Indian Ish Kumar has been working for the Taiwan office of the US semiconductor company Integrated Silicon Solution Inc. (ISSI) as a senior firmware designer for nearly two years. He likes his job, saying it keeps him abreast of new ideas in the electronics industry. "Taiwan has a good name in electronics, so I came here to keep up with technology and know-how," he says. "I believe my work experience in Taiwan will give me a better position in the job market back home."
When his two-year contract with ISSI expires, Kumar plans to join another international firm, which has branches in Hong Kong, Japan, Taiwan and Holland. "At the moment, I'm not sure where my next stop will be, but I plan to get three to five years of work experience before I go home and settle down."
In an era of globalization, the flow of people has become increasingly fluid as a result of the international division of production and labor. Ambitious people like Kumar have taken the initiative to find jobs abroad to enhance their professional experience and future employability.
"The world today is like a village thanks to the availability of efficient communication and transportation that shortens the distance between nations," he continues. "It's good to know different cultures and what and how work is done in other parts of the world. These contacts and understanding will broaden one's horizons and thinking. Workers with overseas experience are welcomed by businesses around the globe."
Let It Flow
The relatively free flow of employees across borders tests host nations' ability to provide the educational resources required to keep their labor competitive. For Taiwan, a country with a high reputation in the electronics industry, the same is true. "Compared to a decade ago, the overall quality of Taiwanese university graduates is now inferior. This is partly due to the much easier university-entrance examinations. High employee turnover is also a pain for many businesses," says Belle Lin, director of Pro-Enhance International Services Inc. "Unlike local workers, most foreigners here are on contracts--that, at least, ensures stable productivity for the set term."
Pro-Enhance is a manpower recruitment company. In 1992, the Employment Services Act allowed such businesses to bring in foreign laborers from Southeast Asia to meet the needs of manufacturers for blue-collar workers. The recruiters fared well in the 1990s, but less so in the early 2000s due to the government's ever-changing foreign labor policy.
Lin realized that her company had to expand its scope beyond the blue-collar workers for electronics companies located in the Hsinchu Science Park (HSP) that had become her niche if it was to maintain growth momentum. Noticing that electronics companies were reporting talent shortages in the fields of engineering and management, she saw the potential of contracting white-collar workers from abroad.
In her view, recruiting from China would be ideal, given common cultural and linguistic background but, due to government restrictions on PRC nationals, she set her sights on India, where English and mathematics skills are of a high standard. In mid-2004, after finding a suitably experienced Indian human resources partner, Lin started to broker contracts on engineers from India. So far she has arranged contracts for in excess of 100 workers, and Kumar is among them.
Another recruiter, Champions Manpower Services Co., started bringing in foreign technicians, mainly from the Philippines, in 2000. Humane Wu, vice general-manager of Champions, explains that US-based Texas Instruments Inc. and Amkor Technology Inc. have been operating integrated circuit assembly lines in the Philippines for several years and have thus cultivated a talent pool that Taiwan can draw from. Bringing in foreign professionals, however, is a tough task for domestic recruiters due to their lack of connections with their counterparts abroad. Wu explains that his firm also targets the Philippines because it has a close partnership with a Filipino counterpart, built up over years of importing blue-collar workers.
Swing Low
Although the last decade or so has witnessed a proliferation of tertiary education institutions in Taiwan, a high portion of these are focused on the arts, business and law. Consequently the number of engineering graduates, electrical or otherwise, has failed to satisfy the needs of the high-tech sector. Such a situation is unlikely to be resolved in the short term due to a shortage of teaching staff and the long time it takes to affect any change in education systems.
Figures from the Directorate General of Budget, Accounting and Statistics (DGBAS) for 2005 show that the island's science parks were short 9,875 workers, hitting a new high. Among them, 5,722 vacancies were for electrical engineers and 2,899 for mechanical engineers. DGBAS statistics also show that the unemployment rate of Taiwanese graduates rose to 4.23 percent in 2005 from 2.38 percent in 1994. Average monthly salaries for experienced professionals with university degrees decreased from NT$51,375 (US$1,566) in 2000 to NT$46,362 (US$1,413) in 2005, while those who did not have professional skills or licenses survived on NT$20,000 (US$610) a month.
Lan Ke-jeng, associate professor in the Department of Labor Relations at National Chung Cheng University, says that there are too many universities in Taiwan, which drag down the overall quality of education, and that today's pluralistic society seems to distract students from their studies.
"A lot of Taiwanese university graduates are actually only at the high school level, and their English proficiency is generally inadequate. They're reluctant to take certain types of jobs, complaining that they're too arduous or boring," he says. "This partly explains why companies can't find people who are qualified or willing to do the kinds of jobs they have and why they need to employ foreign workers."
By November 2006, the number of work permits issued to foreign professionals by the Bureau of Employment and Vocational Training (BEVT) under the Council of Labor Affairs (CLA) totaled 29,592, or less than 10 percent of the island's entire foreign work force. Lan points out that it is getting difficult for Taiwan to lure talent from the United States, Europe and Japan since many countries are competing to recruit potential employees with lucrative incentives. Pro-Enhance's Lin agrees.
"For highly skilled people who want to work overseas, America and Europe are usually their first choices--Taiwan is often their springboard," she says. "Talent from the best schools mostly get hired by industrial giants like Microsoft before they graduate."
Lan and Lin both think that Taiwan in general does not provide a living environment which provides enough convenience and comfort to foreigners. One example is that English communication is largely limited to the capital, Taipei. Kumar says that, by and large, he enjoys living here--local people are friendly and helpful, and the island is beautiful, well developed and safe to walk around late at night. The only problems are language and food: English information is limited outside Taipei, and the range of Indian food is slim.
Champions Manpower Services Co. sources both white- and blue-collar workers from the Philippines. (Photo by Huang Chung-hsin)
Additionally, Champions' Wu says that the government has exercised stricter screening of workers from Southeast Asia than of those from the US or Europe, maintaining that those countries lag behind Taiwan industrially. "The academic and work certificates of Southeast Asians need to be endorsed first by their own official education and labor agencies before being reviewed and certified by our overseas representative offices," he says. "In general, work permits for Southeast Asians take three to six months to get approved, while for Americans and Europeans, they take less than three."
Wu and Lin both say that the government's minimum monthly salary for foreign professionals of NT$47,971 (US$1,463) has discouraged some firms from hiring, adding that one could hire an engineer from Southeast Asia for NT$35,000 (US$1,067). They think that salary terms should be negotiated by parties to contracts, rather than micro-managed to such an extent by the government. They both conclude that the overall situation in Taiwan leaves their promotion of foreign talent recruitment below expectations, and, for the time being, such services account for less than 5 percent of the manpower supply businesses.
The Broad Horizon
While a country's attitude toward the free flow of foreign labor into its territory may have been thought to qualify it for membership in the mythical global village, according to a report released by the Organization for Economic Cooperation and Development in 2001, despite their economic success, Asian countries generally still have relatively low numbers of foreign professionals in their work forces. Those with the most working foreigners are Canada, Austria, Belgium and the US, in that order.
To facilitate the recruitment of foreign workers into Taiwan, BEVT set up a one-stop service center in January 2004 to process applications for work permits and standardized screening rules in order to shorten the procedure. It also addresses the likely consequences of foreign labor on local employees. "We intend to lure high-end talent from other countries to help improve our technological level. This talent is neither meant to complement nor substitute [locals], to be sure," explains Chung Lin-hui, planning director at BEVT. "So, we don't think the migration of the highly skilled will have a significant impact on the domestic job market."
Nevertheless, to prevent recruiters from importing blue-collar workers in the guise of specialists and technicians, Chung says the agency regulates salaries. This move is also designed to protect opportunities for locals by deterring employers from using lower-paid foreigners to replace Taiwanese. The NT$47,971-threshold, she continues, basically corresponds to the average salaries earned by Taiwanese professionals and thus does not create a barrier to employers wanting to bring in specialists from abroad. According to BEVT statistics, on average foreigners engaged in specialized or technical work in Taiwan earn NT$122,841 (US$3,745) a month. In defense of the bureau's apparent lethargy, she says that it acts with greater caution when reviewing qualifications of applicants from Southeast Asia because it has discovered several cases of fraud. While the CLA, for its part, has relaxed its review criteria and adopts a more flexible approach to the recruitment of skilled foreign workers.
In principle, for instance, foreign professionals must be university graduates with two years' work experience or hold a post-graduate degree to be eligible to work in Taiwan. But certain specialists, needed by Taiwanese companies, have been exempted from these provisions, and their applications are reviewed on a case-by-case basis. In addition, the paid-in capital necessary for local employers to hire abroad was reduced by half to NT$5 million (US$152,439) last year.
"While addressing corporate needs, the government is also obligated to protect the rights of Taiwanese employees," Chung says. "Plus, the imposition of certain thresholds on the migration of foreign human capital is universal, and there has to be some distinction between recruiting white- and blue-collar workers."
Lan of National Chung Cheng University thinks that the phenomenon of Southeast Asian blue- and white-collar workers in Taiwan may be problematic. "After living here for seven years, these white-collar workers can apply for permanent residence," he says. "Then their relatives, who may be blue-collar, can do the same. The number of these people will be hard to control, and that's a problem to look out for."
Overall, Lan believes that government 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, and there is no quota imposed on the number of foreign white-collar workers allowed in the country. Despite conflicts caused by cultural, language and remuneration differences between local and foreign employees, Lan believes that the migration of foreign professionals, particularly highly skilled ones, can lift Taiwan's technological level and broaden the world view of both immigrants and hosts.
Amid international competition for skilled personnel, Taiwan has to take more aggressive action. Lan thinks the government should provide incentives, such as tax breaks and wage subsidies for companies that hire abroad, and relax the regulations for permanent residence. To do so, it needs to integrate the agencies regulating foreign white-collar workers and immigration.
"To enhance Taiwan's international competitiveness, the Ministry of Finance is studying the feasibility of making concerted tax reductions by referring to tax rates levied by neighboring countries like Hong Kong, Japan, Singapore and South Korea," says Hu Sheng-cheng, former chairman of the Council for Economic Planning and Development. In addition, the number of men performing alternative military service, in this case working in high-tech companies, is to be increased once the relevant amendments receive legislative approval.
The National Immigration Agency (NIA) was established under the Ministry of the Interior in January 2007. Deputy Director Steve Wu says the NIA will facilitate the migration of highly skilled people into Taiwan by streamlining the entry procedure and helping immigrants adapt themselves to Taiwanese society.
"Our immigration policy is to lure as much quality talent from overseas as possible, while eliminating illegals," Wu says. "We'll formulate more incentives and loosen the regulations for visa and permanent residence applications for foreign professionals and investors."
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. "We'd like to lay out a welcome mat for skilled immigrants that can contribute to our national development and inspire new thinking, making our society more diversified and interesting," he says.
Write to Kelly Her at kelly@mail.gio.gov.tw