Taiwan’s hospitality sector is facing a strong upswing, as renewed interest in domestic and foreign travel has been stimulated by relaxation of COVID-19 restrictions and eased mask rules.
However, the pandemic has aggravated labor shortages in the sector. Filling vacancies is crucial for companies in the hospitality sector, from travel agencies and restaurants to hotel operators, to seize the opportunity to recoup what they lost during the pandemic, or stimulate new business.
The government is concentrating on boosting talent for local chip companies and high-tech manufacturing firms, as they are considered key industries with a strong economic and strategic output. This year, the government should address the labor shortage in the services sector, which could be a significant growth engine for the economy this year after exports have seen weakened demand amid surging inflation, slow economic growth and geopolitical instability.
Before the pandemic, the hospitality sector was unable to compete with other sectors in recruitment, as it has a reputation for long working hours, relatively low income and high responsibilities. This has been compounded by a shrinking job pool amid a low birthrate and an aging population. The pandemic aggravated the issue, as travel agencies, restaurants and even tour bus leasing operators lost employees when business slumped over the past few years. It has been hard to get workers back and to bring in new blood.
A tour bus leasing operator said tens of thousands of tour bus drivers have left the sector over the past few years, as they either retired or found new jobs with flexible, shorter working hours — such as city bus drivers or Uber drivers. The company said its business plummeted by 90 percent during the peak of the pandemic, and it is striving to recoup business as people hit the road again. Without sufficient drivers, it is likely to take longer for the company to recover to pre-pandemic levels, it said.
To prevent labor shortages from hampering recovery in the post-COVID-19 boom, companies are hiking wages, offering new perks and promotional packages to attract new graduates or other jobseekers.
At the beginning of this year, restaurant chain operator TTFB Co Ltd unveiled wage hikes of 10 percent to 35 percent, aiming to entice young workers to join the company. Wowprime Corp, which owns the Wang Steak, Tasty and Tokiya brands, earlier this year raised the entry-level salary to NT$33,000 per month. That does not include year-end bonuses and incentive bonuses, the restaurant chain operator said. Wowprime plans to hire 500 employees this year to manage its outlet expansion of 50 stores.
Due to rapid increases in inbound and outbound tourists, Lion Travel Service Co is creating 500 new jobs this year, after losing about 1,000 employees — about 40 percent of its workforce — during the pandemic. Hotels also aim to add 500 jobs.
Despite the private sector showing strong recruitment efforts, the real problem is the shrinking labor pool. The government needs to step in and develop labor policies to solve the problem. Some economists suggested adjustments to migration laws, and relaxing rules to allow more foreign workers to expand the labor pool. Singapore has set a good example by introducing greater flexibility in encouraging more skilled and entry-level workers to take up employment in the city-state, minimizing the effect of labor shortages on its economy. This could be an effective approach for Taiwan to address its chronic labor shortage.
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