2023 - Q2 Job Market Report
Labor Market Summary
Affected by global inflation from the second half of 2022, the technology industry has faced a cold winter of slowing market demand. Since the fourth quarter of last year, due to the expectation of the global economy entering a recession in 2023, many US technology giants have reversed the trend of rapid growth and vigorous recruitment over the years, by announcing a hiring freeze, followed by waves of layoffs, such as the Google’s parent company Alphabet announcing the dismissal of about 12,000 employees, who account for more than 6% of its total manpower globally. The world-leading e-commerce company, Amazon, also announced the layoff of 18,000 employees. In January 2023 alone, the total number of redundancies in the US technology industry exceeded 100,000.
A similar situation caused by the global economic slowdown also happened in Taiwan, whose labor market experienced fluctuations. Taking the technology industry as an example, the number of job vacancies in the first quarter of this year is a huge 70% less than that of the same period last year; compared with the number in the fourth quarter of 2022, it is about 50% less. According to predictions in/based on the “Adecco Taiwan Salary Guide 2023,” the overall labor market in 2023 will be different from the trend of mass recruitment at the beginning of 2022; it will enter a stage of steady talent acquisition and review of human resources and allocation.
In order to face the long-term economic slowdown, various industries have responded by freezing manpower recruitment, reducing the number of recruits, or cutting wages. For example, consumer medicine and health care-related foreign enterprises have begun to reduce their labor force last year, and there was a more obvious hiring freeze in the first quarter of this year. In the software industry, it is becoming the general situation to review human resources and adjust excess workforce. Even some foreign SaaS (Software as a Service) companies are directly withdrawing from Taiwan. In addition, as the consumption of electronic products declines and consumers are shifting to physical retailers, e-commerce companies have also experienced layoffs and frozen recruitment, which are expected to continue into the second quarter.
However, at the same time, companies are actively retaining key talents and are trying their best to recruit high-level R&D talents in the technology industry, such as algorithm engineers, data scientists, software architects, and so on. Taiwan’s biotechnology industry is still urgently hiring international R&D talents, while the retail, service, and catering industries are still looking for front-line service personnel, who are in short supply in the talent market.
Technology applications and temporary manpower are becoming the solution to the imbalance between workforce supply and demand
With the easing of COVID-19 restrictions, the retail and catering businesses are booming. The number of job openings in the first quarter of this year has increased by 30% compared with the fourth quarter of 2022. However, there is a general shortage of manpower. Even if salaries are raised, firms may not be able to achieve sufficient labor replenishment and reduce the talent gaps. Therefore, the industry has adopted technologies to optimize part of the operation process, such as the extensive application of e-commerce models, online ordering, self-service plate recycling, etc., to solve the long-term shortage of workers.
The development of technology applications in the retail industry is gradually flourishing At present, most of the job openings released by retailers focus on “Retail Tech”; this means increasing the demand for technology integration talents related to the retail industry, such as big data, ERP (Enterprise Resource Planning) system renewal, digital transformation, etc. With the help of data architects, various information tracks such as member information, purchasing records, and regional differences accumulated in the past, can be consolidated and managed, and the introduction of AI can optimize the allocation of talents and manpower. Once this mechanism is implemented, many fixed labor positions may be replaced by AI-based systems such as automated checkout systems, logistics distribution systems, and customer service systems. For example, if the currently popular ChatGPT matures in the next three to five years, it will bring a cross-age revolution to the logistics operation of the retail industry.
Faced with the long-term shortage of talents and the forecast of continued economic slowdown, the biotechnology industry is filling the manpower gap by hiring temporary workers. When the economic outlook is clearer, full-time vacancies will be released, and temporary employees will be converted into regular employees. At the same time, the biotechnology industry is also improving its operation process through AI technologies, and accelerating the speed of research and development (R&D) with modular algorithms. Therefore, the talents in demand have changed from the original R&D area to a new type: recruits who can apply technology, work with the software developers, and have biotechnology-related backgrounds. This change in job openings has also prompted the biotechnology industry to actively seek relevant talents from other industries.
Enterprises’ global rearrangement and the China–US trade war are promoting the movement of international talents
With the aim of reducing labor costs, many foreign companies have chosen to streamline their R&D staff in Europe and the United States, and to transfer their manpower needs to Taiwan. In addition, from the third quarter of last year, the China–US trade war has prompted some companies to start moving to Southeast Asia. Although the relocation trend may slow down due to lower-than-expected profits, enterprises will continue to transfer manufacturing and business teams to Southeast Asian countries, such as Thailand and Malaysia, in order to reduce operational risks.
The movement of international talents also began to recover after the epidemic. Taking the biotechnology industry as an example, some international talents have returned to China for development, or Southeast Asian countries have begun to seek medical talents from Taiwan. In order for Taiwanese companies to retain international talents, they must be internationally competitive in terms of salary levels.
The digital transformation of enterprises pushes the demand for digitalization talents, to increase their competitiveness
With a gloomy economic outlook, not only has the number of industry recruits decreased, slowed down, or stagnated, but the tendency of changing jobs after the Lunar New Year, which was common in previous years, has significantly decreased in 2023. The in-service talents tend to be conservative and less active in job hunting. However, talents related to AI and digital transformation are still favored by enterprises. For example, the biotechnology industry recruits software talents to apply algorithms, which can speed up the research and development process. Since retailers are responding to the trend of consumers shifting from online to offline channels, there is an urgent need for talents with relevant experience in OMO (online-merge-offline).
Both technology talents and the soft power of cross-field talents are in demand
The application of AI technology solves some of the problems of the manpower shortage, but at the same time allows workers to focus more on interacting with customers, which makes the soft power of job seekers the key to success. For example, AI can assist medical professionals in diagnosis and treatment, tracking physical conditions in series, using medication, and so on. Ultimately, AI still needs to maintain the essence of the relationship between doctors and patients. Thanks to AI’s assistance in health education and for tracking medication, doctors can have more time to care about patients’ mental wellbeing.
With consumers returning to physical channels, the recruitment of digital marketing talents in the e-commerce segment, which was popular in the past, has slowed down; however, the demand for sales managers persists, and the focus will be on the reform of channel operations and sales conversion performance. The data analysis talents needed by the retail industry have to be able to analyze data and understand the industry’s operation, as this is a function that existing talents lack.
In the software industry, engineering-related jobs continue to be offered, but at present, most of the talents are waiting to see changes in the market situation. Also, the number of openings is not as large as before. However, as the current number of job vacancies is now smaller, employers are reviewing the qualifications of each job applicant more rigorously. Enterprises expect talents not only to have professional skills, but also to have English skills, communication skills, and other soft skills at a certain level. Especially when multiple talents meet the requirement of professional abilities, these soft power capabilities will be the key to gaining the positions.
To deal with economic stagnation in Q2, “embracing technology” will become the key to transformation
Adecco Taiwan predicts that Taiwan’s information technology and software industries will remain conservative in the second quarter, while the livelihood-related retail and catering segments will continue to thrive. The obvious demand for talent recruitment includes R&D engineers, data analysts, digital transformation talents, and front-line sales personnel. By contrast, the demand for manufacturing, quality control, and capacity planning will slow down.
According to the research of OECD Skills for Jobs 2022, across OECD countries, on average one-third of the workforce’s skills are mismatched to the job requirements, and more than 10% of the workforce is under-qualified. Adecco GPA pointed out that under the continuous transformation of the global society, economy, and labor market, this shows that workers of all ages need continuous upgrading and retraining of their skills.
Therefore, Adecco recommends that job seekers adopt the mindset of “embracing technology,” and always keep an open attitude toward new technologies and learning. At the same time, the job seekers need to cultivate cross-field capabilities and soft power.
Regarding the enterprise side, Adecco suggests building up the “people-oriented” company culture, as it is more efficient to cultivate talents internally than to find them externally. Paying attention to corporate culture and starting by training talents is a necessary investment. Meanwhile, enterprises should also keep up with the pace of digitalization. By introducing technology to review human resources and adjust job openings, organizations and talents can be upgraded in place to enhance their competitiveness.