Bonuses at foreign companies down from previous year

The gap in employee bonus packages between local firms and foreign companies in Taiwan narrowed because of a sluggish economy last year, a survey conducted by 1111 Job Bank (1111人力銀行) showed.

Only 76 percent of foreign company employees will have received a yearly bonus by Lunar New Year, when employers show their appreciation for employees' hard work with cash rewards.

Annual bonuses of foreign companies surveyed by 1111 averaged NT$66,490 (US$2,000), about 1.8 times the average monthly wage -- lower than the two-month wage bonus often guaranteed by local companies.

"The steady drop from last year's 2.02 month and the 3.7 month average in 2006 was largely due to weak earnings performance," 1111 Job Bank chief operating officer Ryan Wu (吳睿穎) said.

"We are seeing further localization among foreign companies in terms of employee benefit packages in Taiwan. They are replacing fat bonus schemes for every employee with cash rewards based on individual performance," Wu said.

Although firms such as Intertek Testing Services Taiwan Ltd (全國公證檢驗股份有限公司) saw flat earnings last year because of the US slowdown and weak demand from local clients, there were also exceptions.

Alison Tung (童皓怡), vice president of the human resources department at insurance company CIGNA International (康健人壽) said employees in the banking and insurance sectors were receiving bigger bonuses this year over better earnings last year.

"The reason behind the earnings growth was a lower base in 2006, when banks were hard hit by bad loans resulting from credit card and cash card debt defaults," Tung said.

"In addition, the implementation of new pension schemes also sparked a growth in insurance policies," Tung said. "People feel they cannot rely on the government for their retirement and have elected to plan their own annuity or pension through insurance policies."

Despite slimmer bonus packages at foreign companies this year, employees still said they would continue to rate foreign companies as the best employers, 1111 Job Bank said.

1111 Job Bank interviewed 619 foreign company employees for the survey. IT industry employees were the highest paid, with bonuses 29.78 percent higher than the overall average.