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Employment Outlook: Vietnam

2017-06-24
by Mary Anne Thompson, founder and president, Goinglobal, Inc

Culturally rich Vietnam employs more and more highly skilled foreign workers to fill gaps.

Located in Southeast Asia, Vietnam is a culturally rich, developing country. In spite of its small size, Vietnam is densely populated, with more than 95 million inhabitants. Colorful and vibrant, the country boasts many ethnic groups and numerous languages and religions. Vietnam’s official name is the Socialist Republic of Vietnam. Following the Vietnam War, North Vietnam and South Vietnam were reunified into a single country under a Communist government. 

The country’s economy has seen dramatic growth over the past decade, boosted by international trade and increasing foreign investment. The poverty rate has fallen from 58 percent to 14 percent over the past 15 years. 

The country’s labor force is growing at more than 1 million people per year, yet its unemployment remains at a low 2.4 percent. The unemployment rate is expected to remain at a low 2.4 percent and to increase only slightly to 2.6 percent by 2020. 

Vietnam’s economy needs foreign workers to plug skill gaps in many areas, particularly managers, executive directors and experts in such fields as technology and banking. The heaviest recruiting has been, and is expected to continue to be, in the information technology, manufacturing, services, and consumer goods and fast-moving consumer goods (FMCG) industries. 

Many non-citizen professionals are contracted by foreign firms with established investment projects in the country. It is estimated that there are around 74,000 foreign workers in Vietnam. To work in Vietnam, non-citizens need long-term visas and, once in the country, work permits. Work permits are valid for three years. Some foreign workers are exempt from work permits. These include heads of representative offices, non-governmental organizations and projects of international organizations, as well as owners of limited liability companies. Many companies are also trying to attract skilled Vietnamese nationals working abroad to return home. Returning Vietnamese can often command salary increases of 50 percent. 

Looking Ahead 

Future trade agreements, such as the European Union-Vietnam Free Trade Agreement (EUVFTA), set to go into effect next year, are expected to further boost the economy. The World Bank forecasts Vietnam’s economy will grow at an average rate of 6.3 percent in the next three years, bolstered by a strong manufacturing export market and foreign investments. In fact, a recent PricewaterhouseCoopers study forecasts that Vietnam will experience some of the strongest economic growth in the world over the next 30 years. 

By Region 

As Vietnam’s economy becomes more modernized, its labor needs are shifting from mostly manual labor to more jobs demanding higher-level skills. This is especially true in the cities. The largest cities in Vietnam are Hoh Chi Minh City and Hanoi. The northern city of Hanoi remains Vietnam’s cultural and political capital. The economic hub of Vietnam, Hoh Chi Minh City is located in the southeast and is much larger than Hanoi. It has attracted the majority of recent foreign investment and has strong energy and manufacturing sectors. 

Most jobs in the country are to be found in the North and South Central Coast regions, followed by the Mekong Delta region. These three regions account for nearly two-thirds of the country’s workforce. Ho Chi Minh City has greater demand for white-collar workers than Hanoi. White-collar salaries in Ho Chi Minh City are 10 to 20 percent higher than in Hanoi. 

Areas of Job Promise 

Tourism 

Vietnam’s tourism and hospitality industry is seeing robust growth. Ten million tourists visited Vietnam last year, a 25 percent increase from the previous year.  The sector accounts for 6.6 percent of Vietnam’s GDP. Tourism is predicted to be the country’s top services export through 2030. 

Health Care 

Vietnam’s health care sector is expected to see major growth. Its growing middle class is creating a strong demand for better care and more health care professionals to provide it. Over the past ten years, spending on private health care increased by more than 240 percent. However, demand is still greater than supply. The World Health Organization reports that there are seven to eight health care workers in Vietnam for every 10,000 people, far below the global average of 15 health care workers per 10,000. In the last few years, the government has opened up the industry to foreign investors, making it easier for foreign nationals to work in the sector – especially for citizens of ASEAN countries. 

Education/Training 

As Vietnam has opened to the outside world, it has experienced a greater need for English speakers. Vietnam’s youthful population and the importance of speaking English to qualify for many jobs are creating numerous opportunities for English teachers, especially native speakers. Teaching English as a Foreign Language (TEFL) teachers are in very high demand. English-language centers are abundant in Ho Chi Minh City and Hanoi. Native English speakers and qualified TEFL teachers (CELTA/TRINITY or higher) get the best jobs and command top salaries. 

Talent Shortages 

Vietnam does not have enough skilled workers to meet the needs of its growing economy. Many hiring managers are looking outside of their industry sector to find candidates with the necessary skills. The McKinsey Global Institute (MGI) estimates that Vietnam will have to boost labor productivity growth by 50 percent to maintain current economic growth. However, 62 percent of Vietnamese employers report difficulty filling jobs. 

Occupations in strong demand are positions in marketing, engineering and sales. Sales managers, marketing managers and senior sales executives are the top jobs recruiters are looking to fill – and the most difficult positions to keep filled. 

Some other occupations in great demand are: 

  • Accountants
  • Auditors
  • Cyber security professionals
  • English instructors
  • Finance managers
  • Manufacturing plant managers
  • Mobile application developers
  • Software engineers 

Skills in Demand 

There is a shortage across all sectors of workers with strong written and oral communication, critical thinking and analytical reasoning skills. Many multinationals require English proficiency. Knowledge of Japanese is a plus, due to the large number of Japanese companies currently investing in Vietnam.

Salaries

According to HSBC’s most recent Expat Explorer survey, foreign workers in Vietnam earn, on average, about 100,000 USD annually – about 50 times more than the average salary for a Vietnamese worker. There is a large difference between salaries offered by multinational corporations (MNCs) and local companies. The average MNC salary is 31 percent higher than the average local salary. Salaries in multinational corporations are expected to increase by 9.2 percent this year, with a 9.6 percent increase expected for local companies. 

Vietnam’s minimum wages for workers in non-state-owned organizations vary, depending on the rate set for each of the four zones established by the government. Still, while minimum wages have increased every year, the average minimum wage remains low. This year, the minimum wage is expected to be raised by 7.1 percent.

Conclusion 

Vietnam’s economic growth is projected to continue for years to come. With low unemployment, there are still jobs to fill, however, and foreign workers are needed to make up for the skills gap that exists in the country. From management to lower-skilled jobs, Vietnam has opportunities across the spectrum, pay increases are continuing in this colorful, welcoming country that is seeing its best progress in decades. 

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