Employment Trends: Vietnam
by Mary Anne Thompson
With economic reforms, more modern business practices and a youthful population, Vietnam is on a growth trajectory – with one major problem – the demand for skilled employees far exceeds supply, according to Mary Anne Thompson, President and Founder of GoinGlobal.
While the economy remains dominated by state-owned enterprises, Vietnam’s government has moved to implement reforms needed to modernize the economy, increase exports and create jobs for its growing population.
Vietnam’s economic growth remains impressive, with 6 percent growth last year. Moreover, some estimates place Vietnam as the world’s eighth-fastest growing economy by 2050.
The country’s labor force is growing at more than 1 million people per year, yet its unemployment remains at a low 2.5 percent.
Growing middle class: Vietnam’s middle class is the fastest growing in Southeast Asia, reaching 33 million by 2020.
Young population: The median age in Vietnam is just over 29 years. Nearly 70 percent of the population is between the ages of 15 and 64. And about a quarter of Vietnamese are 14 years old or younger.
Cheap labor: Vietnam has an abundance of low-wage labor. The country’s national average minimum wage is 106 USD per month.
Innovation: Another measure of success is the country’s record of innovation. The Global Innovation Index reports a strong performance by Vietnam, with high levels of innovation compared to other countries with similar income levels. It named Vietnam one of the world’s ‘innovation index climbers,’ having increased its performance ranking since last year and consistently outperforming its economic peers.
- Information technology
- Health care
- Supply chain
Vietnam’s economy needs foreign workers to plug skill gaps in many areas, particularly technology and banking. Companies may recruit expatriates to work at positions in management and technology, and as experts in certain fields when local workers cannot be found. To work in Vietnam, expats need long-term visas and, once in the country, work permits. Foreigners in high-level positions, such as directors, are exempt from work permits.
Estimates vary, but about 77,000 foreign nationals now work in Vietnam. Most of them have work permits and are skilled workers and managers employed by foreign contractors. The largest numbers are from China, South Korea, Thailand and Indonesia. Vietnam also is home to a significant number of illegal manual foreign laborers.
Skill shortages in Vietnam are acute, and demand continues to exceed supply in sales and marketing, engineering, and public relations. The Vietnamese educational system does not really train students for today’s job market. Competition for qualified candidates is fierce. Some MNCs (multinational corporations) have sponsored job-training programs to help meet industry demands. Even if candidates have degrees, they often lack adequate experience. MNCs are also trying to attract skilled Vietnamese expats to return home.
Managers needed: Vietnam has a large gap in management at all levels – from entry-level to senior managers. Sales manager, senior sales executive and marketing manager continue to top the list of the most sought-after positions.
Areas of Job Promise
About 40 percent of multinational companies (MNCs) in Vietnam plan to increase staff over the next 12 months.
The greatest demand, according to HR2B Recruitment, has been for candidates in:
- Information technology
- Business development
- Human resources
- Quality control
- Medical and health
Manufacturing: Vietnam’s manufacturing sector is leading demand, with much of that for administrative roles.
Health care/Pharmaceuticals: In response to Vietnam’s growing health care industry, a number of international pharmaceutical and medical device companies have established operations there, creating high demand for experienced health care professionals, including those with knowledge of international compliance standards, strong communication skills and fluency in English.
Finance professionals who understand the business and their roles in it are in high demand, but there are severe shortages of qualified candidates. Banks are seeking candidates for positions in management.
IT: Technical skills are often the top skills shortages identified by employers in Vietnam.
Vietnam currently boasts about 250,000 highly trained IT specialists, but will need more than 400,000 by the end of 2018, and too few are in the pipeline. Some of the strongest demand is for managers.
Supply chain: Supply chain/logistics is one of the world’s fastest-growing industries. Vietnam’s supply chain industry is no exception. And, there is a crying need for qualified professionals to manage supply chain and distribution there. Traditionally, expatriates have been hired to fill these roles and also train local talent.
Skills in Demand
The most-needed soft skills in Vietnam include:
- Communication skills
- Problem-solving ability
- Ability to work in teams
- Ability to interpret
- Analytical skills
- Creative decision making
- Ability to think ahead
- Organizational skills
- Ability to delegate
Key skills needed for the next five to ten years in Vietnam, as well as throughout the Asia-Pacific region, according to Oxford Economics, include:
- Digital business skills
- Agile-thinking skills
- Global-operating skills
Minimum wages: 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. But, although minimum wages have been increased every year, countrywide the average minimum wage remains low at 106 USD per month. Average wages aren’t much higher -- 176 USD per month.
Expat workers fare far better. The typical expat pay package for middle managers, including salary, benefits and taxes, averages about 250,000 USD per year, according to ECA International.
Raises: Wages in Vietnam are increasing rapidly. For the coming year, salary increases will likely average about 10 percent across all industries in Vietnam, according to Towers Watson.
To keep up with its projected economic and employment growth, Vietnam must prepare its young population for the jobs of tomorrow. Expatriates have been helping beef up the skill level in the growing country, but its own people need to be ready to fill the gaps as more and more jobs at all levels come available. Education and training are the keys to Vietnam’s future.