Taiwan Today

The contribution of services to the ROC's gross national product (GNP) has remained at 43 percent or so for 25 years. This is very low in comparison with advanced countries, such as the United States, where the figure is generally in the neighborhood of 60 to 70 percent. Currently, the U.S. has approximately 76 million people working in services, while only 25 million are in industry and 3 million in agriculture. Of all the new American jobs created since the end of the last recession in 1982, nearly 85 percent have been in services.

There is general agreement among Taiwan's economic observers and businessmen that services are becoming increasingly important to the economy, and that this sector will eventually replace manufacturing as the primary motive force in economic development. But observers also hasten to point out that Taiwan's services are at present inadequate to meet the needs of continued growth in production and distribution. Moreover, a greater number of jobs in the service sector are needed to employ workers displaced by automation in industry. Services are perfect for this, since many people that are replaced by machines typically have only low-level skills and could be easily trained for service jobs.

The government has also placed greater emphasis on this area and is currently accelerating development of the service sector. For instance, those businesses that already specialize in services are being opened more widely to foreign investment. The Ministry of Economic Affairs is relaxing restrictions on the now of foreign capital into such areas as leasing, accounting, advertising, trading, law, construction, and retailing, among others. Along with foreign investment will come the skills and experience needed to upgrade services in Taiwan. With this strong boost, the Council for Economic Planning and Development estimates that services will provide more than half of all jobs in Taiwan by the year 2000.

But where will the people come from to fill those jobs? Workers in services as well as industry need certain skills, and the required training and experience takes time. This is an area that has been largely neglected in Taiwan. As a result, some observers even believe that local service standards are actually declining. Richard Matti, who recently resigned as general manager of Taipei's Asiaworld Plaza Hotel to expand the local office operations of his Honolulu based Hotel Consultants International, expresses a lament that has wider implications: "The attitude of the (hotel) staff is changing now. They're not as friendly toward foreigners as they used to be. They don't have that nice, smiling, hospitable face that they used to have in the old days. A lack of training is one of the reasons for this."

Scott W.K. Chen, operations training manager for McDonald's Taiwan, agrees that there is a problem. "The (restaurant) crews are not that good at friendly service. In the past the people here didn't have a service industry concept, so we put a lot of emphasis on service."

While the government began stressing vocational and technical training to meet the needs of the nation's industrial development years ago, only recently has it begun paying attention to service training. A 15-year economic development plan worked out by the government early last year pointedly places added emphasis on the service sector, and sets the annual growth target for this sector at 7.4 percent. This is significantly higher than the 6 percent annual growth planned for industry.

As part of the government effort to boost the development of services, the Employment & Vocational Training Administration of the Ministry of Interior has begun offering a limited number of related training programs lasting from one week to one year. The first period of this training, which was offered through colleges and universities, began in April 1986 and turned out 380 people with new skills in such areas as guest rooms management, Chinese cooking, bartending, and cake decorating. The second period started in September with an expanded curriculum and 500 trainees. The program will continue growing.

But this is a mere drop in the bucket as far as the need is concerned. With the government and educational institutions failing to provide enough training to supply the future need for waiters, bank clerks, cooks, hotel managers, store attendants, accountants, and other service personnel, who will step in to fill the vacuum? Most people agree that although more than 85 percent of the nation's service-oriented enterprises are too small to operate efficiently, let alone train their people properly, private enterprise itself will have to do the job. In fact there is no choice. Notes Abraham K. Folts, Training Center manager for Taipei's Lai Lai Sheraton Hotel, "This industry is changing fast, and training is very important. Owners are coming to realize this. If they can't catch up, they won't be able to survive in the industry. There is more and more pressure forcing them to change."

When it comes down to a choice between train or die, most companies will obviously choose the former. If they lack the capability of training their own people, they will contract training out to consulting or educational organizations. It is this private training that will shape the future of Taiwan's service industry, and thus the island's overall economic development.

A number of local companies, many of them with international connections, have begun intensive in-house training programs during the past few years. A case in point is McDonald's Taiwan, which came to the island about three years ago and brought with it a revelation in terms of good service, clean facilities, and sanitary food. McDonald's Taiwan now trains about 150 managers and 1,000 "crew members" (restaurant staff) per year. On-the-job training is heavily emphasized for all crew mem­bers. After watching video tapes that detail various food-service operations, each new employee begins practicing them under the watchful eye of an experienced worker.

Management people at McDonald's Taiwan are trained in all phases of the company's operations, culminating in a term at "Hamburger University" in Chicago. As they train, managers work their way up a series of steps to the highly competitive post of store manager. Training in individual stores is handle by area supervisors, one for every four stores. For every 20 stores there is a training consultant. Checking and rechecking of training activities is constant, and a training audit for each store is carried out once a month.

Some hotel operations have also placed increased emphasis on service training. The Lai Lai Sheraton, for example, is so concerned about the need for training its staff of 1,290 that its chairman quintupled the budget for this purpose in 1987 to US$455,000. The hotel trains ten to 15 trainers every year, so that now every department has its own. The training center conducts initial and follow-up classes, anti the trainers carry out on-the-job training during periods of slack business. The rank and file receive both skill and altitude training, supervisors have supervisory skill training, and mid-level managers undergo management training by college professors and industry professionals. People are also sent abroad every year for hotel management training.

All service jobs involve relationships with customers and clients, and these connections are particularly important in the life insurance business. Shinkong Life Insurance, one of the biggest Taiwan firms in the line, takes this fact so seriously that four years ago it purchased a former 112-room hotel in the Taipei suburb of Peitou for use as a training center. Here its 12,000 salespeople are trained to be agents, supervisors, and branch office managers. (A separate training center is maintained for desk workers at headquarters.) The trainees, up to 320 at a time, live in the center while being taught by experienced field specialists in such areas as marketing, management, and business promotion.

Initial training, however, is done in the branch offices. The first thing new recruits are taught is company loyalty, then professional insurance knowledge, and finally salesmanship skills. In general, each branch office has a trainer who himself has been subjected to six weeks of training. In the overall program, says C.Y. Wang, manager of Shinkong's Training and Education Department, "Attitude is most important—how to approach the clients, how to connect with them."

Instilling the proper attitude is a common challenge of all service industry training, and this is particularly true in Taiwan. Service jobs have sometimes been looked down on by Chinese who feel that it is undignified to serve other people. Some training, therefore, must be directed toward changing this viewpoint. Happily, the effort is reaping success. Shen Chun-fei, a McDonald's crew member who is a 4th-year night school student in business management at Tamkang University, demonstrates the switch in attitude that occurs after effective training: "I didn't understand what service was all about before; I didn't know how to serve customers. I fell, 'why should I treat a customer this way?' Now I feel that this is a natural part of our job. Before coming to work at McDonald's, I would have been embarrassed to work at cleaning chairs and tables, and serving. And I never would have cleaned a restroom before. But now when my college classmates come here and comment about how clean our bathroom is, it gives me a feeling of accomplishment. "

Abraham Folts of the Lai Lai Sheraton notes that training is different in Taiwan from other places, because both service personnel and their customers are different. This is especially obvious in the hotel business where many of the customers are foreigners. "Westerners have different habits," he explains. "For example, food for different diners at the same table should come at the same time—a custom that the Chinese don't have. Also, in Chinese custom there is no eye contact when ordering, whereas Westerners like it. Language is a problem too, since Taiwan is six or seven years behind other Asian countries in the study of foreign languages. Young people here come into contact with other forms of Western culture very late too, so its hard to train them."

Another difficulty is that many people in service jobs see them merely as temporary employment. Young men working for a fast-food outlet might be waiting for the call to go into the military, while the girls serving with them are waiting for marriage. This results, naturally, in a high rate of turnover. Moans Foils: "People here don't take service as a career. Traditionally, there was no future at all in hotel and restaurant service. I think this is starting to change now, but not very fast."

"To accelerate the change," Folts adds, "I plan to go to universities and technical schools to recruit people, to let them know what we can offer them. College graduates don't want to go into food and beverage jobs, and I'd like to give them a view of their future careers. Show them how far they can go; keep them in this industry."

The opportunity to advance is a major stabilizing factor in any kind of job, so McDonald's offers a ladder of success that stretches from the bottom to the top of the career pyramid. The possibilities are very clear to students like Shen: "This is a new business in Taiwan, and there's a lot of opportunity to advance. I'm studying management, which is related somewhat to the McDonald's operation, so I may stay here. After I graduate, the company may recommend me for promotion to a management position."

C. Y. Wang of Shinkong believes that the best way to keep people is to pay them well. "In motivating agents," he explains, "high income is most important. If they make a lot of money, they'll stay." Training agents in ways to increase their income, therefore, is a high priority for the company.

Training for the service industry is doubly important because it involves teaching people how to deal with others—how to interact with customers and colleagues alike—and also how to live effectively in society. Feng Kuo-en, who works part-time for McDonald's Taiwan while studying electronic engineering in a technical college, agrees: "When we were just students in school, we had little experience in society. Here we learn to relate to people, and this will be very useful to us even if we leave McDonald's. My mother says that even my disposition has improved a lot since I came to work here!"