With Beijing tightening the noose around Taiwan’s neck, exacerbating the nation’s brain drain problem by poaching engineers and other professionals, business leaders need to take a long, hard look at themselves.
Blinded by greed and a lack of foresight, they are responsible for creating a broken corporate culture that is slowly destroying the nation’s economy more effectively than Beijing ever could.
Most Taiwanese businesses have for decades beaten a dead horse, pursuing an inept business model that has relied on a plentiful supply of labor to artificially suppress salaries. This allowed firms to lazily compete on cost alone, instead of innovating and investing in personnel. Average wages have stagnated since the late 1990s, even though the nation’s economy has often been booming.
The problem runs deeper than low salaries. The majority of bosses run their companies like emperors, with many requiring employees to sign illegal contracts — or do not provide a contract at all — and perpetuate a culture of regular, unpaid overtime.
Human resource departments are also generally useless. In most offices, there is no defined career structure and no staff training, except for the bare minimum needed for the job.
As a result, most companies have high turnover and suffer from the resultant loss of experience. Most Taiwanese companies are decades behind their Western counterparts, which long ago discovered that it pays to retain experienced and talented employees.
All of this has led to a severely demoralized workforce and many people are voting with their feet by leaving in droves to pursue careers overseas.
In a speech last month, Taiwan Academy of Banking and Finance director Hung Mao-wei (洪茂蔚) said the brain-drain problem would continue to worsen due to the lack of high salaries and high-quality jobs for young people.
Those who stick it out often like to console themselves by saying that the situation is better than in Japan, but this is a misconception based an out-of-date stereotype. Japan is also an aging society and its rapidly shrinking workforce has forced businesses to reform. Reuters reported on Aug. 1 that there are 1.62 jobs available for every jobseeker in Japan — the strongest demand for labor in more than 44 years, while unemployment is at a 25-year low of 2.4 percent.
As a result, many Japanese companies have been forced to offer flexible hours, daycare, rent assistance and other benefits.
The fact is, Taiwanese workers are getting a bum deal.
The government has recognized the severity of the problem, but seems to believe that a combination of legislation and speechifying will somehow solve it.
Such an approach is doomed to fail, since the broken business model is fundamentally a cultural problem, and cultural changes cannot be made by government decree.
Change might come by necessity as the workforce shrinks or through the younger generation — only time will tell, but it is likely that the majority of businesses will carry on as normal, so ingrained is the mentality of corporate miserliness.
Taiwan’s broken business model is slowly eating itself, as well as the nation. It is high time the business community puts its money where its mouth is: If they genuinely care about Taiwan, they need to start investing in its people — if not for altruistic reasons, then at least to prepare themselves for the looming labor crunch.
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