TAIPEI (Taiwan News) -- Companies in Taiwan will give an average year-end bonus of 1.27 months of pay for Lunar New Year, a 0.07 month drop from the previous year, according the results of survey by online job bank 1111 released on Monday.
According to the survey, 83 percent of companies are planing to give an average year-end bonus worth 1.27 months of salary, which represents a decrease of 0.07 months from the 1.34 months handed out in 2017. More than half of companies surveyed said their profits were flat in 2018, 26.9 percent reported worse profits than the previous year, and only 21.72 recorded an increase in profits over 2017.
Traditionally, "red envelopes" (紅包, hongbao) with money inserted inside are given as gifts for special occasions in Taiwan, as well as China, overseas Chinese communities, and many other East Asian nations, especially during Lunar New Year. In Taiwan, just before the start of the Lunar New Year holiday, companies customarily hand out year-end bonuses worth a certain multiple of monthly pay packed inside these red envelopes.
The IT industry offered the fattest red envelopes of the 10 industries polled, with an average of 1.99 months of salary, while the financial industry ranked second at 1.35 months. The bottom two spots were filled by media/publishing in ninth place at 1.04 months and real estate in dead last, at a meager 0.98 months.
Daniel Lee (李大華), head of 1111 job bank's career development and public relations division, said that the domestic market reversed its strong gains from the previous year. More than one in four companies thought their profits in 2018 were worse than 2017.
Various economic data surveys point to a relatively conservative level of economic growth for 2019, and combined with the "black swan" impact of the trade war, many Taiwanese companies have a pessimistic outlook for the year ahead.
The IT industry was the most generous this year, with most companies giving 14 months of guaranteed annual salary and a year-end bonus of 1.99 months, according to Lee. Lee added that many companies have started to recruit new talent for their wafer and memory factories.
In second place were finance-related businesses, including financial holding companies, insurance brokerages, and accounting companies. Lee said that although the financial sector made a good profit last year, it suffered exchange rate shocks over the last two months, resulting in a significant increase in losses, causing the "Year-end King" to fall off its throne.
At the bottom of the list is the real estate sector, which has been hit hard by the overall downturn in the housing market, with 700 real estate firms going belly up over the past three years. As a result, the year-end bonuses in the industry are much lower than before, said Lee.
The 1111 survey shows that the key considerations for year-end bonuses are personal performance, followed by employee seniority. More than 60 percent of companies will provide such bonuses one week before the Lunar New Year holiday.
However, 16.55 percent of enterprises this year will not give out bonuses due to poor operations and profits (29.17 percent), no plans to hand out year-end bonuses (25 percent), and use of a different bonus system (12.5 percent).