The Transmigration of Souls

This article was written by Kelly Her and published by the Taiwan Review on April 1, 2007. It reports that Taiwan is facing a drought in its home talent pool, so that the nation is now looking abroad to slake the thirst of the electronics industry.

In today's increasingly globalized world, ambitious people are taking the initiative to find jobs overseas in order to enhance their professional experience and future employability. As the distance between nations are continuously being shorten by the availability of efficient communication and transportation, people seek to broaden their horizons and thinking by building up contacts with different cultures and peoples. Workers with overseas experience are always welcomed by businesses around the globe.

Such relatively free flow of employees across borders is testing the ability of host nations to provide adequate educational resources required to keep their labor competitive. This is particularly true for Taiwan, a nation with a high reputation in the electronics industry.

In 1992, the Employment Services Act allowed Taiwan's recruitment companies to bring in foreign laborers from Southeast Asia to meet the needs of manufacturers for blue-collar workers. Since then, such companies have expanded their services in order to cater for Taiwan's numerous electronics companies that have been reporting talent shortages in the fields of engineering and management. According to this article, recruiting from China would be ideal, given the common cultural and linguistic background shared by Chinese and Taiwanese workers. However, because of the government's restrictions on PRC nationals, many recruitment companies set their sights on India, where English and mathematics skills are of a high standard. Other recruitment companies are bringing in foreign technicians from the Philippines.

Taiwan currently faces a shortage of engineering graduates. Government statistics show that in 2005, Taiwan's science parks were short of 9,875 workers. Among them, 5,722 vacancies were for electrical engineers and 2,899 for mechanical engineers. Meanwhile, government statistics show that also in 2005, the employment rate of Taiwanese graduates rose to 4.23 percent, from 2.38 percent in 1994. Average monthly salaries for experienced professionals with university degrees decreased to NT$46,362 (US$1,413) in 2005, from NT$51,375 (US$1,566) in 2000. Those who did not have professional skills or licenses simply received about NT$20,000 (US$610) per month.

By November 2006, the number of work permits issued to foreign professionals by the Bureau of Employment and Vocational Training under the Council of Labor Affairs reached 29,592, or less tan 10 percent of Taiwan's entire foreign work force. According to this article, it is getting increasingly difficult for Taiwan to lure talent from the United States, Europe and Japan because many countries are competing to recruit potential employees with lucrative incentives.

Some experts argue that Taiwan in general does not provide a living environment that provides enough convenience and comfort to foreigners. For example, English communication and international food are relatively limited outside of Taipei, the capital. Furthermore, the government has exercised stricter screening of workers from Southeast Asia than of those from the United States or Europe. Finally, the government's minimum monthly salary for foreign professionals of NT$47,971 (US$1,463) has discouraged some companies from hiring foreign professionals, since any company can easily hire an engineer from Southeast Asia for NT$35,000 (US$1,067). Most foreign professionals expect to negotiate salaries and other employment conditions via contracts, instead of by government.

Currently, the promotion of foreign talent recruitment in Taiwan is below expectations. Such services so far account for less than 5 percent of the nation's manpower supply businesses. Indeed, according to a report released by the Organization for Economic Cooperation and Development in 2001, Asian countries in general still have relatively low numbers of foreign professionals in their work forces. Those with the most working foreigners are Canada, Austria, Belgium and the United States, in that order.

In order to facilitate the recruitment of foreign workers into Taiwan, the Bureau of Employment and Vocational Training under the Council of Labor Affairs set up a service center in 2004 to process applications for work permits and standardized screening rules. The bureau also addresses the likely consequences of foreign labor on local employees. In general, the government does not think the migration of the highly skilled will have a significant impact on the domestic job market.

Nonetheless, in order to prevent recruiters from importing blue-collar workers in the guise of specialists and technicians, the government regulates salaries. This move is also designed to protect opportunities for locals by deterring employers from using lower-paid foreigners to replace Taiwanese. The aforementioned NT$47,971 threshold basically corresponds to the average salaries earned by Taiwanese professionals. Therefore, it does not create a barrier to employers who want to bring in specialists from abroad. Government statistics show that on average, foreigners engaged in specialized or technical work in Taiwan earn NT$122,841 (US$3,745) per months In recent years, the Council of Labor Affairs has also relaxed its review criteria and adopted a more flexible approach to the recruitment of skilled foreign workers.

According to this article, Taiwan's policy for recruiting foreign white-collar workers has been a lot looser than that for blue-collar workers. For instance, work permits granted to foreign professionals are initially valid for three years, and they can apply for an unlimited number of extensions. They can also be hired by two employers simultaneously and are free to change employers. At the same time, employers are not required to publicly post advertisements for local workers first, as they are for blue-collar workers. Furthermore, there is no quota imposed on the number of foreign white-collar workers allowed in Taiwan. As mentioned before, it is generally believed that the migration of highly skilled foreign professionals can lift Taiwan's technological level and broaden the worldview of immigrants and hosts.

Meanwhile, Taiwan needs to take more aggressive action to attract foreign professionals. The government should provide incentives, such as tax breaks and wage subsidies for companies that hire foreign professionals. Regulations for permanent residence can also be relaxed. Indeed, the government needs to integrate its agencies and set up better regulations over immigration and the employment of foreign white-collar workers. The National Immigration Agency, set up in January 2007, will facilitate the migration of highly skilled people into Taiwan by streamlining the entry procedure and by helping immigrants adapt themselves into Taiwanese society. Specifically, the agency plans to extend the validity of alien resident certificates from the current one to three years to five years, and to reduce the required residence period for applying to become Taiwanese citizens from the current seven to two to six years.