For government officials and anyone concerned about the development of Taiwan’s job market, May 2015 was a notable month. According to the Directorate-General of Budget, Accounting and Statistics, the overall unemployment rate dropped to 3.62 percent in May, which was the lowest level recorded in the nation for 15 years. The youth unemployment rate—which applies to those between the ages of 15 and 29—stood at 8.26 percent, a low not seen since May 2009. According to Premier Mao Chi-kuo (毛治國), “These numbers are the result of joint efforts made by citizens and the government, and indicate that the job market is continuing to improve.”
The premier’s comments came ahead of a Ministry of Labor (MOL) briefing last July on the progress of a project aimed at finding jobs for those who have recently graduated from university. The unemployment rate is traditionally low in May ahead of an influx of graduates into the job market in June, and despite a slight increase since the middle of 2015, the percentage of those seeking work each month has remained near the 15-year low. This is in part due to the significant steps that have been taken to alleviate youth joblessness, which stood at 10.76 percent in 2009, but averaged 8.57 percent in the first eight months of last year.
Though low compared to many nations around the world, Taiwan’s total unemployment rate still exceeds the 3 percent goal set by President Ma Ying-jeou (馬英九). In order to ameliorate the issue, the MOL is placing much of its focus on tackling youth joblessness. “Young people are important national assets. They’re crucial to ensuring that the country’s economy and society can continue to develop and innovate,” says Liu Chug-chun (劉佳鈞), director-general of the MOL’s Workforce Development Agency (WDA). “Those without jobs find it difficult to accumulate human and social capital and these consequences are especially harmful to young people.” That is why this segment of the population deserves extra attention, he adds.
The urgency to improve the local job market, especially for the younger generation, partially lies in the fact that Taiwan is fast losing its demographic dividend, economic benefits brought about by an advantageous population structure. According to the WDA, 2015 was a watershed year for Taiwan’s labor force, with the number of those able to work forecast to begin dwindling by at least 180,000 people annually. “Also, Taiwan’s youths are choosing to enter the job market at an older age than before,” Liu notes.
The director-general says that a government initiative launched in 1995 to encourage the establishment of universities is closely linked to the proportion of young people actively seeking work in Taiwan. Back in 1986, there were only 28 universities in the country. This number has since rocketed to 147. Many of these institutions are former vocational schools that upgraded to universities. Moreover, the past two decades have witnessed a drastic increase in the number of graduate schools. As young people continue to take advantage of this abundance of higher education options, they are delaying their entrance into the workforce.
There are distinct drawbacks to the country’s proliferation of universities. As more young people gain access to higher education, the value of degrees is reduced. Additionally, many institutions lack innovative course structures and fail to instill in their students the practical knowledge that employers seek in their prospective workers. One result of this is that in 2014 a large portion of 15 to 29-year-olds—64.5 percent, compared with 59 percent for the total workforce—had to settle for low-paying, low-skilled work in the service sector. “The problem is not as serious for graduates from top universities, but is worrying for those who went to other institutions of higher education, especially schools that were founded after 1995,” says Grace Tu (杜英儀), who co-published a research paper on the topic in November 2014 while working at the Chung-Hua Institution for Economic Research, a Taipei-based think tank established in 1981 to study economic and industry-related trends.
People attend a job fair in Taipei. In May 2015, Taiwan’s unemployment rate fell to 3.62 percent, its lowest level in 15 years. The government is now working to achieve the 3 percent goal set by President Ma Ying-jeou. (Photo by Central News Agency)
The MOL has launched various initiatives to better prepare young Taiwanese to enter the workforce. Since 2003, for example, the ministry has been subsidizing training programs in areas such as agricultural technology, business management and fashion design. The scheme requires participating institutions to bring in professionals from various industries to act as classroom mentors, and for instructors in each training program to select at least 15 students to complete internships at companies or organizations in related fields. Last year, 254 such programs at 80 facilities were subsidized by the MOL through this training initiative.
Formerly the Bureau of Employment and Vocational Training, the WDA is working to provide young people with the skill sets necessary to succeed in an era of rapid industrial and technological development. In 2012, for example, the agency began offering tuition subsidies totaling a maximum of NT$120,000 (US$3,870) per person to enable those aged 18 to 29 who are not currently enrolled in tertiary education to attend up to two years of MOL-accredited job training courses.
The education programs subsidized by the ministry are designed to help ensure the younger generation has the skill sets that employers increasingly require. A highly proficient workforce will in turn facilitate the advancement of local industries. “We’ve started to encourage schools to create courses that focus on the concept of Industry 4.0 because Taiwan has to move in that direction to ensure its economic competitiveness,” Liu says. Introduced at the Hannover Fair in Germany in 2011, the term Industry 4.0 refers to the so-called fourth industrial revolution, featuring concepts like the Internet of Things, big data and cloud computing.
The combination of advancements in workforce knowledge and industrial innovation is expected to lead to an increase in salaries. This is essential since earnings growth for employees in Taiwan has been lagging behind the rising consumer price index for years, says Sylvia Lin (林賢雅), public relations manager with 1111 Job Bank, one of the largest recruitment agencies in the nation. “Enterprises in Taiwan are willing to expand their horizons, but they won’t succeed without sufficient manpower,” she notes, adding that several forward-looking companies in the country have already started their own programs to enhance employee knowledge in big data and other promising areas.
Since 2007, the Ministry of Economic Affairs’ Industrial Development Bureau has been organizing seminars on industrial trends and the gaps between labor supply and demand, especially in crucial sectors such as petrochemicals and digital content design. Representatives from the selected industries—mostly human resources executives—attend the events, which are held once a year for each sector. The conclusions reached at the seminars are used to guide enterprises and schools that design on-the-job training and talent cultivation programs.
For its part, the National Development Council (NDC) is pushing for the evolution of a mature training industry. “Taiwan is relatively weak in terms of private sector training facilities. We have private centers where people can improve their odds of finding employment, but most of the courses either focus on computer skills or language proficiency,” says Lin Gyh-mei (林至美), deputy director of the NDC’s Department of Human Resources Development.
As part of the council’s efforts, it has teamed up with the Ministry of Education to encourage private universities to provide training programs. “As universities in Taiwan are facing ever-increasing pressure to recruit students, largely due to the declining birthrate, quite a few are thinking of shuttering their doors. We recommend that such institutions become professional training centers by offering specialized instruction in areas where they’re already strong,” Lin says. Thus far, four private universities around Taiwan have set up affiliate vocational training facilities.
Meanwhile, a system jointly developed by the government and private sector has been designed to help people find jobs that best suit their abilities. The result of the collaborative project is known as Occupational Competency Standards. According to Lin, the project, which was launched in April last year, gives instructors a system to aid them in designing training courses. Moreover, job seekers can assess their current skills and see what would be required for them to advance to a specific higher-level position. The NDC notes that the government has earmarked NT$240 million (US$7.7 million) for the research and establishment of competency requirements and training programs in 300 professional fields by 2017. As of last September, the criteria for 101 such occupations had been agreed and made public via the WDA’s website.
With the steps taken by the government, universities and private enterprises to improve Taiwan’s labor market, job seekers not only have a better chance of finding employment, but also of landing positions that suit their talents and abilities. “People are realizing that continuing education, or job training after formal education, is especially important today,” Tu says. “Industrial trends are changing fast. You have to learn new knowledge and skills to catch up, or you might find yourself ending up without a spot in the job market one day.”
Write to Oscar Chung at mhchung@mofa.gov.tw