Elite Talent Changing Course
High Tech Loses Its Luster
With rising unemployment grabbing the headlines, an important trend in Taiwan's labor market is flying under the radar: The country's top talent is gravitating toward the service sector at the expense of high tech.
High Tech Loses Its LusterBy Elaine Huang
From CommonWealth Magazine (vol. 420 )
A casual look through Taiwan's employment statistics reveals that the country's distribution of elite talent is shifting rapidly.
The refrain "no more high tech" is the new trend driving the local job market's change in terrain, asserts Jason Chin, vice president of online headhunter 104 Corporation.
Chin has recently been busy at the Hsinchu Science Park interviewing middle- and upper-level executives who have decided to give up their jobs in high-tech enterprises. Many have told him categorically that they no longer are willing to work in the high-tech sector.
One key factor driving the exodus is a change made by the government to accounting rules in 2008, requiring high-tech companies to expense employee stock bonuses. Previously, stock bonuses were an important element of high-tech firms' compensation packages, sometimes accounting for more than 50 percent of the take-home pay of top employees, and were seen as a key tool in recruiting talent. By treating these bonuses as earnings distributions rather than expenses, high-tech companies in effect kept nominal wages and salaries lower and were able to report higher earnings.
But since high-tech firms have had to expense stock bonuses, in line with evolving industry standards reflecting concerns that stock bonuses were diluting shareholder equity, companies have shied away from this compensation method, cutting into the actual pay received by the high-tech elite.
Another important reason why executives are abandoning the once lucrative sector is the structural nature of the recent economic downturn, which took a particularly heavy toll on leading high-tech firms and smashed their aura as "talent magnets," leading to a new wave of talent migration.
According to an analysis of the database of online job broker 104 Job Bank, the top 10 industries targeted by job seekers over the past three years shifted markedly in the first quarter of 2009, sparked by three key trends, as described below.
Trend 1: Electronics on the Wane
First, the top 10 industries targeted by white-collar job seekers interested in the technology field have shifted away dramatically from the electronics field. In 2007, 62 percent of job seekers chose electronics as one of the 10 most desirable technology fields, but that ratio fell to 45 percent in 2008 and 32 percent in 2009. (Table 1)
Also, over the past two years, the top five occupations coveted by job seekers were concentrated in the technology and electronics fields, but as of April 2009, the "software and Internet sectors" had fallen outside the 10 most sought-after occupational fields.
Trend 2: Service on the Rise
The service sector has grown increasingly popular, with the food and beverage industry rising from seventh among desirable fields in 2008 to fifth in 2009. The health-care sector also made it into the top 10 in the latest survey. (Table 2)
Trend 3: Diversification of Job Targets
Over the past three years, a decreasing percentage of job seekers have been pursuing jobs in the top 10 fields – an indication that the interests of Taiwan's workers are growing increasingly diverse. In 2007, 99.2 percent of job seekers hoped to be employed somewhere in the top 10 sectors, but that portion declined to 74.3 percent in 2008 and 47.4 percent this year, underscoring the trend among local workers to seek out opportunities in a widening array of industries. The numbers also represented a decreasing concentration of interest in the traditional top 10 sectors.
Service In, High Tech Out
A Cheers Magazine survey of the "100 Most Attractive Enterprises to the New Generation" conducted in March highlighted these trends. The results of the survey, to be released in May, show that in the wake of the global financial tsunami, nearly all technology-related sectors have declined in attractiveness among younger Taiwanese. Of the 20 most attractive companies cited by respondents, only five were high-tech companies, while the service sector made significant inroads.
The two companies leading the survey in 2008, Hon Hai Precision Industry and Asustek Computer, fell to fifth and sixth respectively and were supplanted by Uni-President Enterprise Corp. and Eslite Books. (Table 3)
Perennial top-10 finisher Taiwan Semiconductor Manufacturing Co. (TSMC) fell out of the elite group, while flat panel giant AU Optronics tumbled from ninth in 2008 to 30th in 2009. Fabless semiconductor company Mediatek Inc., whose share price is the highest on Taiwan's stock exchange, fell to 46th. The only technology company to buck the trend was HTC Corp., which has built an international brand name based on the iphone's popularization of touch screen smartphones, rising from 61st to 33rd place.
If high tech is no longer the top choice, then where is the talent flowing?
Talent Migration No. 1: From Big Players to SMEs
104 Corporation's Chin observes that the hiring freeze imposed by front-line high-tech vendors due to the current global economic slump has given many second- and third-line enterprises a chance to snag top professionals who would have normally gravitated to the biggest players in the industry.
It has also enabled conventional small- and medium-sized enterprises (SMEs) to upgrade their talent levels.
These SMEs have annual sales generally ranging from NT$1 billion to NT$5 billion, big enough to be listed on Taiwan's over-the-counter market, and show paid-in capital of between NT$300 million to NT$500 million.
"The impact of the downturn on these companies has been limited. They have deep pockets and have taken advantage of the recession to recruit talent," Chin says, who describes the SME owners as making a very shrewd calculation. "They're willing to pay, but they are also demanding instant results."
Cindy Chen, the Taiwan country manager for human resources solutions provider Adecco, says that when it comes time for founders of SMEs to search for their successors, especially when they face the challenge of having to expand their businesses overseas, they need to find professional managers with international marketing experience.
"They are capitalizing on this environment to add the functional talent they need to keep the company growing," Chen says.
The Test Rite Group, the operator of home improvement retailer B&Q in Taiwan, did exactly that, luring former IBM Taiwan CEO Sophia Tong away from "Big Blue" to help the group expand and improve its global planning and management capabilities.
Talent Migration No. 2: Seeking a Stage
Others are changing their career paths in search of a stage on which they can excel in the second half of their lives.
Fifty-year-old Allen Tien, the CEO of Wonderful Asset Co., Ltd. is one such example. Tien, who helped French retailer Carrefour establish its strong presence in Taiwan, decided to open a new frontier in Yilan County, where he founded Luna Plaza, the biggest shopping mall in eastern Taiwan, creating 1,650 job opportunities for the local community.
In the face of a paradigm-shifting economic downturn, Taiwan's industrial structure is experiencing unprecedented upheaval, and workers sensitive to the turbulence have decided to take different career paths.
"This is not necessarily a bad thing," says Wen-Jeng Lin, an associate professor in National Central University's Graduate Institute of Human Resource Management, in looking at the latest wave of labor migration from a different angle. Lin, in fact, is optimistic that the dispersion of talent to different sectors will have a positive effect on the next phase of Taiwan's industrial development.
But as more people enter the service sector, the question remains how to raise the service sector's productivity. Only if productivity in the sector rises will Taiwan's gross domestic product see new growth in the future.
Translated from the Chinese by Luke Sabatier