Big firms labor under skilled worker shortage

While the country’s population is in the “golden age,” the number of skilled and qualified workers remains low at 26%, which becomes problematic in the context of the country being the third largest recipient of foreign direct investment (FDI) in the region, it said at a Saturday conference on labor market development.

This limitation makes it challenging for Vietnamese workers in the wake of the Covid-19 pandemic and job displacement, while the nation’s safety net is not strong enough to handle the risks they face.

Vietnam’s workforce had doubled from 27 million in 1986 to 51.4 million by the end of the second quarter of 2022.

Citing recent studies, Nguyen Xuan Son, Operations Director of Manpower Group Vietnam, said only 8.96% of Vietnamese workers have the ability to work remotely at a time this trend was on the rise.

Skilled workers accounted for just 11.6% of the total and only 5% are fluent in English, which is quite a limitation when competing with workers in the region. The average income of Vietnamese workers is about $300, much lower than workers in the region ($1,992) and the world ($2,114), he said.

Son emphasized that the cheap factor is both an attraction and a weakness. While cheap labor can attract investors, Vietnamese workers will struggle to adapt when foreign enterprises deploy new production technologies.

He cited a survey that found about 57% of enterprises having difficulty in recruiting high-quality human resources. In the past, salary was the leading factor, but now it had to do with other employee benefits and policies such as flexible working hours. Enterprises should, therefore, become more flexible, improve the working environment and provide development opportunities to retain their employees.

The 2021 Provincial Competitiveness Index (PCI) report prepared by the Vietnam Chamber of Commerce and Industry (VCCI) showed that unskilled workers are the easiest to recruit when firms expand production, followed by accountants, technical staff and then managers and supervisors. CEOs are the hardest group to recruit.

Representatives of many enterprises expressed concerns about the shortage of high-quality human resources, particularly when they needed while they were in need of recruiting thousands of positions when expanding production.

Nguyen Viet Quang, CEO of giant conglomerate Vingroup, said that in the next two years, they will need about 100,000 people, of whom 20% should be high-quality workers who have at least finished university.

A representative of PouYuen, the largest sports shoe manufacturer in HCMC, said they have a worker deficit of about 5% after the pandemic. Thai Van Tong, General Director of PouYuen, said that in the future, the company will promote automation of production and digitization of data and this process will require a large number of highly skilled local workers.

Tong hoped that the Government would create favorable conditions for enterprises to connect with vocational training schools and invest more resources in Southern provinces to create a source of skilled labor.

Nguyen Van Than, Chairman of the Vietnam Association of Small and Medium Enterprises suggested that authorities study the salary regime not only for ordinary workers but also for the senior group because there should be incentives for those who are highly skilled and intelligent.

Otherwise, such workers will easily leave for foreign countries or opt to work with FDI enterprises and foreign companies, making it even harder for small and medium enterprises to recruit the skilled people they need.

“Every time I go to the airport, I see young people going to work abroad and I feel sad because they should have worked in the country,” Than said.

Addressing at the conference, Prime Minister Pham Minh Chinh said a surplus labor market can also cause economic instability and disturb social order. If the quality of labor decreases, the market will gradually lose its competitiveness. These two aspects need to be addressed in tandem.