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Employees maintains the longest long-term relationships with the company. Therefore, ensuring fairness in employee compensation and protecting their rights are essential parts of fulfilling corporate social responsibility (CSR). Employee issues involve multiple considerations, with particular attention given to the salaries of employees. This article will take you through the recent trends in salaries among Taiwan’s listed and OTC companies. Additionally, we will explore workplace safety and labor incidents that have occurred since this year, allowing you to examine the importance of employee welfare and the social dimension (S) of ESG in discovering sustainable companies.
Since 2016, the Taiwanese government has consistently increased the basic salary for seven consecutive years. The aim is to enhance work efficiency by increasing the income of grassroots workers, taking care of their basic living needs, and stimulating domestic consumption expenditure and economic growth. In addition, the Financial Supervisory Commission (FSC) implemented regulations in 2018 that require listed companies to disclose data such as the average benefits and average salary expenses of non-executive full-time employees, as well as the EPS. The purpose is to ensure fair employee compensation.
With the support of relevant agencies, has there been growth in salaries among Taiwan’s companies in recent years?
According to the TESG Sustainable Dataset, the compound annual growth rate (CAGR) of EPS for Taiwan’s companies from 2018 to 2021 was 15.8%. With the increase in EPS, the average annual salary for all companies reached 1.171 million in 2021, with a CAGR of approximately 6.5%, showing stable growth. In 2021, due to the recovery from the pandemic and a significant growth in export markets, both EPS and salaries experienced significant increases. With a 41% growth in EPS, the total annual salary also grew by 14%.
However, among all industries, which industries contributed to the overall average salary of 1.17 million, and which industries lagged behind the average?
Through the TESG Sustainable Dataset, we compiled the top ten and bottom five industries in terms of salaries in 2021 (as shown in chart 2). The highest-paying industry in 2021 was the semiconductor industry, with an annual salary of 1.646 million, approximately 250 thousands NTD higher than the second-ranked industry. Following that were the Iron & Steel industry (1.395 million), the financial industry (1.336 million), the Plastics industry (1.323 million), and the Shipping industry (1.317 million). It is worth noting that the average salary across all industries was 1.171 million. The salaries of industries lower than No.7 were lower than the industry average, indicating a significant wage gap between the middle class and industries with extremely high salaries.
The large wage disparity may be attributed to the impact of the pandemic on domestic demand industries, which experienced slow growth or even negative growth in 2021. This can be observed from the bottom five industries in the chart, where most of them belong to domestic demand industries. Among them, the Tourism industry had the lowest annual salary at only 529 thousands, followed by Agricultural science & technology (675 thousands) and Textiles (695 thousands) industries. On the other hand, the semiconductor industry tops all the industries with a salary of 1.65 million, which was more than three times higher than that in the tourism industry, indicating generous compensation in the semiconductor industry.
We have also listed the top ten companies in terms of salaries, let’s see who showcase the most outstanding performance in this aspect.
Regarding average salaries, the top-ranking company is MediaTek, with an impressive annual salary of 5.15 million. It is followed by NovaTek (4.99 million) and ESMT (4.5 million). When considering the median salaries, the top three companies remain the same, with a slight change in rankings. ESMT takes the first place with a median salary of 4.33 million NTD, followed by NovaTek and MediaTek. It is noteworthy that out of these top ten companies, eight of them belong to the semiconductor industry, with only FTC (2354.TW) and Evergreen (2603.TW) being exceptions. Furthermore, upon closer examination, all eight semiconductor companies are IC design companies, highlighting the leading position of IC design firms in terms of salary compensation in Taiwanese companies.
In addition to salaries, it is important for companies to ensure a non-violation of labor laws and a safe working environment for employees. TEJ has compiled data on the number of violations of labor law in 2023. The following is an explanation:
In conclusion, employees are the most valuable assets of a company and a crucial strategic resource for sustainable development. While increasing salaries is one aspect, what truly matters is the emphasis on employee rights and well-being. Companies can provide fair salary systems, generous benefits, training and development opportunities, but they must not overlook the importance of workplace safety. By integrating these factors, companies can effectively attract, retain, and motivate exceptional talent. Lat but not least, it is essential to foster mutual growth with employees, thereby enhancing the competitiveness of the company and achieving sustainable development.
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