2023 – Q3 Job Market Report

Evaluation and Prospect of Global Macroeconomics

According to the Adecco Macroeconomic and Labor Report 2023, global economic growth is projected to decelerate in 2023 but will recover in 2024. The report examines economic indicators such as PMI and global transportation costs, which suggest increased production, significant improvement in supply chain challenges, a decline in energy prices, and reduced cost pressures.

The overall global GDP growth is estimated to be 2.4% in 2023 and 3.0% in 2024, which falls below the average levels observed before the COVID-19 outbreak. Economic activity indicators for the United States, the Eurozone, and China exhibit greater resilience than initially expected at the beginning of the year. However, policymakers still need to face challenges carefully. By stabilizing finances through appropriate measures, they can build new growth engines in the post-pandemic era, and enhance flexibility to promote sustainable and inclusive economic growth.

Inflation Crisis Easing Slightly, Asia-Pacific Regions Outperforms Europe and America

Furthermore, it is worth noting that in May, the United States experienced the lowest inflation rate in over two years. This suggests a slight easing of inflation that emerged as a global crisis since 2022 due to the Russian invasion of Ukraine. But as developed economies such as the United States and the United Kingdom implement deflationary policies and raise interest rates to tackle inflation, a mild recession is expected to occur within this year. In contrast, the European and Latin America continents are anticipated to achieve modest positive growth

In comparison, the Asia-Pacific, Middle East, and North Africa regions are making steady progress. There are high expectations for emerging economies in Asia. According to OECD’s predictions, though the economic growth of emerging Asian countries faces challenges from factors such as pandemic fluctuation, the Ukraine war, global economic slowdown, and supply chain disruptions. Nonetheless, with appropriate monetary and macroeconomic policies along with robust domestic demand, the emerging economies in Asia demonstrate resilience and continue to attract direct investment from foreign countries.

(Sources: UniCredit, IMF, ECLAC, Asian Development Banks & IHS Markit, LinkedIn, IHS Markit, HSBC Global Research, 2023)

The Global Job Market is Spectating – Slow Hiring and Labor Shortages Coexist

Despite the recent global slowdown in recruitment, the labor market has displayed resilience. In various countries, the average number of job vacancies per job seeker remains higher than before the pandemic, and the unemployment rate is reaching historically low levels. But due to economic uncertainty, companies around the world have reduced their hiring efforts. At the same time, labor shortages have emerged in multiple countries, causing employers competing for a limited pool of workers. As a result, there is increased pressure for wage increases and tight labor market conditions.

Taiwan’s Q2 Job Market Conditions are Generally Stagnant

Traditionally, Q2 is the peak season for recruitment. This year, however, recruitment activities across industries have generally slowed down. Companies are taking a more conservative approach in their hiring decisions after considering financial performances and evaluating actual demands, and different industries have experienced varying situations.

In logistics, technology, and software industries, the employment market is reaching saturation. Logistics companies are scrutinizing talent more thoroughly and comprehensively, leading to prolonged recruitment processes due to increased workload after pandemic restrictions were lifted. Job seekers with senior experience have taken a more cautious approach due to a perceived weak market demand. On the other hand, the technology industry went through a phase of aggressively hiring high-salaried professionals over the past year and a half. They are still in the process of adjusting their workforce after facing massive layoffs. Similarly, the software industry faced a severe labor shortage in Q4 of 2022, followed by a significant surge in job openings. In Q2 of this year, it has gradually moved towards a balance of supply and demand, resulting in a slowdown in recruiting activities.

As for the semiconductor industry, both international giants and domestic Taiwanese companies are facing a decline in capacity utilization rates and delayed investment cases, leading to decreased recruitment demand. According to statistics from job banks, the demand for IC design engineers in Q2 of 2023 has decreased by approximately 10-15% compared to the same period in 2022. However, the semiconductor industry has not experienced widespread layoffs or a frenzy of job seeking in the electronic terminal and software sectors.

Moreover, in the manufacturing industry, many multinational companies had already set their annual recruitment plans at the beginning of the year, so there won’t be significant changes by mid-year. Additionally, due to the stagnant global economic growth this year, the manufacturing industry lacks upward momentum and will not consider releasing job vacancies in Q2 to avoid increasing costs.

Emerging Industries Drive Job Growth Against the Downtrend, Imbalanced Supply and Demand Pose Hidden Concerns

In the midst of an overall sluggish employment market, several industries have emerged as strong contenders. These include retail, e-commerce, fast-moving consumer goods, advertising, online streaming, AI, ESG (environmental, social, and corporate governance), and the energy sector, particularly green energy. Many companies are currently focusing on AI-related positions and investing in equipment allocation for AI development. Brands are actively investing in ESG and green energy applications, which are crucial for their image positioning and sustainable operations. There is a growing demand for professionals familiar with ESG regulations, leading to the formation of small ESG teams within companies. Although the team size is usually small, with only one or two members, the demand for such positions is expected to continue. As for the energy sector, it benefits from the thriving global sustainable energy industry. Companies are competing for green initiatives, and the wind power and solar energy industries are driving the transformation of manufacturing and technology talent, investing in emerging businesses such as energy storage. Prospects for these industries are also promising.

In addition, non-mainstream products in the semiconductor industry, such as industrial semiconductors (AI and AIoT automation) and automotive semiconductors, have not experienced a simultaneous decline in market demand and recruitment needs. The demand for positions related to industrial and automotive IC design, quality assurance, and manufacturing continues to grow against the trend. Additionally, there are potential opportunities in areas like data analysis, prediction, virtual reality (VR), and augmented reality (AR) applications in education, entertainment, healthcare, and related industries.

However, certain industries such as healthcare and automotive parts where job vacancies exist due to high market demand, but an imbalanced supply and demand condition leads to a talent gap. For example, in the healthcare sector, nursing staff is in high demand due to Taiwan’s aging society. However, factors such as high-intensity on-site work, long hours, and low wages discourage job seekers, highlighting the need for appropriate measures to address this hidden concern.

People Seeking Jobs: The Key is “Immediate Productivity” – Meanwhile, Jobs are Seeking AI Empowerment and Digitalization Transformation

According to Adecco’s observations, in Q2, businesses with recruitment plans mostly sought highly experienced individuals who can contribute themselves immediately. Companies are reluctant to invest in training new recruits due to cost considerations.

The development of immediate productivity relies not only on accumulated experience but also on the job seekers’ self-awareness and efforts. Job seekers should consider enrolling in various courses to enhance their skills, especially in the current AI era, where digital skills are highly valued. Understanding the ongoing transformations in high-tech products may require additional skills in data analysis, thus possess a competitive edge that distinguishes them from other candidates.

From the companies’ perspective, now the main focus is to enhance efficiency and create greater value through AI. Therefore, they must empower themselves just like job seekers. If resources permit, strengthening digital transformation can lead companies onto the path of comprehensive digitization, enabling them to integrate with AI intelligence for future development. Processing big data can provide intelligent analysis, and leveraging AI technology to develop automation tools and processes can enhance a company’s capabilities and efficiency.

Moreover, improving language proficiency is also of urgent importance. Taking the software industry as an example, software engineers in Taiwan are highly competent and in demand in the labor market. Apart from their skills, Taiwan’s salary levels are generally lower, making Taiwanese engineers relatively more cost-effective for the international market. However, a common weakness is their average or below-average English proficiency.

Q3 Job Market Trends: Leaning Towards Conservatism while Focusing on Proactive Planning

Due to declining foreign direct investment (FDI) in Taiwan and geopolitical complexities, the impact of economic development in China and other populous countries in the Asia-Pacific region on Taiwan varies across industries. Most industry consultants at Adecco believe that in Q3, Taiwan’s job market will be a mixture of conservatism and optimism. The industry expects economic recovery to occur in Q1 of 2024, thus Adecco advises business owners to carefully monitor industry changes in order to stay ahead of the curve, be prepared for the future, and formulate early strategic plans.

Regarding job seekers’ response to the current environment and job market changes, Adecco recommends maintaining a proactive and optimistic attitude, be patient and wait for the next 4-6 months, while also observing industry changes, enhancing their skillsets, and exploring various opportunities. Adecco consultants also emphasize the importance of carefully selecting trustworthy headhunters for both companies and job seekers. In the market, particularly in energy industries, there are cases where headhunter companies disregard data privacy laws and treat job seekers as commodities. They don’t consider whether the qualifications match the requirements; as long as there is a slight connection, they will leak the personal information without informing the parties involved. This not only imposes unnecessary burdens on the human resources departments of clients but also violates the rights of job seekers.