The comparative study:
Enterprise training and Enterprise training determinants in
the Netherlands and Taiwan
Master thesis Hsu, Fang Chi
Student number: 1659677
Supervisor: Peter van der Meer Karin S Prins
Faculty of Management and Organization Human Resource Management
Content Abstract... 3 -1. Introduction ... - 4 - 1.1 Background ... - 4 - 1.2 Research question... 5 -2. Theory review ... - 7 -
2.1 Human capital theory ... - 7 -
2.2 Investment of training ... - 8 -
2.3 The literature on enterprise training determinants ... 10
-3. Methodology ... - 15 -
3.1 The data source ... 15
-4. The investment of enterprise training in the Netherlands and Taiwan ... - 16 -
4.1 The general description of the Netherlands and Taiwan ... - 16 -
4.2 The investment of enterprise training ... 18
-5. Data comparisons in the Netherlands and Taiwan ... - 19 -
5.1 Enterprise training determinants in the Netherlands and Taiwan ... - 19 -
Abstract
Enterprise training could enhance the value of human capital in the company and improve the productivity of company. Except for the costs, benefits, external environment and company strategy, there are certain factors govern the possibilities of company to train the employees. Those factors are the enterprise training determinants. The present paper investigates the relationship between enterprise training and enterprise training determinants in the Netherlands and Taiwan. Through the comparison of the national level data from both countries, this paper could draw the conclusion: although Taiwan holds better condition of enterprise training determinants, there are more enterprise trainings happening in the Netherlands than Taiwan. Undoubtedly, there are more other enterprise training determinants than mentioned from previous researches. The general level of development and the government intervention may be two of the other factors which affect the existence of enterprise training.
Keywords: human capital, enterprise training determinants, the Netherlands and Taiwan
1. Introduction
1.1 Background
Nowadays, companies focus on establishing and reinforcing the competitive advantage in this fast changing global market. One of the key factors attributes to maintain the leading status of companies is the availability of high quality human capital.
Human capital is indeed one of the crucial factors for increasing the organizational productivity, and it’s also the central of the development of country, and the prosperity of the society. The enhancement of the quality of human capital could be achieved by the attainment of formal education and enterprise training. Normally, the formal education is regulated by the government and the enterprise training is a strategic human resource management decision of organization.
1.2 Research question
The purpose of this paper is to analyze the relationship of enterprise training determinants and enterprise training in different countries. According to the previous research, the existence and amounts of enterprise training could be determined by the enterprise training determinants. Hence, it implies that the company in the country with better condition of enterprise training determinants would offer more enterprise training than others. In this paper, because of the two similar country characteristics, the Netherlands and Taiwan has been chosen to be compared in this paper.
First, the Netherlands and Taiwan are both small but located between big countries. Small as the Netherlands and Taiwan endeavor to survive among the powerful and big surrounding countries. Refers to the location, the Netherlands locates the northwestern European between Germany, France, and Great Britain; Taiwan is an small island in the East Asia, shares the coast with mainland China and Japan.
Second, the sector share in percentage of GDP of these two countries is similar. The composition of industry by sector shares reflects the economic development level of country. According to the 2006 estimated data (see Table 2); the Netherlands and Taiwan have a similar structure of industry composition. Service sector comprises the main part of the industry which contributes over 73% of both countries. Moreover, the compositions of the enterprises for both countries are mainly comprised by small-medium sized employers (SMEs) as well. SMEs account for over 97% of companies in both countries. Hence, they need more and higher level skills of employees to meet the growing challenge from overseas competitors in the world markets. In this respect, both countries focus on creating high value-added products, offering professional service and tend to invest more on enterprise training.
Research question:
A comparative study: what is the relationship between enterprise training determinants and enterprise training in the Netherlands and Taiwan?
In order to answer the research question, some information needs to be gathered. It is, therefore, essential to extend the research question further into four sub questions.
1. What are the enterprise training determinants provided by the previous literatures? (Chapter 2)
2. What is the methodology approaches used in this thesis? (Chapter 3)
3. What does the country of the Netherlands and Taiwan, in general, look like? (Chapter 4)
4. What is the situation of the enterprise training in the Netherlands and Taiwan? (Chapter 4)
5. What is the data of enterprise training determinant and the differences or similarities of enterprise training determinants between the Netherlands and Taiwan? (Chapter 5)
2. Theory review
This chapter discusses the applicable theory as the foundation to answer the research question. In paragraph 2.1, human capital theory defines human capital as a valuable asset in the labor market; paragraph 2.2 interprets the human capital investment, the cost-sharing process and the impact of enterprise training toward the turnover rate; paragraph 2.3 offers the indicators of enterprise training determinants and the training determinants in the different countries.
2.1 Human capital theory
Personnel Economics adopts the economic basic theory to analyze the issues of human resource management, is a new subject stems from Labor Economics Human Capital. Theory is one of the fundamental theories of Personnel Economics (Lazear, 2003). Human capital theory regards the quality of employee like capacity, know-how, profession skills of an employee as valuable and trainable asset for the company.
Schultz (1961) has asserted that investments in education would enhance the quality of human capital and later yield returns in both individual financial profit and national economic growths. Examples of national economic growth are the enhancement of national productivity, national competitiveness, national comparative advantage and social profit. Since 1961, there are many researchers have enriched the content of Human capital theory and focused on the relationship between human capital and education, enterprise training and tenure. Other inside factors like value, behavior and attitude of employee’s are as well as considered.
2.2 Investment of training
According to the human capital theory, enterprise training is the most used way to improve and update employee’s abilities, except for formal academic education. The benefit of training could contribute on both individual and business dimensions (Zwick 2002, Tessin, 1978 and Hall, 1986). For individual, the training could decrease mobility and turnover, enrich the diversity of capacities, stimulate the communication between employees, build confidence of employees, help employees to react to the pressure of work and enhance employees’ ability of solving problems and increase the wage level of the trainees (Bassanini et al. 2005, Franzis 1998 and Loewenstein 1998). On the other hand, for the company, training could shape the image of organization, make employee understand organizational objectives and missions, increase commitment, assist employee to encounter change challenge and increase productivity and profit. (Tan and Batra, 1995; OECD, 2005)
There are two approaches to train employees, one is general training; the other is firm specific training. For the former, employee gains the generic knowledge which may be used in other firms as the training of general core competence, MBA, IT engineer, etc.; on the other hand, firm-specific training is only fixed in one firm which is impossible to be transferred in other firms. Thus, namely, the investment of general training is incurred by workers, whereas the investment of firm-specific training is paid by the firms or shared with both parties.
If the human capital theory is true, firms would only pay for the firm-specific training. However- this is a big however- how could we explain some firms still pay for the general training? Hence, human resource management theory, on the other hand, regards training as part of strategies to increase employees’ commitment to the firm and build up organizational image. Baron and Kreps (1999) offer three obvious phenomena to explain why firms would like to incur the general training. The first two phenomena are objective factors which have directly impact to the firm sponsored general training. The last one describes the change of employee’s behaviors and attitudes after being trained.
(1) the lack of worker’s skills
(2) the complements to other skills
Employer could gain the most of return after paying for the general training when employers could combine what they have learned with firm-specific skills. In other words, employers are more motivated to learn when they can apply the general skills to their current jobs.
(3) Change the behavior and attitude of employee
General training could send signals to others and reinforce organizational culture. Providing general training sends signal to employees, potential employees, customers and suppliers. For employees, general training sometimes is a benefit and gift from employers showing the intention and assurance to build up longer employment relationship with trained employees; firms could attract the most ambitious to be trained applicants in the labor market; highlight training could also shape good image in front of the related stakeholders. Furthermore, increasing the understanding of organizational culture and strategy is crucial for employers to enhance the commitment of employees.
According to previous researches, there are two issues which are most discussed about the enterprise training:
2.2.1 The cost-sharing between employee and employer
The benefit of general training could exist for the remaining working life of employee. However, the benefit of firm-specific training could only affect the duration of current job. In this respect, namely, the investment of general training is incurred by workers, but the payment of firm-specific training investment is more complicated. In the theory, Becker (1975) suggests that once the sharing of firm-specific training investment is financed by both firm and worker, they are likely to have more mutual commitment and stay longer in the current firm. Hashimoto (1985) constructs the model to decide the cost-sharing rate of firm specific training. When there are transaction cost and incomplete information between employee and employer, they would share cost and return to decrease the inefficiency loss from the termination of the contract.
2.2.2 The impact of training to turnover rate
Considering the uncertain turnover possibilities of trained employees, the impact of training to mobility is also a more discussed issue. Mincer (1988) indicates that an extra year of training could lead to decrease the turnover rate. Green, Felstead, Mayhew and Alan Pack, (2000) state that “training is more likely to lead to lower mobility when it is less transferable to other firms, is sponsored by firms, and where its objectives include increasing the identification of employees with corporate objectives.” They also conducted survey involved both the employees and employers in Britain which they found out when worker has general training, there is 21.7% of likelihood to search other jobs compared with only 5.7% after receiving firm-specific training.
Theoretically, when training is sponsored by firms or more firm-specific, the more possibilities to decrease the quits form employees and layoffs from employers before both parties realize the return of their shared investment of training. Moreover, when employee receives more specific training from firm, he is less likely to alter his job while he doesn’t want to waste his investment and give up the gain particularly from current firm after being trained.
On the other hand, from employer’s point of view, firms with less employee mobility would tend to offer more firm specific training due to the assurance of the remaining of trained employees and would likely to pay for higher salary to maintain the trained employees.
2.3 The literature on enterprise training determinants
Enterprise training is a strategic decision of the company while company would consider the relative costs and returns of enterprise training, the availability of grants and tax-reduced programs offering by the government. There are several factors which may affect the employer’s training decision making process. Based on previous researches, this paper categorizes three main dimensions about the factors govern the enterprise training determinants.
(1) Unchangeable individual characteristic: the age and the gender of employee.
(2) Changeable individual characteristic: includes the education level, the work experience, the marital status, the position, the participation of union and the turnover rate.
Generally speaking, enterprise training is positive related with education level, married, large size of company, low turnover rate and R&D investment; while training have inverse relationship with age, the ratio of female workers, the participation of union, higher proportions of part-time workers (Mincer, 1988 and Zeufack 1999). However, it may be due to the differences of gathering sample or research measurement approaches; sometimes, we may find out inconsistent conclusions from different researches in the empirical level. In this way, this paper collects the summary from previous researches and aims at discussing the enterprise training determinant listed in Table 1 in the following paragraph.
Table1: Main findings from the literature review on the enterprise training determinant
Variable type Variable List Effect of the
training
Age (older) -
Unchangeable individual
characteristic Ratio of female workers -
High Education level +
Participation of union +
Changeable individual characteristic
Low Turnover rate +
SMEs -
R&D investment +
firm characteristic
More Part-time workers -
Source: Mincer (1988); Tan and Batra (1995); Frazis, Harley J., Maury Gittleman, Michael Horrigan, and Mary Joyce (1998); Zeufack (1999); Green, F. et al (2000)
The next section first reviews the previous researches of enterprise training determinants in the developed and early stage of developed country, afterwards, make the comparison between the Netherlands and Taiwan.
2.3.1 Enterprise training determinants in developed country
According to the definition of World Bank and International Monetary Fund (IMF), a developed country has a high income per capita, high Human Development Index (HDI) and high gross domestic product (GDP) per capita. In general, Japan in Asia, Canada and the United States in North America, Australia and New Zealand, Western Europe and Southern African Customs Union are considered "developed" regions or areas.
females; higher educated employee receive more enterprise training, perhaps due to they are easier to be trained and cost less then lower educated worker (Lynch and Black, 1995). However, Steven (1994) also interprets enterprise training is largely determined by the national education system. Enterprise training is highly combined with education system in Germany through its remarkable apprenticeship scheme. Students over 15 years old could choose to follow either academic or vocational path. In the vocational path, students could learn skills within firms and get certifications of certain professional techniques. The apprenticeship scheme minimums the gap between school and real society. Refers to Japan, it’s another story. Education system is more university-oriented in Japan where students should take a very competitive exam to entry the most prestigious university. Degree from the most prestigious university could make assurance of successful career. However, about the benefit of education, Wolf (2003) asserts another opinion. Although individual does gain benefit from receiving education, the more high education may not lead to the economic growth. Because when everyone obtains more and more education, students may be overeducated.
The low employee turnover could increase the likelihood of firm to offer training; at the same time, the training itself may contribute to decrease the turnover. As Alba-Ramirez (1994) uses Spanish data to prove that employee are likely to receive training when their mobility rate is lower. Whereas long-term employment relationship is main stream in Japan, it provides powerful reason for employers to train employees (Dore & Sako, 1989). Hashimoto (1985) also conclude that due to the lower job mobility rate and the rather independent technical skills used in Japanese companies, trainings in Japan are inherently firm-specific and higher than US. The existence of high participation of union could lead to more enterprise training. Union could represent for labours to make the “collective bargaining agreements” with employers, thus ask for more enterprise training (Frazis, et al, 1998).
The sort of job contract could also affect the training. Full-time workers have more training rather then part-time workers. This may be due to the shorter working time, less training return from the part-time workers.
The investment of Research and experimental development (R&D) is a crucial input indicator (Hitt et al., 1997) to increase the stock of employee’s knowledge, use the stock of knowledge to devise new applications and measure firm’s innovative performance. Enos (1962) indicates firms with more investment of R&D are more likely to train employees, while those firms expect rapidly update and improvement of employee’s skills.
2.3.2 Enterprise training determinants in the early stage of developed country
The Asian tiger are the first four countries to be recognized as newly industrialized countries- Hong Kong, South Korea, Singapore, and Taiwan. Those countries usually have rapid economic growth and export-oriented economic patterns which attract many foreign financial investments and devote to develop the high-technology industries in the 1970s and 1980s. However, with high economic development, the Asian Tiger have gradually transferred from the developing and newly industrialized country to be the developed country.
from government, training in Germany is more firm-specific than Taiwan. Because of the design of German apprenticeship system, employees are trained exactly inside the business. In this way, although Taiwanese Public Vocational Training Centers could obtain the economic scale to offer enterprise training, it may not fully fulfill the training demand of each company.
After checking carefully, there are few studies about training determinants in the early stage of developed country. The only research, of which the author is aware of, that covers the training determinants in Taiwan is provided by Ashton, et al (2002) They conduct the research about the training investments of five developing countries: Colombia, Indonesia, Malaysia, Mexico, and Taiwan. They concluded that firms are more likely to train when they are large, employ an educated and skilled workforce, invest in R&D and technology licenses, emphasize quality control methods, have foreign capital participation, and export to foreign markets.
Based on above discussion, this paper could draw up the conclusion that enterprise training determinants are surprisingly similar in the developed countries and early stage of developed country. Hence, this paper is allowed to compare the Netherlands and Taiwan base on this principle.
2.3.3 Enterprise training determinants in the Netherlands and Taiwan
The results from Oosterbeek (1996) and ‘the 2005 Employment and Vocational Training Survey’ have proved in line with previous research in different countries.
3. Methodology
The following chapter helps to establish a plan on how to tackle the research question stated in the previous chapter.
3.1 The data source
This paper uses the national statistical data to make the comparison between the Netherlands and Taiwan. The national statistical data could reveal the picture of enterprise training in those two countries. Relevant information and data are gathered from the national authorities.
3.1.1 The Netherlands
The data of the Netherlands are gathered by the central bureau of statistics (CBS, Statistics Netherlands, www.cbs.nl) which collect and estimate Labour Force Survey based on the yearly averages. Labour Force Survey is a sample survey among Dutch residents aged between 15 and 64 years and excluding persons in homes and institutions in order to provide the current, national, representative data of the Netherlands.
3.1.2 Taiwan
There are two data resources used in this paper about Taiwan.
First, ‘The 2006 Manpower Survey’ is from Directorate General of Budget, Accounting and Statistics (DGBAS) of Executive Yuan of Taiwan. DGBAS is the government organization which carries out and publishes the Manpower Survey. The content of Manpower Survey is about the employment status of labor force, labor mobility and unemployment which could also perceive the developing trend of manpower. The Survey sampled the person who is over 15-year-old and living in Taiwan on the first week of May each year. Data from Manpower Survey is used as general perceptions of Taiwan in this paper.
4. The investment of enterprise training in the Netherlands and Taiwan
In order to further discover the research question, there is a need to investigate the basic country background of these two countries, the Netherlands and Taiwan. In this chapter, a general description will be given of these two countries. Furthermore, section 4.2 discusses the investment of enterprise training in the two countries. Therefore, this chapter will answer the third and forth sub research question.
4.1 The general description of the Netherlands and Taiwan
The Netherlands and Taiwan share a long and tide trade relationship since 400 years ago. The Netherlands is the 10th biggest trade partner of Taiwan. Among European countries, the Netherlands invest the most in Taiwan.
4.1.1 Taiwan
Although Taiwan is small, scarcity of natural resource and with high density of population, Taiwanese gross domestic product (GDP) of US$355,708 millions is
the world’s 22nd largest trader in 2006. During the past five decades, Taiwan becomes the fast economic growing paradigm. Per capita GDP has increased from US$142 to US$16,030 from 1956 to 2006 and the average economic growth rate of Taiwan is 8.3% (DGBAS) for the past fifty years. The economic structure has already gradually moved from labor intensity industry to the high tech industry. Service sector has already taken more then 70% in the shares of GDP.
This economic miracle stems from the development of high technology and the small-medium size enterprises (SMEs). Taiwan is noted as a high technology island. The semiconductor foundry and LCD panel industry are the leaders accounting for over 50 percentages in the global market (industrial development bureau ministry of economic affairs, 2007). SMEs play an important role in the dramatically economic growth of Taiwan which provide the rapidly reaction to the competitive global market.
4.1.2 The Netherlands
well. The Rhine and Meuse flow through Switzerland Germany, France, Luxemburg, Belgium and Netherlands before drain into the North Sea from the Netherlands.
Second, the Netherlands is the distribution center of Europe. The Netherlands devote to construct the transportation facilities in order to make the most use of its great location. The airport, port, waterway and railway wave the convenient network which allows the Netherlands could transfer products faster then other countries.
Third, the high quality and flexibility of human capital, Dutch are remarkable for the multi language skills and the flexible labors. Most of Dutch could speak fluently English, Germany and French. Although the great amount of part-time workers is one of the negative enterprise training determinants, it’s a crucial advantage of the development in the Netherlands. The flexible employment contract would allow employer to have more time to consider the potential and qualification of employer and afterwards make the permanently hiring decision.
Table 2 lists some of basic country background of the Netherlands and Taiwan.
Table 2: the country background of the Netherlands and Taiwan (2006)
Source: DGBAS, CBS
The Netherlands Taiwan
Area –total 41,526 km² 35,980km2
Population 16,150,511 (July, 2006) 22,880,454 (March, 2007)
Official languages Dutch Mandarin
GDP (Total) $663,119 millions (16th ) $355,708 millions (22nd )
GDP (per capita) $ 38,580 (2005) $ 16,030 (2006)
Labor force in total 7,074,000 10,064,000
4.2 The investment of enterprise training
Table 3 lists the current situation of enterprise training in the Netherlands and Taiwan. The latest Dutch data offered by CBS is in 1999. There are 1,559,000 employees receiving employer sponsored training and the training expenditure per employee is 810 Euro. In 1999, there are 71.2 percent of men and 28.8 percent of women did receive training.
According to Taiwanese 2005 Vocational Training Survey, among the sample of 1,729 companies, there are 72.4% of companies did offer enterprise training. There are 63.7 percent of men and 36.3 percent of women to be trained. Moreover, Taiwanese data lacks of information about the expenditure of employer sponsored training.
Overall, because there are more population and employed labor force in Taiwan, the absolute and relative numbers of trained employees are less in Taiwan then in the Netherlands.
Table 3: Employer sponsored training in the Netherlands and Taiwan The Netherlands
1999
Taiwan 2005
Employees with courses 1,559,000 1,090,745
Employed labor (2006) 7,074,000 10,064,000
Employees with courses (% total employed labor)
22% 10.83%
Men (Total in %) 1,110,000 (71.2%) 695,285 (63.7%)
Women (Total in %) 449,000 (28.8%) 395,460 (36.3%)
Total expenditures(euro) 3088 ---
Expenditures in % of labor costs 2,7% ---
Expenditure per employee(euro) 810 ---
Average expenditure (euro) --- 38,755
Source: CBS, Directorate General of Budget, Accounting and Statistics (DGBAS) of Executive Yuan, 2005 Vocational Training Survey, the Bureau of Employment and Vocational Training.
5. Data comparisons in the Netherlands and Taiwan
Section 5.1 lists the comparisons of enterprise training determinants in the Netherlands and Taiwan. Following, section 5.1.1, 5.1.2 and 5.1.3 compare and elaborate the enterprise training determinants in the Netherlands and Taiwan. Refers to the further information, as shown in appendix, has been used in this chapter.
5.1 Enterprise training determinants in the Netherlands and Taiwan
In the Netherlands, the year of 2006, the employed labor force is 7,074,000 in total; there are 3,034,000 (42.9%) female employees; 1,740,000 (28.1%) 35-44 years old employees; 2,269,000 (31.8%) of employee with HBO, college and above degree; 1,898,700(24.4%) employees participating in the union; 406,000(5.7%) employees have changed jobs which means that they got a full-time job within three months after quitting the previous one; there are 743,000 enterprises in total which SMEs account for (99.7%); the number of employees who work less than 35 hours per week is 2,624,000 (37.1%) people.
Table 4: the training determinants of the Netherlands and Taiwan (2006)
Variable List the Netherlands Taiwan
Female worker ratio (%) 42.9% 42.4%
Employee age (35-44 years old, %) 28.1% 30 %
High Education and above (%) 31.8 % 36.3 %
Participation of union (%) 24.4 % 29.6 %
Turnover rate (%) 5.7 % 6.1 %
SMEs (%) 99.7% 97.8%
R&D expenditure as a percentage of GDP(2004) 1.78% 2.44%
Part-time workers (%) 37.1% 2.5%
Source:
(1) The Netherlands: www.cbs.nl, www.MKB.nl
(2) Taiwan: Directorate General of Budget, Accounting and Statistics (DGBAS) of Executive Yuan Based on above figure, the following section aims at discussing the impact of three main indicators to enterprise training in the Netherlands and Taiwan.
5.1.1 Unchangeable individual characteristic in the Netherlands and Taiwan
The labour force of a country is combined by the unemployed and the employed population. According to the Dutch definition, the employed labour force includes all the people who work for more than twelve hours or above per week; whereas the unemployed labour force includes all unemployed persons and people working less than twelve hours a week. As Taiwan, the content of employed labour force is the people who have a job even he works less than 12 hours per week. After noticing the difference between the Netherlands and Taiwan, this paper uses the employed labour force as the comparison base to compare the training determinants of the two countries.
Table 5: Employed labour force in absolute number (x1, 000) and percentage
The Netherlands Taiwan
Year 2004 2005 2006 2004 2005 2006 Man 4019 3981 4040 5669 5752 5798 Women 2899 2937 3034 4094 4166 4266 Total 6918 6918 7074 9763 9918 10064 Man 58.1% 57.5% 57.1% 58.1% 58.0% 57.6% Women 41.9% 42.5% 42.9% 41.9% 42.0% 42.4% Source: (1) The Netherlands: www.cbs.nl
(2) Taiwan: Directorate General of Budget, Accounting and Statistics (DGBAS) of Executive Yuan
As the age composition, both countries are mainly comprised by the 35 to 44 years old employees that almost higher than 30% in total employed labor force. Note: due to the age data this paper used, the enterprise training determinant of age change to be a positive indicator of enterprise training. In other words, the more young people, there are more lenterprise training.
Table 6: Employee Age in percentage
The Netherlands Taiwan
Age 2004 2005 2006 2004 2005 2006 15-24 12.0% 11.8% 11.8% 10.2% 9.5% 8.8% 25-34 26.5% 26.0% 25.2% 29.6% 29.6% 29.9% 35-44 28.2% 28.3% 28.1% 30.4% 30.1% 30.0% 45-54 23.5% 23.7% 24.1% 22.7% 23.3% 23.6% 55-64 9.7% 10.2% 10.9% 7.2% 7.5% 7.7% Total 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% Source: (1) The Netherlands: www.cbs.nl
(2) Taiwan: Directorate General of Budget, Accounting and Statistics (DGBAS) of Executive Yuan 5.1.2 Changeable individual characteristic in the Netherlands and Taiwan
the junior high school for the students between 13-15 years old; medium is senior high school for the students between 16-18 years old; high education is college, university and above.
Table 7 reports that the Netherlands and Taiwan both have over 30% of high educated labor force. As a whole, there are more employees with high education attainment in Taiwan.
Table 7: education level in percentage
The Netherlands Taiwan
Year 2004 2005 2006 2004 2005 2006 Low 24.6% 23.5% 23.3% 30.8% 29.3% 27.6% Medium 42.7% 44.2% 44.3% 36.7% 36.3% 36.1% High 32.1% 31.9% 31.8% 32.5% 34.3% 36.3% Source: (1) The Netherlands: www.cbs.nl
(2) Taiwan: Directorate General of Budget, Accounting and Statistics (DGBAS) of Executive Yuan
Taiwanese workers have 29.6% of union participation which is higher then the 24.39% of the Netherlands. The higher participation of union in the firms, the more training would offer from the firm.
Table 8: participation of union in absolute number and percentage
The Netherlands Taiwan
Year 2006 2006
People 1,898,700 2,978,973
Percentage 24.4% 29.6%
Source:
(1) The Netherlands: www.cbs.nl
In 2006, employees in Taiwan had 6.1 % turnover rate which higher then the 5.7 % of the Netherlands. Note that the Dutch number also are excluded the workers who work less than 12 hours per week. Hence, the Netherlands may prefer to offer more enterprise training.
Table 9: employee turnover in percentage
The Netherlands Taiwan
Year 2004 2005 2006 2004 2005 2006
Job Changer (%) 5.1% 4.9% 5.7% 6.8% 6.1% 6.1% Source:
(1) The Netherlands: www.cbs.nl
(2) Taiwan: Directorate General of Budget, Accounting and Statistics (DGBAS) of Executive Yuan 5.1.3 Firm characteristic in the Netherlands and Taiwan
As noted above, big enterprises are more likely to offer training for employees rather than SMEs. However, there are high percentage of small-medium
enterprises (SMEs) in the Netherlands and Taiwan.
The definition of SMEs varied from countries. In the Netherlands and most of European countries, the definition of small company is the company with less then 50 employees; medium-sized company refers to 50-250 employees and large companies have more than 250 employees. In 2005, there were 743,000 companies in the Netherlands, over 99% of them are SMEs; large firms only account for 0.2%. In Taiwan, the SMEs represent of the company which employer is less than 200 people in the industry sector and less than 50 people in the service sector. There are 1226,000 of SMEs which account for 97.8% among the whole enterprises.
Thus, there are only 26 percent of employees did receive training courses in small companies; while training is almost 46 percent in the companies with more than 500 employees in the Netherlands (CBS, 2006). Dutch government strives to encourage the development of human resource management in SMEs, such as the programme Profijt van MensenKennis of the Syntens organisation which includes the training on the job and offer advice for managers.
conduct the training investment, the SMEs in Taiwan namely still compete with price using cheaper labor to compress cost in the market. In this way, the Public Vocational Training Center have faced the challenges of delivering diversity of technical skills to keep increasing levels of sophistication labor market.
The science and technology indicators of countries have exhibited the potential growth of national science, such as the R&D investment and the researchers per 1,000 populations in the country. However, if we compare the total investment of R&D, we will ignore the size difference of countries. In this respect, it’s normal to compare the percentage of R&D investment in the GDP. In Taiwan, R&D investment as a percentage of GDP reached 2.44% in 2004, in the Netherlands, it is 1.78%. In the same year, there were 5.7 researchers per 1000 of the population in Taiwan and 5.5 in the Netherlands (2001). This may refer to that Taiwan is more likely to train the employees.
Table 10: Gross R&D expenditure for certain countries in 2004
Item R&D total investment
(Million $ US) Gross R&D investment (%GDP) Researchers per 1,000 population Taiwan 15,089.7 2.44 5.7 The Netherlands 9,583 1.78 5.5(2001) Japan 118,026.3 3.13 9.7(1997) Us 312,535.4 2.68 8.1 Germany 59,115 2.49 6.0 S. Korea 28,288.4 2.85 4.6
Source: DGBS, Taiwanese main science and technology indicators, OECD
In order to decrease the labor, production and management cost, firm start to search varieties of approaches to make the most use of manpower, such as the part-time worker, seasonal worker, temporary agency, outsourcing, dispatch worker and fixed-term contract. In this respect, firm could get rid of the burden of benefit and pension cost in the future and part-time workers also can have more free time. Both parties have more flexibility then before.
works between 12 and 34 hours a week; whereas the latter argues part-time job is working less then 40 hours weekly.
According to the analysis mentioned above and Table 11, the percentage of people working as part-time jobs is extremely high in the Netherlands. In 2005, the average of part-time workers in the European Union is18 percent; while in the Netherlands, almost 40% of employed labor force working less than 35 hours a week. Nearly 75 percent of part-time workers are women in 2005 in the Netherlands; while the average is 33 percent of European Union (CBS). As a result, when the Netherlands have more part-time workers then Taiwan, the Netherlands would be less likely to train the employees.
Table11: part-time worker in percentage
The Netherlands Taiwan
Year 2004 2005 2006 2006
Part-time worker 36.1% 37.0% 37.1% 2.5%
Source:
(1) The Netherlands: www.cbs.nl
(2) Taiwan: Directorate General of Budget, Accounting and Statistics (DGBAS) of Executive Yuan
6. Conclusions and discussion
Among the five positive indicators of the enterprise training determinants, Taiwan has higher figures then the Netherlands only with the exception of the turnover rate. There are more young and high educated employees, higher participation rate of union and more R&D investment in Taiwan. Refers to the rest of the determinants which are negatively relevant with enterprise training, the number of female workers, SMEs and part-time workers are less in Taiwan then in the Netherlands. Furthermore, most of figures of the enterprise training determinants of both countries don’t exist tremendously difference except for the percentage of part-time workers.
However, as mentioned on Table 3, the Dutch companies do offer more employer sponsored training then Taiwanese. On the other hand, it has shown that the enterprise training determinants discussed in this paper may not completely reflect how does enterprise training looks like in the country. As a result, it implies that there are other factors may affect the enterprise training in Taiwan and the Netherlands.
First, the general level of development in the Netherlands and Taiwan is different. If we exclude other factors and only compare the wage per hour in the Netherlands and Taiwan, the former is higher than the later. However, the Netherlands still possesses 2.4 times higher GDP than Taiwan. The distinguishable high productivity of Dutch labors and the high enterprise training investment might contribute on this achievement.
On the contrary, in the case of Taiwan, it has better enterprise training condition than the Netherlands; it seems that Taiwan has not made the most use of its advantages yet. The education system and quality of Taiwanese labors have rooms to be improved. Even though the accessibility of the formal education is getting wider and easier, it is still lack of coordinating mechanisms between the gap of the school and real society. This may produce the overeducated young employees and cause the waste of human capital investment when the high educated employees couldn’t fit the demand of labor market.
Second, the government intervention of enterprise training may be the other reason. In Taiwan, the training offered by the Public Vocational Training Centers may decrease the willingness of firm to provide enterprise training itself. Furthermore, it appears that Taiwanese companies have not regarded enterprise training as an important issue to enhance the productivity of employees. On the other hand, although there are cons and pones of the existence of the Public Vocational Training Center, it did contribute on providing plenty of trained labors in Taiwan. Hence, the Netherlands may follow this pattern while consider to offer general enterprise training.
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