EDITORIAL: Labor shortage hindering growth

Employers have been facing a serious talent shortage during the post-COVID-19 period, with the manufacturing and service industries calling for an urgent government response and demanding that they be allowed to hire more foreign workers. The Cabinet has set a goal of attracting up to 400,000 foreign workers by 2030 to address the labor shortage, while the Ministry of Labor is easing rules for hiring migrant workers in manufacturing, construction, agriculture and long-term care, with an estimated 28,000 people likely to be admitted under the new policy.

Companies in the industrial and service sectors reported about 216,000 job vacancies in the first half of this year, a Directorate-General of Budget, Accounting and Statistics (DGBAS) survey showed. Most serious was the shortage of 84,000 mid-level technical workers, which includes technicians and associate professionals, craft and trade workers, as well as plant and machine operators. They accounted for about 39 percent of the vacancies, followed by openings for 51,000 professional personnel, and 41,000 service and sales staff.

The shortage of mid-level technical workers has persisted for a long time, but the number of job openings for service, shop and sales personnel reached the highest level in five years at about 19 percent of total vacancies. The DGBAS attributed the rise to people resuming consumption activity after the COVID-19 pandemic, boosting demand for service staff.

Nevertheless, it is the chronic shortage of mid-level technical workers that poses a critical problem to the nation’s long-term development, socially and economically. These skilled workers are vital to technology industries such as semiconductors and non-technology industries such as machinery making, the National Development Council says.

While the nation’s low birthrate is a major factor in the overall drop in the working population, the persistent decline in the number of vocational students in the past few years has contributed to the shortage of mid-level technical workers. The problem did not appear overnight. It reflects a long-term situation in which society values academic credentials over practical skills, while students prefer to attend universities and colleges rather than vocational schools.

The government has in the past few years implemented measures to retain skilled foreign workers after they complete their contracts. The continued retention and employment of experienced foreign workers can greatly reduce the time and cost of cultivating new workers. It can also prevent such workers from being poached by other countries and territories facing shrinking labor pools, such as China, Hong Kong, Singapore and South Korea.

The “Long-term Retention of Skilled Foreign Workers Program” launched by the Ministry of Labor last year is aimed at allowing employers to retain foreign workers who have worked in Taiwan for at least six years. The program also provides opportunities for foreign workers to change their immigration status to “intermediate-skilled personnel,” which sets no limit on their work duration, while allowing them to apply for permanent residency after working for five years.

Demand for mid-level technical workers from local industries remains high, and the government must streamline the application process for employers to retain eligible workers. At the same time, it should promote vocational education and improve vocational schools, make vocational licenses and certifications more valuable, and promote the value of professional skills in society.