Factories boost wages despite declining orders

Nike footwear supplier Changshin Vietnam in the southern province of Dong Nai will raise the monthly salary of its 37,000 workers by VND150,000 ($6.19) each starting next year.

The move is set to cost the company VND5.7 billion more monthly.

The head of union labor at the firm Dang Tuan Tu said that even though Changshin had seen orders plunging 20% this year due to weak global demand, company leaders wanted to retain workers by raising their wages.

A new employee will have a starting wage of VND5.5 million next year, which is 16% higher than the minimum requirement by the government.

“The company will raise the wage higher should the minimum wage increase in the upcoming years,” Tu said.

Medical equipment manufacturer Vikki Vina in Ho Chi Minh City will also raise its 1,500 workers’ salaries by VND200,000 each next year, a 5-6% hike. A new recruit will start at VND7.3 million a month.

The company’s board decided to approve the raise even though it has seen orders declining by 1,000 products each month.

It also gives each worker an average bonus of a two-month salary and a gift set worth VND600,000.

Nearly 45% of respondents in a survey by recruitment firm Navigos Search said they received a raise this year, against those who reported a decline of 11.5%.

Raises were in the range of 5-10%.

Nguyen Van Duc, union labor chairman of the Vietnam Singapore Industrial Park Binh Duong, said that many companies in the park would raise salaries to share the burden with workers as they seek to retain employees and wait for a recovery in demand.

Nguyen Xuan Son, an analyst at recruitment firm ManpowerGroup Vietnam, said that most companies had the resources to raise salaries, some of them from laying off a number of workers last year.

Raising wages is one of the best ways to retain workers, especially during difficult times, he added.