Taiwanese businesses need to come up with new ideas to manage their overseas employees, as they face risks to their competitive edge and profit base amid increasing globalization.
Given differences in the workplace culture between Taiwan and other countries, local firms might find that their old playbooks are ineffective, such as squeezing every drop of profit from endless cost reductions and demanding long hours at the office.
Local companies have been forced to allocate production out of China and build new production lines as requested by their customers to enhance supply chain resilience amid geopolitical tensions and the COVID-19 pandemic. They risk losing orders to competitors if they fail to diversify manufacturing sites.
However, high manufacturing costs are a major hurdle they have to overcome, as higher labor costs, and a lack of infrastructure and supply chain clusters would push overall costs higher.
Differences in work culture and labor shortages have proven a major headache for local businesses. Even large companies such as Taiwan Semiconductor Manufacturing Co (TSMC) face difficulties in managing its US employees and cannot find enough staff for its Arizona fabs. There have been reports of its US employees complaining about long working hours, rigid management and unfair treatment.
At home, working at TSMC was once considered a dream job for many young people, as it offered a high salary and better-than-average employee benefit packages. TSMC engineers fully understood the working environment: They have to work in three or four shifts to ensure that factories operate around the clock. Such working conditions seem common in Taiwan, but they are not for everyone. For many Westerners, work-life balance is essential.
TSMC attributed US employees’ complaints primarily to managers’ inability to handle global talent.
“We are still learning about this,” TSMC chairman Mark Liu (劉德音) said earlier this month. “TSMC’s managers should know how to manage global talent, not just talent from Taiwan,” Liu said.
TSMC should learn quickly about how to prepare foreign workers for its workplace culture, as it is close to finalizing a new chip manufacturing facility in Europe, most likely in Germany. As most Taiwanese companies lack experience dealing with workers’ unions, it would be important for TSMC managers to learn how to communicate with labor unions.
The chipmaker has said it has sent a human resources team to Europe to prepare for recruitment and comprehend the labor culture there. TSMC has also talked to the CEOs of ASML Holding NV and Infineon Technologies AG to gain a better understanding of Germany’s unions.
Things are different in Taiwan, as most businesses abide by the Labor Standards Act (勞動基準法), with detailed regulations about payrolls, working hours, retirement and labor benefits.
In the US and Europe, labor unions play a bigger role in negotiating with employers to decide on paychecks, working hours and benefits. Any breakdown in negotiations could lead to labor strikes that halt production.
Silicon wafer supplier GlobalWafers Co operates 18 factories in nine countries. It has said one of its major challenges abroad has been negotiating with workers’ unions, an area Taiwanese companies are unfamiliar with.
GlobalWafers allows local management teams to take care of labor affairs, as they have deep experience on the issue and have built relationships with workers’ unions.
However, GlobalWafers is an exception. Most Taiwanese companies have to respect the differences in workplace culture and learn how to handle possible issues before they can profit from globalization.
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