I recently published an article titled, “101 reasons why Taiwan is the best place in the world to live”. Honestly, I was a bit surprised by the amount of negative feedback that it received. If you look through the comments section you will find a lot of Taiwanese people mentioning things like how dangerous the roads are, the air pollution, talent brain drain, stagnant wages, and how ugly a lot of the architecture is. While I do agree with these comments to an extent, I think the negative sentiment is an indication of something much bigger: namely that Taiwanese people tend to see their own country’s flaws much more easily than they see the highlights. Actually, I am betting that this article performs much better than the one previously mentioned because it points out several areas where Taiwan needs to improve. I’m going to talk about some challenges that Taiwan faces from a talent and market point of view. I might also offer some solutions if I can think of them, let’s see!
Brain Drain
Brain Drain refers to the phenomenon of top talent leaving the country to live and work abroad in what they consider to better market. Taiwan is certainly not the only country in the world to experience this, although we are unfortunately ranked at the very top of the list according to GlobalTalent from Oxford. The Taiwanese government calculated that around 7.2% of the workforce will leave Taiwan in search of better opportunities, most of these people going to China. This is obviously a major issue and something that needs to be tackled if we are to progress as an economy. One of the saddest realities of brain drain is that often the candidates who leave are amongst the very best in the market, they are the smartest and most desirable talent we have.
I have always thought of this issue as being a “small market mentality” problem. In most countries, the best talent will fluctuate towards the capital city of that country. The best jobs and wages are usually to be found in doing this. However, top performers from Taipei often see the Taiwan market as small scale compared to our neighbors. In most foreign companies, employees are confined to solely targeting the Taiwan local market. This means that when they compare revenue, wages, job scope, team size, etc. with their counterparts in Shanghai or Singapore, it is impossible not to feel a bit jealous. This often results in them choosing to leave Taiwan in search of something bigger and better.
I have to admit that COVID did change this a bit. I saw a lot of returnees from China and the US during this time period. Perhaps the “China brand” is less attractive than it once was. Yes, you can make more money working in Shanghai and Beijing, but you also have to compromise your integrity to an extent. I’m referring to recent troubling issues such as the Chinese government’s brutality in Xinjiang, their lack of compromise in Hong Kong, general lack of openness in terms of free speech, the internet, and journalism. However, Taiwanese talent will still make the move over to the mainland if it means doubling their salary and taking on a bigger career challenge. It is also difficult to argue that a move from Taiwan to Singapore is not an attractive option given the small country’s growing dominance in Asia.
I did mention that I was possibly going to offer some solutions to the problems I bring up, although I personally don’t see the brain drain from Taiwan stopping any time soon. When I speak to high-value talent in Taiwan, I am unable to honestly discourage them from moving abroad if that’s what they want. The reality is that it might be the best thing for their career, and I make an effort to always give my candidates honest and truthful advice. Having said that, maybe tackling some of the issues I raise in the next points could help a bit in making Taiwan a more competitive job market from an international talent point of view.
Stagnant Wages
If you look at Taiwan’s minimum wage increases since 1995 compared to many other countries, it is incredibly worrying. As an example, South Korea’s minimum wage increased by 7.2 times compared to only 1.7 in Taiwan. Stagnant wages are a common talking point in the business scene in Taiwan, and the data suggests this concern is not an exaggeration. As a headhunter in Taiwan, I have access to thousands of people’s salary details. I would argue that I haven’t really seen a notable increase in average salaries at the top end either. I mostly work with Manager and Director level candidates here, and although the average Manager title pays about 2 million NTD total annual salary, Director level 3 million, the Taiwan market seems to cap out at about 5 million NTD. I rarely see salary packages above this amount. Some of you might be reading this thinking, “are you kidding! 5 million NTD is a lot of money compared to Taiwan’s average monthly salary of 55,754 NTD.” You would be right of course, however these candidates could literally earn double this amount in Singapore, Shanghai, Seoul, Tokyo, Sydney, New York, etc. If Taiwan wishes to retain the best talent in the market, stagnant wages are a problem that needs to be addressed. This is especially true when you consider housing prices. How is the average Taiwanese person expected to buy a house when the average wage compared to the average house price is so out of reach that is it ridiculous?
Lack of Regional Roles
If you are not familiar with the operations of major multinational corporations, I can explain a bit. Basically, most foreign companies who expand into the Asian market will set up branch offices, usually in the capital cities of different countries. In almost all cases, the company will designate a “regional hub” which manages the entire region and is where most of the senior executives are based. I would say that Singapore is the most common choice in Asia, followed by Shanghai. Japan and Hong Kong are still the destination of choice for some companies although these days Hong Kong is losing the competitiveness it once had.
Taiwan is almost never chosen to be a multinational’s regional hub. Off the top of my head, I think Ørsted, Costco, and Bosch have their Asia HQ here, but I can’t think of many others (if you know any more examples please tell me in the comments, I wasn’t able to find this information online.) This means that if you are a top performer in Taiwan, climbing the career ladder often requires a move overseas. Of course, it is possible to work abroad to build up your career before moving back home, although I can tell you from experience that most of these candidates move back for family reasons as opposed to seeking to advance their careers. I have the unfortunate job of negotiating 50% pay cuts for this group when they choose to return to work in Taipei.
Another worrying trend that I’ve noticed is foreign companies lumping Taiwan into a larger shared market. Often Taiwan will be put into “Greater China” and have to report to the Shanghai office. Sometimes Hong Kong and Taiwan are put together, and sometimes South Korea as well. If you don’t understand the implication of this, let me explain a bit. When Taiwan gets thrown into a regional bundle in a re-org, this often means that the Taiwan team downsizes, often the most senior roles being cut first. If a foreign company chooses to remove its Taiwan General Manager position, it hurts the market as a whole and also seems to scare other C-Level professionals in the industry. In recent examples like Puma, Blizzard, Ocean Spray, and Ferrero, several senior employees were told to either move abroad to another office or lose their job.
Again, I’m not smart enough or qualified to offer solutions to this problem. However, I do know that countries like Holland and Ireland offer generous tax breaks to companies that set up regional offices there. I’ve mentioned Singapore a lot and I don’t want to come across as too much of a Singapore fanboy, but the government there has a reputation for moving quickly and efficiently to remove barriers to progress. Government ministers are super well paid (thus attracting more capable talent that would otherwise be sucked up by corporates) and are financially incentivized to improve the country’s GDP. Taiwan could certainly learn some lessons from the small but impressive island nation.
Taiwanese corporate culture in local firms
This is the problem in Taiwan that personally frustrates me the most. The truth is that if you ask the best Taiwanese candidates, “would you rather work for a Taiwanese or foreign company?” the answer will be foreign companies 95% of the time. This is also not an unjustified preference, there are several reasons why this is the case. The complaints I hear from candidates who have worked in these companies are always the same; top-down management style, bad and indirect internal communication, lower salaries coupled with lots of expected over-time, “boss is god” culture, manufacturing mentality, enshrined processes that are never adapted or changed, etc. It is a serious concern that the headquarters of these large Taiwanese companies are not able to attract the best Taiwanese candidates. This is true even considering that Taiwanese companies offer the opportunity to handle the international market, something that is valued very highly by professionals who wish to be responsible for more than just the local Taiwan market and consumers.
I have a mix of Taiwanese and foreign clients, so I have had the chance to compare working cultures in different companies for several years. I have had some very positive experiences helping local Taiwanese companies recruit talent, but unfortunately, I’ve also had several frustrating battles with local HR and line managers. I can give you a recent example, obviously without naming the company in question. A big Taiwanese client of mine asks candidates to fill out an application form that asks them what their parents did for their jobs. This is not only unnecessary but wildly anachronistic. I’ve asked them to remove this and was met with the reply of, “this is just our policy”, something that will sound familiar to those of you who understand the kind of mentality I’m talking about. Some application forms require pictures, height, weight, and marital status, etc. For anyone familiar with labor law in the West, these practices come across as offensive and outdated.
This same client also asked my American candidate to take an English test, just because every applicant must go through the same process, even if that process makes no sense in this case. I personally felt this was a bit insulting as my candidate is a native English speaker, but again I wasn’t listened to. A recent email I wrote to them said, “Ok. Understood that you don’t want to listen to my advice. I will keep my opinions to myself from now on.” I have had many similarly frustrating experiences. As another example, large local Taiwanese companies are the most likely to “follow labor law” with regard to the annual leave policy. This often means that employees in foreign companies get 22+ paid annual leave per year compared to 3 days annual leave in a Taiwanese company. It astounds me that companies don’t research their competitor’s policies and match them to be more competitive. Do these companies think senior candidates are going to willingly sacrifice two weeks of extra holiday when changing jobs?
It is a dream of mine to get to a level of seniority in Taiwan where I am respected enough for Taiwanese companies to start adapting policy according to the advice I give them. I legitimately want to help them improve and become able to attract the best and the brightest. To do this, they need to start studying other successful companies and learning the best policies from them as opposed to living in their own bubble.
Government bureaucracy
Over the years I have had the pleasure of working with a number of Fintech companies in Taiwan. When I asked them about their biggest challenge, the answer was always “the government”. These clients argued that Taiwan’s old and outdated regulations and regulatory body made it very difficult to operate in the market here. They were constantly having to find workarounds that let them do business. I personally think that the Taiwanese government is generally laudable. However, I think it is a fair accusation to call the government slow and traditional.
Another example can be found in an article written by Kim Asher called A Tale of Two Taiwans, which gives an in-depth account of all the unnecessary problems faced by the wind energy industry. She said that Taiwanese bureaucracy makes it harder to operate here than in places like Nigeria, Angola, and The Congo. A strong government should do its best to quickly remove obstacles that impede progress or update laws that no longer make logical sense.
It seems like outdated laws here often just remain in place rather than modernize and adapt. I can think of two more examples that have affected me personally. Did you know it is illegal in Taiwan for foreigners to teach in kindergarten? Despite this, thousands of foreign teachers work in this industry. If the school is reported to the government, the police will raid the school with video cameras, forcing ridiculous situations like the foreign teachers having to hide in toilets or on the rooftop. A good friend of mine was deported from Taiwan for 5 years for teaching in a kindergarten. How many prominent business people and politicians have their kids in bilingual schools? It would make much more sense to get rid of this law, rather than irregularly enforce it only once a school is reported. I also play a lot of music here, which is a deportable offense if you don’t have a specific license to play that specific show in that specific venue. Another racist and protectionist law that benefits absolutely no one in 2022.
Unable to attract the best foreign talent
Of course, the majority of this article has focused on Taiwanese talent, it makes sense that this group of professionals is the most important factor in Taiwan’s economy. However, most successful countries manage to attract a significant amount of expatriate professionals who also add to growth and development. Taiwan does attract quite a lot of foreigners, and uniquely, a lot of foreigners make Taiwan their permanent home (like myself). However, the job market for foreign talent in Taiwan is reasonably limited. I spend quite a lot of time writing articles and giving advice to foreign professionals wishing to have a career here, although the reality is that most companies in Taiwan are unwilling to hire foreign talent, many don’t even consider it. If Taiwan wishes to internationalize, it needs to put some effort into attracting and keeping talented ex-pats.
I recently heard a Taiwanese professor talking about foreign students in Taiwan and how the vast majority of them leave after they complete their degrees. I’m sure that a lot of these post-grads would love to stay and work in Taiwan, although obviously, they are finding it difficult to start a career here. At the very senior level, are Taiwanese companies poaching top talent from abroad in the same way China attracts a lot of our best people? I haven’t seen many examples of this happening outside maybe ViewSonic and Gogoro, who hired some strong profiles from overseas markets.
HTC recently had a pretty dramatic failure, hiring a senior French executive from overseas to be their CEO. I’ve heard from several reliable sources that Yves Maitre is an incredibly impressive professional, yet he and the team he brought with him are now all gone. I’m not really at liberty to share the reasons for this failure, but I would argue it is a troubling indication of a much larger problem; that large Taiwanese companies and their owners are often inflexible to change.
I also met a recruiter from Foxconn four years ago whose job was to attract some “tier A” foreign talent into the company from places like Apple and Harvard. He said that it was very challenging, Foxconn wanted foreigners who spoke fluent Mandarin and were reluctant to pay the salaries to compete for this type of unicorn. It goes without saying that if you are unwilling to pay the big bucks, there is absolutely no reason serious talent from Silicon Valley is going to consider a move here. Let alone whether or not someone from California would be happy or willing to adjust to the Taiwanese working culture that I described in my previous points.
Generally conservative business practices
I’ve alluded to this point a little bit in the preceding paragraphs. There seems to be an overall issue with willingness to adapt and change within Taiwanese companies. Flexibility in a modern capitalist economy is a pivotal factor in success. I’ve found many examples of “this is the way we do things” attitude in Taiwan. Basically, this means that companies would rather stick with what they know, even if the strategy/process/product could be streamlined or made more efficient. I would argue that this is one of the key differences I noted during my time working in Shanghai. Chinese businesses are willing to gamble on high-growth strategies, putting investment into high-risk/high-reward decisions that partly explain why the Chinese economy is predicted to become the world’s largest within the next few decades.
I would argue that Taiwan needs to become a little more open and less conservative if it wishes to improve. There are certainly some positive examples to point to, TSMC are doing fantastically well and newer companies like Vpon, Appier, and iKala seem to be on the right track. Let’s hope this continues and we see a new generation of Taiwanese firms that buck the “manufacturing mentality” criticism.
I sincerely hope that this article didn’t come across as too negative. I want to be very clear that my criticisms are intended to be constructive. I want to help Taiwan improve in any way I can, even just doing my small part. I love Taiwan, it is my home and I am incredibly happy here. Jia you Taiwan!
*For the Chinese version please check: 外籍獵頭看台灣就業市場：想留住「國際級人才」，必須面臨的 7 大挑戰
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