Where is my money? – A salary crisis of majority class in Taiwan
- Blog by Steve Hwang
I'm sure you've all heard increasing concern on salary crisis of working class in Taiwan. There were lots of bad news and alarming sign—and leaders, government, corporations and individuals all contributed to this crisis.
I'd like to discuss how the situation of salary and the impact to majority class who makes up 90% of population in Taiwan and solution of how to improve it
Let me bring you back to summer of1985 when I finished my two-year mandatory military service. ITRI (Industrial Technology Research Institute), China Steel and few other companies offered me for a job interview and the starting salary for Bachelor degree was NT 20-25K/per month. I declined the interview and continued Master degree study in Materials Engineering Institutes, Taiwan University. Two years later in 1987, after I completed M.S. study, I was offered a job to Chins Steel, Chung-San Research Center, ITRI with a starting salary of 25-30K /per month. My thinking on salary of working in Taiwan that was logical and supported by own experience should be 20-25k for B.S. degree, 25-30K for M.S. degree, 30-35K for Ph.d. degree, and expected average annual increase rate 4-5%.
After spent 3 years in University of Utah of Ph.d. study and graduated with a doctoral degree in Metallurgical Engineering, I was very fortunate to receive a job offer with a starting salary of US $ 45K /per year which is equated to NT120K/per month during a global economic recession in the winter of 1990. Later, I’d learned that the starting salary of a new Ph.d. graduate in Silicon Valley was US$ 45-55K. After 20 years passed, in 2010, the starting salary for a new Ph.d. in Silicon Valley has been more than doubled and increased to US $ 100-120K/per year (NT$ 300K/per month). That is annual compound salary growth rate of 4-5% over last 20 years.
In October of 1997, I’d published a book with 三民書局. During this book publication and launch processes, I’d privilege to work, know and make friends with two young, intelligent and wonderful people. Cathy Chang, a graduate with B.S. degree from an prestigious national university, who was my editor, helped edit the script, arrange the print and book launch event. Neil Lin, a graduate with M.S. degree from another prestigious national university, who was a journalist with Business Weekly, wrote an article on how I applied the training from rugby sport in Cheng-Kung University to becoming a top management at Seagate Technology and of managing a global, diverse organization.
I was totally surprised to know that their salaries were in the range of NT$25-35K/per month. This salary ranges for new graduates who have spent years studying hard for advanced degrees, are just pitiful and have not improved for past 20 years. Furthermore, I’ve learned that overall salary ranges for new graduates, seasoned professionals, and low or high skilled people basically remain the same as before. However, there are few exceptions earning a big paycheck including cooperate executives, banker, Investor, or some high rank employees, roughly 10% of total population who enjoy all beneficial from economic growth, are compensated by hefty stock options, bonus, salary in order to match the competitive compensation package from other global corporations in Taiwan.
While the costs of housing, education, transportation, entertainment, food and others in 2007 are all more than double the price as compared to 1987. This is an alarming sign and needs immediate attention for solution – No country can successful build on the foundation when, majority class, 90% of people, are living a life from pay check to next pay check and struggling to maintain a comfortable living standard, while a small % of population are living in a extravagant, Hollywood movie star life style.
How can we fix this salary crisis in Taiwan?
Here are my suggestions:
Minimum hourly wage:
Government should pass a law of “ minimum hourly wage’ that is the lowest hourly wage that employers may pay to workers. Through the minmum hourly wage, it increases the standard of living of workers, reduces poverty and hardship.
The minimum wage has a strong social consideration, rooted in concern about providing sufficient income for low skilled members of the work force. Minimum wage structure through the law or policy can achieve a prefereable income structure and mitigate the impact of social injusted “M” ( 10% rich and 90% poor population) income structure.
Case in point: USA has federal minumum wage law to ensure a minumum hourly wage paid to workers and employees. In order to ajusted with inflation of living cost , the averaged minumium hourly wage has increased from US$ 3.35 in 1984 to US$ 5.85 in 1997.
I believe that the minmum hourly wage should be at NT $ 130-150/per year, roughly same minumum wage in USA in 1984..
Competitively salary and wage:
Government should enforce a policy for comparable salary and wage as compared to competitive nations. Taiwan should adopt a policy to define an average salary for different skill set of workers and enforces corporations and government to comply it. The salary structure is derived from the survey of average salary from Hong-Kong, Korea, and Singapore for comparable job function and skill set.
For example, the average of salary for a skill set employee in computing industry who has a M.S. degree with 10-15 years job experience is US $ 61K/per year (NT$ 150K/per month) from the average salary of competitive countries. The corporations in Taiwan needs to pay same skill set employees with salary scale from low end, -10%, US $55K ( NT$ 135K/per month) to high end, +10%, US$ 67K ( NT$ 165K/per month).
Case in point: At Seagate Technology, we’ve a salary structue based on survey result of average salary from top 5-10 coporations with similar size, same geographic location in IT industry, companies like Intel, CISCO, Applied Materials, HP, Dell….etc.
This salay sruture provides a guide line to annula focal review and salary adjustment. In my 16 years with Seagate Technoloyg, I ‘ve seen that typical annual salary adjustment is 2-6 % and 5-8% for employees who are promoted to next grade level with increading skill set, role and responsibility. Roughly, 10-15% of total employee will receive a promotion during annual focal review.
Competitive salary structure means that employees in Taiwan have salaries similar to companies with jobs in other competitive countries. This policy will provide an annual salary rate according to global economic growth; rather it is fully controlled by the executives and investors of corporations. Government and corporations need to aware that qualified people will look for and move to other countries if they can’t negotiate and receive a competitive pay.
Accelerate economic growth and create wealth for majority class:
A government-lead policy and law are necessary to prevent runaway salary gap from rich, to poor. However, the redistribution of money equity through the use of government function could cause a negative impact on entrepreneur spirit, new business initiative and foreign investment.
The Holy Grail to solve the salary crisis is wealth creation. One area Taiwan needs to improve quickly is economic growth. Although, economy in exports is still near the top as compared to others, Taiwan needs to become best in class on domestic economy, exports, tourism and all categories of economy. Only when Taiwan can return to healthy economic growth and to create abundant wealth, along with new policy of minimum wage, competitive salary, tax on stock option and high tax bracket for rich. If everyone in Taiwan does this all together, I am fully confident that Taiwan people can solve salary issue and return to a fair, friendly and happy society.
You’ve read my suggestions to this urgent issue. Please give your comments and pass on this blog to other people.
Thank you
Friday, March 19, 2010
Tuesday, March 9, 2010
A Sincere Message to the Leader and People in Taiwan
A Sincere Message to the Leader and People in Taiwan
- Blog by Steve Hwang
After a typical working day that is occupied by a very intensive meeting schedule, and filled with many conflicts and debates, I am usually drained physically and emotionally in the end of each working day. To take a break after a busy work hours, one of my daily routine before to call a day and to leave the office is that I would open the Internet and read on-line news from Taiwanese Newspapers.
Today, the title of below article that shown on one of major Taiwanese newspaper and may cause lots of fear, anxiety for the people, caught my eyes and motivated me to write and to gather my thought on one of very important topic.
敲醒馬政府 「四野人論壇」啟動 - 四人強調，國際大環境惡劣，政府又無能，台灣已處於高度危機的境地，必須要大破大立的變革，未來每個月都會舉辦「四野人論壇」，將邀請不同領域的專家與會，還要在5月19日、20日兩天舉辦民間國事論壇，要說出真相，喚醒社會各界、敲醒執政當局。
The topic: What leader and people in Taiwan need to do in order to turn around a country into a strong, competitive, prosper one???????
I would focus on my experience and career at Seagate Technology where I’ve participated every turn around task and learned to build a best in class, successful organization and the happiest place for employees to work. I wish that these experiences could help provide an insight, shed the light and point to the right direction for those who care and love Taiwan.
Just about 12 months ago in March 2009, Seagate Technology was in a very difficult business situation when the stock was trading at $3 dollars per share, and company had to lay off massive employees and to trim down the management ranks by 20-30%. Today, Seagate stock is trading at ~$20 dollars, that is an increase by 600-700% from the bottom price and one of most recommended stock to own by Wall Street to date.
This turn around story is not the 1st time or only time in Seagate’s 30 years history. We’d been through many up and down cycles in 1990, 1997, and 2001. Seagate, an American company, is one of few existing high tech hardware companies after many years of outsourcing of the production to low cost areas, such as China, Thailand, Malaysia…etc. Seagate, which just celebrated 30th birthday in November 2009, is the largest hard disc drive world wide, has become a great successful story and case study for those who want to succeed through the good and bad times, and to build a lasting and successful company. I strongly hope that this turn around lesson could be applied to big scale turn around in Taiwan as well.
Overall, the turn around process is typical involving two steps.
1. Appoint a right leader
It always starts with selecting a right leader who to set the overall strategy, plan and direction for people to follow and to execute.
The role and responsibility for the leader should cover three parts.
a. Create a strategy, plan and a sense of mission
The leader creates a strategy and plan that motivate citizen to feel a sense of mission, to willingly involve in community service and social issue, and to improve social prosperity.
A case in this point – During economic booming years in 1970- 1990, many professional Taiwanese saw that people’s lifes were highly relied on farming, living on poverty with inadequate infrastructure and an poor maintained environment surrounded the island. Thus, the people and country felt a social mission, a sense of national purpose and duty to step forward, and to improve the live of the people in Taiwan. This helps many Taiwanese find the meaning of their works and efforts.
Many baby-boomers in Taiwan knew about the story of “ 10 infrastructure projects ” by President Chiang Chin-Kuo – he said that if we don’t do today, we would regret it tomorrow. Taiwan needs your involvement to make it successful and to build a modern country. This sense of urgency and mission started these most important and successful“ infrastructure projects” in Taiwan history.
b. Engaging through transparency and accountability
Under a highly motivated and clear strategy and plan, the leader can build the commitment from the people by encouraging openness, communicating through transparency, and to holding everyone accountable. The government looks after the interest and benefit of citizen and their families, and in return asks citizen to look after the country’s interest.
The leader should post the decisions of major policy, personnel appointments, as well as any ethical failure, corruption and violation of the country’s law and policy on the internet or any medium means open to the public so citizens have clear visibility of “status of the country” and can give a voice to the government. Such involvements and engagements from the ordinary citizens can lead into action and provide grass-rooted solutions in moving country into the right directions.
To make a better and vibrant community, a country needs strong personal commitment and accountability from every citizen. However the leader needs to know that the commitment and accountability is people to the leader/country, the leader/country is equally accountable and committed to people.
c. Investing in educating, training and developing people
A country success is all based on the human capital. Only best in class people can build a best in class country. A leader needs to work on three themes of human capital
1. Managing and developing people and future leaders through training and education
2. Shaping the people’s attitudes to align with country’s mission and strategy.
3. Improving the social behaviors and moral, as well as building national culture and ethical awareness.
The case in this point: Taiwan once had excellent people development, education and continued study system to support economic, social and political growth. Human capitals were built through various education and training programs. To meet talent requirement for emerging high tech companies, one tenth of collage graduates went abroad for advanced degree study and were funded by family or government. Two tenth of college graduates chose to pursue advanced degree in Taiwan. Rest of college graduated began professional career after completing the college study or mandatory military service. Many community college graduates with hand-on skills and specialties entered the industry and contributed to economic, social and political progress in their early 20s.
In addition, government took an aggressive approach to training- despite a very competitive labor market as a result of 8-10% economic growth rate in 70-80’. Major training programs sponsored by government that included job and special skill training for low –skilled industries in Taiwan and sent future leaders and technical teams to oversea for developing leadership and technical know-how for high-skilled industries, had been considered building the corner stone of incredible Taiwan miracles in all economical, social and politic areas. Many companies, such as China Steel, TSMC, UMC, Ho-Hai that became a global renowned company, were the benefit of this human capital investment.
2. Select, form and engage a team for executing the commitment.
A well crafted and highly reward strategy and plan without a world-class execution will not yield the desirable result. An excellent execution starts with forming a tam.
______
reporter/communicator 1%
__________
Planner 2-3%
_________________
Project & People Management 10%
_______________________
Doer 80-90%
_____________________________
Figure 1
In my experience, an effective team that can execute and deliver the outstanding result should make up with the people skills like in figure1 where 80-90% of people are doer making the things happen and delivering the result.
While the team has 10% of management directing the team in the right direction and providing administrative and resource supports, 2-3% of small planning group managing the overall schedule and providing logistic support, and a very small group, 1%, for communicating with public and keeping everyone post with the progress team is achieving.
In contrast, a dysfunctional and ineffective team is composed of as shown in figure2 where non-productive people, who do not deliver the result for the country and merely serve as supporting function. Those that include reporter/communicator, planner, management, make up total 50% of the dysfunctional team. In this dysfunctional team, the doers who do the works and are roughly 50% of overall population, are regularly bombarded and frustrated with the inquiries, criticism, nonsense from non-productive groups, reporter/communicators in particular.
____________________
Reporter/Communicator 30%
_________________
Planner 10%
_____________
Project/People Management 10%
_______
Doer 50%
____
Figure 2
You might ask that it sounds too simple for turning a company or a country around? It is simple indeed and takes only two steps. However, the process is simple but very difficult to accomplish because, first of all, it requires a visionary leader who has courage, passion and sense of mission. The leader is able to create a plan/strategy, to select right people, to motivate, and hold them accountable for delivering the result.
This process also needs that majority of citizen with best talents and skills are willing to be the doer, to get hand dirty, and to make things happen, instead of staying on the sideline, acting as coaches, consultants or reporters or worst of all, fighting, arguing, bickering and wasting valuable time and resource among fellow citizens and government.
The message of this blog is that the destiny of Taiwan is in the hand of every citizen. The leader has to act and takes full responsibility, and every citizen can contribute to the turn around task by becoming the doer and by making the things happen. I am confident that the leader and citizens in Taiwan have commitment, sense of urgency and know what to do to building the best ever country.
In closing, what an ordinary citizen can do?? Regardless of how small and how insignificance it might looks from one individual, but many, many of us can definitely make the difference by answering to this calling for making a better Taiwan in our own ways.
Here is my action: In order to walk the talk and prevent myself from becoming one of reporter/communicators in Fig 2 who know everything, have all the solutions but don’t want do anything, I’ve applied and being accepted to “ Elite Program” on that Taiwan government invites oversea Taiwanese in technical field for a short stay.
Through “ elite program”, I want to share my technical experience on thin film applications, my managerial and leadership leaning, and R & D know-how with the young technologist and scientists in universities and high tech industries. Meanwhile, I would donate the pay from this program back to student, engineers and local communities with that I determine to become a doer, who works hard and is committed to contributing in a small way to the success and bright future of Taiwan.
Let’s start today, answer the calling, give our best and contribute anyway we can.
What do you think? Give your inputs.
Thank you,
- Blog by Steve Hwang
After a typical working day that is occupied by a very intensive meeting schedule, and filled with many conflicts and debates, I am usually drained physically and emotionally in the end of each working day. To take a break after a busy work hours, one of my daily routine before to call a day and to leave the office is that I would open the Internet and read on-line news from Taiwanese Newspapers.
Today, the title of below article that shown on one of major Taiwanese newspaper and may cause lots of fear, anxiety for the people, caught my eyes and motivated me to write and to gather my thought on one of very important topic.
敲醒馬政府 「四野人論壇」啟動 - 四人強調，國際大環境惡劣，政府又無能，台灣已處於高度危機的境地，必須要大破大立的變革，未來每個月都會舉辦「四野人論壇」，將邀請不同領域的專家與會，還要在5月19日、20日兩天舉辦民間國事論壇，要說出真相，喚醒社會各界、敲醒執政當局。
The topic: What leader and people in Taiwan need to do in order to turn around a country into a strong, competitive, prosper one???????
I would focus on my experience and career at Seagate Technology where I’ve participated every turn around task and learned to build a best in class, successful organization and the happiest place for employees to work. I wish that these experiences could help provide an insight, shed the light and point to the right direction for those who care and love Taiwan.
Just about 12 months ago in March 2009, Seagate Technology was in a very difficult business situation when the stock was trading at $3 dollars per share, and company had to lay off massive employees and to trim down the management ranks by 20-30%. Today, Seagate stock is trading at ~$20 dollars, that is an increase by 600-700% from the bottom price and one of most recommended stock to own by Wall Street to date.
This turn around story is not the 1st time or only time in Seagate’s 30 years history. We’d been through many up and down cycles in 1990, 1997, and 2001. Seagate, an American company, is one of few existing high tech hardware companies after many years of outsourcing of the production to low cost areas, such as China, Thailand, Malaysia…etc. Seagate, which just celebrated 30th birthday in November 2009, is the largest hard disc drive world wide, has become a great successful story and case study for those who want to succeed through the good and bad times, and to build a lasting and successful company. I strongly hope that this turn around lesson could be applied to big scale turn around in Taiwan as well.
Overall, the turn around process is typical involving two steps.
1. Appoint a right leader
It always starts with selecting a right leader who to set the overall strategy, plan and direction for people to follow and to execute.
The role and responsibility for the leader should cover three parts.
a. Create a strategy, plan and a sense of mission
The leader creates a strategy and plan that motivate citizen to feel a sense of mission, to willingly involve in community service and social issue, and to improve social prosperity.
A case in this point – During economic booming years in 1970- 1990, many professional Taiwanese saw that people’s lifes were highly relied on farming, living on poverty with inadequate infrastructure and an poor maintained environment surrounded the island. Thus, the people and country felt a social mission, a sense of national purpose and duty to step forward, and to improve the live of the people in Taiwan. This helps many Taiwanese find the meaning of their works and efforts.
Many baby-boomers in Taiwan knew about the story of “ 10 infrastructure projects ” by President Chiang Chin-Kuo – he said that if we don’t do today, we would regret it tomorrow. Taiwan needs your involvement to make it successful and to build a modern country. This sense of urgency and mission started these most important and successful“ infrastructure projects” in Taiwan history.
b. Engaging through transparency and accountability
Under a highly motivated and clear strategy and plan, the leader can build the commitment from the people by encouraging openness, communicating through transparency, and to holding everyone accountable. The government looks after the interest and benefit of citizen and their families, and in return asks citizen to look after the country’s interest.
The leader should post the decisions of major policy, personnel appointments, as well as any ethical failure, corruption and violation of the country’s law and policy on the internet or any medium means open to the public so citizens have clear visibility of “status of the country” and can give a voice to the government. Such involvements and engagements from the ordinary citizens can lead into action and provide grass-rooted solutions in moving country into the right directions.
To make a better and vibrant community, a country needs strong personal commitment and accountability from every citizen. However the leader needs to know that the commitment and accountability is people to the leader/country, the leader/country is equally accountable and committed to people.
c. Investing in educating, training and developing people
A country success is all based on the human capital. Only best in class people can build a best in class country. A leader needs to work on three themes of human capital
1. Managing and developing people and future leaders through training and education
2. Shaping the people’s attitudes to align with country’s mission and strategy.
3. Improving the social behaviors and moral, as well as building national culture and ethical awareness.
The case in this point: Taiwan once had excellent people development, education and continued study system to support economic, social and political growth. Human capitals were built through various education and training programs. To meet talent requirement for emerging high tech companies, one tenth of collage graduates went abroad for advanced degree study and were funded by family or government. Two tenth of college graduates chose to pursue advanced degree in Taiwan. Rest of college graduated began professional career after completing the college study or mandatory military service. Many community college graduates with hand-on skills and specialties entered the industry and contributed to economic, social and political progress in their early 20s.
In addition, government took an aggressive approach to training- despite a very competitive labor market as a result of 8-10% economic growth rate in 70-80’. Major training programs sponsored by government that included job and special skill training for low –skilled industries in Taiwan and sent future leaders and technical teams to oversea for developing leadership and technical know-how for high-skilled industries, had been considered building the corner stone of incredible Taiwan miracles in all economical, social and politic areas. Many companies, such as China Steel, TSMC, UMC, Ho-Hai that became a global renowned company, were the benefit of this human capital investment.
2. Select, form and engage a team for executing the commitment.
A well crafted and highly reward strategy and plan without a world-class execution will not yield the desirable result. An excellent execution starts with forming a tam.
______
reporter/communicator 1%
__________
Planner 2-3%
_________________
Project & People Management 10%
_______________________
Doer 80-90%
_____________________________
Figure 1
In my experience, an effective team that can execute and deliver the outstanding result should make up with the people skills like in figure1 where 80-90% of people are doer making the things happen and delivering the result.
While the team has 10% of management directing the team in the right direction and providing administrative and resource supports, 2-3% of small planning group managing the overall schedule and providing logistic support, and a very small group, 1%, for communicating with public and keeping everyone post with the progress team is achieving.
In contrast, a dysfunctional and ineffective team is composed of as shown in figure2 where non-productive people, who do not deliver the result for the country and merely serve as supporting function. Those that include reporter/communicator, planner, management, make up total 50% of the dysfunctional team. In this dysfunctional team, the doers who do the works and are roughly 50% of overall population, are regularly bombarded and frustrated with the inquiries, criticism, nonsense from non-productive groups, reporter/communicators in particular.
____________________
Reporter/Communicator 30%
_________________
Planner 10%
_____________
Project/People Management 10%
_______
Doer 50%
____
Figure 2
You might ask that it sounds too simple for turning a company or a country around? It is simple indeed and takes only two steps. However, the process is simple but very difficult to accomplish because, first of all, it requires a visionary leader who has courage, passion and sense of mission. The leader is able to create a plan/strategy, to select right people, to motivate, and hold them accountable for delivering the result.
This process also needs that majority of citizen with best talents and skills are willing to be the doer, to get hand dirty, and to make things happen, instead of staying on the sideline, acting as coaches, consultants or reporters or worst of all, fighting, arguing, bickering and wasting valuable time and resource among fellow citizens and government.
The message of this blog is that the destiny of Taiwan is in the hand of every citizen. The leader has to act and takes full responsibility, and every citizen can contribute to the turn around task by becoming the doer and by making the things happen. I am confident that the leader and citizens in Taiwan have commitment, sense of urgency and know what to do to building the best ever country.
In closing, what an ordinary citizen can do?? Regardless of how small and how insignificance it might looks from one individual, but many, many of us can definitely make the difference by answering to this calling for making a better Taiwan in our own ways.
Here is my action: In order to walk the talk and prevent myself from becoming one of reporter/communicators in Fig 2 who know everything, have all the solutions but don’t want do anything, I’ve applied and being accepted to “ Elite Program” on that Taiwan government invites oversea Taiwanese in technical field for a short stay.
Through “ elite program”, I want to share my technical experience on thin film applications, my managerial and leadership leaning, and R & D know-how with the young technologist and scientists in universities and high tech industries. Meanwhile, I would donate the pay from this program back to student, engineers and local communities with that I determine to become a doer, who works hard and is committed to contributing in a small way to the success and bright future of Taiwan.
Let’s start today, answer the calling, give our best and contribute anyway we can.
What do you think? Give your inputs.
Thank you,
Subscribe to:
Posts (Atom)
