufacturers, energy, aviation, and service industries in August. The FSC stipulated that before the end of 2022, Taiwan OTC companies are required to set up a dedicated information security unit and the position of Chief Information Security Officer (CISO). Thus, enterprises must hire technical personnel in the information security segment as well as legal personnel who understand the information security risks and relevant legal regulations, and can participate in the design of information security commitments and confidentiality clauses.
Sales and Marketing
As companies continue to face the trend of digital transformation, marketing talents need to have data analysis and insight capabilities. The continuous expansion of e-commerce channels also led to the demand for digital marketing talents who can integrate online and offline channel marketing. In addition, due to the easing of the epidemic, various physical activities have resumed one after another, which has also driven relevant manpower needs.
Retail
In the post-epidemic era, job seekers are disinclined to accept the front-line service personnel offerings, while enterprises have a large demand for manpower which caused a shortage of relevant talent. Given the demand for the digital transformation of the retail industry, offline channels are turning into online channels, with most job vacancies in the fields of big data analysis, artificial intelligence, and e-commerce.
In the temporary labor market, the manpower demand of retail stores is less affected by the epidemic. Even in the face of the upcoming anniversary, Christmas and other peak seasons, some department stores and retail channels will still have the same labor demand due to budget considerations. Facing the current challenge of finding talent, companies will be more inclined to give priority to investing in recruiting full-time staff as management trainees. In terms of location, there will be a large-scale manpower demand in middle and southern Taiwan since boutique retail channels or shopping malls are successively opened.
Hospitality
In Q2 and Q3, the demand for talent in the food and beverage service segment and the hospitality segment has increased, and companies have also raised salaries to attract potential employees. However, recruitment still faces the challenge of people’s reluctance to return and manpower shortage. For example, service personnel and administrative personnel may be transferred to other technology manufacturing industries in southern Taiwan, resulting in the continued lack of labor in the food and beverage service segment. The job vacancies include front-line service personnel, senior managers, and management supervisors. In Q4, since domestic and foreign tourism is recovering, it’s foreseeable the demand for talent will continue to grow.
Merchandising and Logistics
In Q3, due to the impact of the epidemic, the overall stocking lead time of the supply chain was extended, resulting in many job openings in demand planning and supply chain planning, and procurement and customer services. However, due to people’s reluctance to accept this kind of offering, the manpower shortage will continue in Q4. In the temporary labor market, warehousing personnel are required in logistics throughout Taiwan.
Although Taiwan's retail market performed well, foreign companies will be conservative in manpower demand in Q4 since the overall Greater China market is not as good as expected.
Pharmaceuticals and Healthcare
There was a continuous demand for manpower in Q3, with many vacancies for senior executives. However, under the pressure of inflation and operation costs rising, the time for companies to consider appointments was prolonged. Foreign enterprises are more cautious in their employment decisions per their global human resource management strategies.
On the whole, the demand for sales and marketing talents from foreign enterprises has rebounded slightly. However, the demand for first-line sales personnel in pharmaceutical factories remains low, while the demand for sales personnel in the medical equipment segment is still at its peak. Most Taiwanese manufacturers are seeking high-level executives and also there are vacancies for R&D personnel, regulatory personnel, and quality control personnel. Under the government's policy of promoting the employment gold card, it will bring many benefits to the biotechnology industry to seek R&D talents by attracting foreigners to relocate to Taiwan for career development.
The demand for temporary manpower can be categorized into two segments: a support function, such as interns, sales assistants, accountants, etc., and those with specific professional skills, experience, and academic backgrounds.
In Q4, Taiwan's biotechnology industry will remain optimistic but foreign pharmaceutical and medical equipment manufacturers will be conservative.
Traditional production and manufacturing
The global economic downturn coupled with over-optimism about the market last year has reduced bicycle manufacturers’ orders. Since Q3, the pace of recruitment has slowed down, with the cessation of recruitment and layoffs. However, electric bicycle manufacturers continue to recruit key technical talents and look forward to candidates with relevant experience in the electronics industry, such as firmware and software development engineers. The manpower demand has also slowed down for other manufacturers in the panels and glass substrates segment.
The manpower demand for the offshore wind power generation industry continues. The infrastructure construction in the past two years has been gradually completed and is coming to an end. Now at the maintenance and operation stage, the demand for maintenance and operation manpower has grown accordingly. In particular, there is an urgent need for personnel with good English skills who can communicate with overseas technicians and managers. In addition, the outsourcing manufacturers of power plants have also continued to release numerous job openings regarding field engineers, mechanical and electrical engineering, and project management.
In Q4, although companies are still more conservative about their prospects, there is still a demand for factories in middle and southern Taiwan. In addition, due to some companies expanding their business in Southeast Asia or the retirement of executives, management and factory-related personnel will continue to be recruited.
Technology manufacturing
From the end of June to Q3, the dual impacts of interest rate hiking and inflation affected market performance, resulting in an increase in inventories, dragging down the overall performance, and weakening manpower demand. Indeed, 30% of companies choose to freeze manpower recruitment immediately, preferring to streamline manpower; 30% of companies extended the recruitment time from the original two or three weeks to two or three months, gradually reflecting the rise of labor cost; 40% of enterprises are recruiting as scheduled. R&D talents in the system and material fields are still the main requirements, with reduced job openings for sales and project management.
The talent demand for the semiconductor manufacturing industry in Hsinchu has changed a little in Q3 and the demand in Q4 remains flat. The main job openings are equipment engineers and machine software maintenance engineers, while the demand for non-technical personnel, such as administrative and sales staff, is decreasing. However, recruitment in Q3 and Q4 was suspended for the IC design industry due to the pressure of inventory, and the slowdown in recruitment is foreseen to last for seven or eight months.
Regarding the labor market, the number of job seekers in Q3 has increased but not as much as in the same period in 2020. The main reason is that the ongoing epidemic, inflation, interest rate hikes, and other major environmental changes have made job seekers conservative about job transition and the talent turnover rate is low. The demand for temporary manpower is more diversified, such as testing engineers, project managers, product managers, etc.
Geographically, Hsinchu is still where many senior job seekers tend to seize opportunities. However, since the semiconductor industry and foreign manufacturers have invested in expanding factories in middle and southern Taiwan, and recruiting R&D, engineering, manufacturing, and other related talents, many young job seekers choose to work in middle and southern Taiwan because they think living expenses in these areas are lower.
The demand for talent in the semiconductor and technology manufacturing industries in southern Taiwan is still high, and some semiconductor manufacturers have begun to look for AI-related talent to replace manpower needs. In addition, due to the domino effect of talent in the semiconductor industry in Tainan and Kaohsiung, cross-city talent flow has also formed in Chiayi, Tainan, and Kaohsiung.
It is foreseen that the uncertain prospects of the consumer market and the positive and negative news of emerging technologies such as Starlink and the automotive application market in Q4 will make the trend for overall talent demand flat or even tend to be conservative.
Information Technology
In Q3, the job market was significantly affected by the global economy with many technology startups facing funding challenges, which in turn affected Taiwan's talent recruitment. More companies chose to suspend recruitment, and review job openings and manpower than those in Q3 of last year. Some foreign companies in Taiwan have laid off staff on a large scale or stopped recruitment. The demand for blockchain talents has dropped significantly in software companies that focus on blockchain technology. In addition, too much hot money has flowed into the market since the epidemic and companies are overly optimistic with aggressive recruitment. When inflation occurs, the global consumption power drops sharply, so the company cannot bear the growing costs and the decline in profits and decide on layoffs to avoid further losses.
The overall economy is sluggish and some talents have become conservative about new employment opportunities, tending to remain in their current position to wait and see, while other talents are more willing to learn about new opportunities because their current company prospects are unclear. Coupled with layoffs by foreign companies and the release of numerous outstanding talents in the cryptocurrency market, the supply of talent has increased. Those enterprises which have recruitment needs can take the advantage of the flexible working style to attract talent.
Most job vacancies in the software industry continued to grow in Q3 and Q4, such as software development engineers in the fields of live streaming, travel, and e-payments. When companies cannot find relevant talent in northern Taiwan, they move to the middle or southern Taiwan to seek software talents like software development engineers, or they directly look for R&D supervisors in middle and southern Taiwan to lead the newly established teams.
From the perspective of the temporary labor market, affected by the Inflation Reduction Act signed by U.S. President Biden and the U.S./China trade war in Q3, some technology companies reduced or terminated recruitment due to declining customer demand, which is foreseen to last until Q4. However, the demand for temporary manpower in the software industry has continued unabated, and companies are more likely to hire candidates with five to ten years of relevant experience and willing to work three to six-month temporary contracts.
A glance at the talent market
There is an increasing demand for talent in human resource management, legal compliance, artificial intelligence and big data analysis, ESG, information security, service personnel and senior executives in food and beverage services and hospitality, semiconductor-related R&D, wafer manufacturing, equipment, firmware and hardware development talents, IT industry and software.
There is slowing demand for talent in administration and sales.
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