Living Wages Commitment

Update: July, 2023

Introduction 

 Advantech, as a responsible and sustainable organization, is committed to ensuring fair compensation for our workers through the implementation of living wage improvement measures. This report showcases our proactive approach in providing a living wage to our employees and suppliers. We aim to create a positive impact on the lives of workers and promote sustainable economic growth. Our commitment aligns with the DJSI (Dow Jones Sustainability Indices) Living Wage assessment standards, and we are pleased to present a comprehensive overview of our efforts.

Living Wage Implementation

In 2022, Advantech commenced the implementation stage of our living wage and living income commitment. We identified six priority markets - Taiwan, China, the United States, Europe, Japan, and Korea - through a rigorous selection process. This process included analyzing the gap between legal minimum wage and living wage in these regions, as well as considering Advantech's significant sourcing presence in these markets. 

By 2023, Advantech aims to have living wage improvement measures in place for employees in the six priority markets. To ensure the effectiveness of these measures, we conducted a comprehensive living wage survey through the "Advantech ESG Risk Assessment Audit Form" for our global significant/critical suppliers (totaling 271 suppliers) and contractors. This survey includes suppliers with high annual procurement amounts and those supplying critical raw materials, along with those identified as having high sustainability risks through ESG evaluations. 

Looking ahead to 2025, our commitment extends further, as we plan to expand the Living Wage improvement measures to cover more regions within the six major markets. Additionally, we remain dedicated to conducting regular living wage surveys for global Advantech significant suppliers and contractors, ensuring adherence to ethical wage practices throughout our supply chain.

Living Wage Methodology

Advantech has defined the living wage as the minimum wage our employees earn for basic working hours, excluding bonuses and overtime pay. This definition adheres to international standards, ensuring that our workers' essential needs for food, clothing, housing, and other necessary living costs are met. To determine living wage standards, we rely on relevant data from competent authorities, such as the Household Income and Expenditure Survey Report of the Directorate-General of Budget, Accounting, and Statistics, Executive Yuan, R.O.C. (Taiwan). 

The living wage calculation is conducted using a formula agreed upon by the Directorate-General of Budget, Accounting, and Statistics in 2021. This formula incorporates factors such as average monthly consumption expenditure per person, average monthly food, clothing, and housing consumption per person, and the number of dependents in the household. By following a transparent and consistent methodology, we ensure equitable compensation practices.

Process of Living Wage Application

Advantech's commitment to living wages is evident in our timely implementation process. We introduced the calculation of living wages in October 2022, which is now a part of the company's salary and annual salary adjustment for new recruits. The specific living wage for each market area is determined based on the basic monthly consumption expenses of families residing in that location, ensuring the needs of our employees are adequately met. 

To ensure that employee salaries align with the local standards of living, we regularly compare the determined living wage to prevailing wages. This process guarantees fair compensation for our workers and promotes a positive work environment. Our commitment to continuous improvement is evident in yearly salary adjustments, which are aimed at supporting the local living standard for both new and existing Advantech employees.

Mid and Long-term Plans

Advantech's mid and long-term plans exemplify our dedication to promoting living wages both within our organization and among our suppliers:

1.       By 2025, all employees in the six priority markets will receive at least a living wage standard, surpassing the legal minimum wage. Our internal salary management team will actively engage in discussions to formulate the salary structure for direct employees, including technical and manufacturing staff. This commitment extends to Europe and America, where we aim for a 100% achievement rate of the living wage.   

2.       By 2030, our vision is to extend the concept of living wages to all Advantech employees, including direct and indirect employees, across all overseas and domestic countries/regions. This vision ensures that all workers within our organization are fairly compensated, irrespective of their job roles or geographical location.   

3.       Furthermore, we actively collaborate with business partners, consultants, and private organizations to advocate for the implementation of a minimum living wage. This approach benefits individuals, societies, and contributes to the growth of businesses and the overall economy. Our efforts extend beyond our organization, impacting the broader business landscape positively.

Advantech's ESG Living Wages Report embodies our commitment to fair compensation practices and our dedication to creating a positive impact on workers' lives. Our proactive approach in implementing living wage improvement measures, conducting regular surveys, and adhering to transparent methodologies showcases our commitment to the DJSI Living Wage assessment standards.