Skilled Labor Shortage Requires Root Level Solutions
United Daily News editorial (Taipei, Taiwan, ROC)
August 13, 2012
Summary: The shortage of skilled labor is a systemic problem. Upstream we must
improve the educational system. Midstream we must increase hiring
opportunities. Downstream we must offer incentives to retain skilled
labor. Only then can the situation be improved. The first two require
restructuring. They must begin immediately. But they will not yield
results in the short-term. Therefore we must increase the incentives to
attract talent. This includes improved conditions to attract talent from
the Mainland, as a short term cure.
Full Text below:
Chu Ching-yi, Chairman of the National Science Council, and Kuan Chung-ming, a Member of the Executive Yuan Political Affairs Office, along with other government leaders, have recently warned about the shortage of skilled labor. Kuan fears that the Republic of China will become a "third rate nation." Chu was even more blunt. He said if the problem is not addressed, we will soon "die a miserable death."
Over the past several years, Taiwan has experienced a shortage of skilled labor, in many areas. This is a topic that has attracted much public attention. Everyone knows about the problem. But no one has a clear solution. The two officials' remarks stunned the public. Their remarks reflected their sense of powerlessness and sense of urgency.
There are many kinds of skilled labor. Some skills are innate. But many more skills are acquired through education and training. One solve the shortage of skilled labor problem by acquiring the necessary skills. One can thereby meet one's target requirements. Those who are born with skills are geniuses. They are statistically rare. Most people with skills acquired them. They are more common. They come from all walks of life. Both the public and private sectors must make every effort to find, hire, and keep skilled labor. The so-called shortage of skilled labor involves three problems. The lack of skilled labor, the lack of job opportunities for skilled labor, and the inability to retain skilled labor.
Take the lack of skilled labor. To say that Taiwan lacks skilled labor is perhaps an exaggeration. The "lack of skilled labor" may be a lack of labor with the skills to solve certain problems and to meet certain goals. Taiwan has millions of people with Masters and PhDs. On a per capita basis, it ranks number one in the world. Clearly this is not a problem of quantity, but of quality.
Over the past decade, institutions of higher learning have thrown open their doors. Masters degrees are now as commonplace as Bachelors degrees. PhDs are now as commonplace as Masters degrees. This has dramatically reduced the incentive for students to study abroad. It has also created many graduates with advanced degrees but who have few real world skills. They do not meet the educational and training requirements of either industry or society. Those who need skilled labor seldom need academics with broad, generalized knowledge. They need individuals able to think on their own, with the ability to solve problems creatively, with the ability to cope with different challenges at different stages of the game. As a result, education and employment have experienced a serious disconnect.
To cope with surging enrollments, universities have been forced to adopt passive teaching methods. As a result students lack the ability to think for themselves. They lack training in how to innovate. They bury their heads in their books. They never look around at the world. The birth rate is low. National Taiwan University, Tsinghua University, Jiaotong University and other institutions all have trouble recruiting students. The shortage in resources means teachers carelessly assign teaching materials. This, and poor students with no desire to learn, lead to a vicious cycle. No wonder one multinational company said the pool of talent on Taiwan is shallower than a sheet of paper.
Now take the lack of job opportunities for skilled labor. Economic growth on Taiwan has slowed recently. This has reduced employment opportunities. Naturally it has affected worker recruitment. Private enterprises have a variety of mechanisms to seek out and hire skilled labor. They are more flexible, therefore encounter fewer problems. By contrast, government agencies have long had to guard against fraud. This has made them rigid in their hiring practices. Government hiring requires strict adherence to test scores. These determine one's advancement. More senior civil servants require more diverse skills. But promotions are still limited by the civil service system. The government needs creative individuals with a more macro level perspective. Even those willing to accept salaries significantly lower than those offered by private enterprises, are denied the opportunity. Former National Security Council Secretary General Su Chi said the government's lack of talent was the result of twenty years of "too much conservatism, too little creativity."
Finally, take Taiwan's inability to retain skilled labor. The mobility of skilled labor is generally a good thing. As long as one introduces new blood, one introduces new thinking. But Taiwan currently faces a brain drain. The reasons are varied. Low salaries, unreasonable restrictions against the hiring of foreign workers, and the lack of a coherent legal framework are the main culprits that invite universal condemnation.
These problems are particularly serious in research institutions. The Mainland lures away skilled labor with high salaries. Starting salaries for teachers at universities in Hong Kong and Macau have long been four to five times higher than on Taiwan. The "anti-fat cat" initiatives were supposed to prevent sweetheart deals in public works projects. Instead they were misapplied to international caliber talent at the Industrial Technology Research Institute and the National Institutes of Health. These people were engaged in R&D that would help us leapfrog others through rapid innovation. Our competitors offer skilled labor a wide range of benefits. We on the other hand, impose all manner of restrictions. How can we not cause a brain drain?
Many measures protecting domestic labor block more than blue-collar foreign labor. They also prevent the hiring of highly skilled foreign labor, including lawyers, accountants, and other professionals. This illustrates the limits of protectionism.
The shortage of skilled labor is a systemic problem. Upstream we must improve the educational system. Midstream we must increase hiring opportunities. Downstream we must offer incentives to retain skilled labor. Only then can the situation be improved. The first two require restructuring. They must begin immediately. But they will not yield results in the short-term. Therefore we must increase the incentives to attract talent. This includes improved conditions to attract talent from the Mainland, as a short term cure.