4
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V
IETNAM
B
RIEFING
|
September 2014
HRTrends inVietnam
Once a company has gone through all the legal procedures required
for the establishment of their business in Vietnam, the next big
hurdle is the process of actually hiring the staff that will be needed
and dealing with the associated payroll obligations. Hiring, and the
associated legal obligations that go alongwith it, can be a confusing
process. It is therefore strongly recommended that businesses take
a careful look at all relevant regulation and engage a
where appropriate to ensure proper compliance with all laws.
In recent years, Vietnamhas become an increasingly attractive place
for businesses of all types. The country has a fast growing consumer
class and a young and dynamic workforce that is continuing to build
its skills set. In fact, Vietnam’s labor force is growing by more than
one million people per year. Currently, the hottest hiring areas are
sales, IT & software, and marketing.
There are a number of important HR trends occurring in Vietnam.
While labor costs are still low (50 percent that of China and 40 percent
of those reported inThailand and the Philippines), wages are steadily
increasing. Over the past five years, this increase in salaries has come
without a corresponding increase in productivity. Compounding the
costs of employing staff in Vietnam are the country’s comparatively
high social contribution and income tax rates.
Due to the developing nature of the workforce in Vietnam, it is
natural that there exists some difficulty in finding highly skilled
employees. Skills and talent shortages are particularly acute in
industries such as
and banking. However, many
international companies, in partnership with the Vietnamese
government, are sponsoring training programs to ensure that there
are a growing number of highly skilled employees to choose from.
Additionally, some companies, such as ANZ, are looking to attract
Vietnamese expatriates back to the country since they tend to have
a higher skill set.
The country’s young and growingworkforce has newdemands and
high expectations for their futures. Vietnam is just now coming into
the full benefits of its demographic dividend – where the country
will see a massive influx of young people into the workforce over
the next few years. To understand what the next few years will
bring to Vietnam, it is instructive to look at China, which previously
went through its own demographic dividend and saw explosive
economic growth.
As the country’s workforce continues to grow there has been a
resulting rise in competitionwithin the jobmarket.This has increased
the rates of turnover at many companies as employees are often
shopping their skills around to other potential employers. It is
not unusual to see applicants who have worked at a multitude of
companies over a short span of time.
Company Considerations
– By
and
Dezan Shira and Associates
Average Annual Growth Rate of Labour Force,
ASEAN Member Countries (%)
Country
2010-2014
2015-2020
Brunei Darussalam
1.88
1.46
Cambodia
2.03
1.67
Indonesia
1.48
1.24
Lao PDR
2.48
1.97
Malaysia
2.01
1.85
Myanmar
1.38
0.97
Philippines
2.46
2.31
Singapore
1.44
0.91
Thailand
0.83
0.48
Vietnam
1.56
0.86
Source: Compound average annual growth rates are estimated from ILO, Economically
Active Population. Estimates and Projections (6th edition October 2011)
Vietnam GDP per Capita
GDP per Capita in US Dollars at Constant Prices Since 2000
2004
600
700
800
900
1000
1100
2006 2008 2010 2012 2014
658.03
699.49
740.04
784.25
819.88
85507
900.49
946.8
Source:
| World Bank
986.01
1023.63
Key Information
