Vietnam is quickly becoming a favored destination for foreign manufacturers due to its labor costs, strategic location, and favorable economic policies. Therefore, to thrive in this burgeoning manufacturing hub, understanding the local labor market and implementing effective recruitment strategies are essential.
Our article delves into the nuances of Vietnam’s labor landscape, highlighting key challenges and presenting proven methods to attract and retain skilled local talent. We will examine current workforce trends, recruitment challenges, and strategic approaches, manufacturers can gain a competitive edge. In addition, we ensure compliance with local regulations.
Vietnam Labor Market
In 2022, Vietnam’s manufacturing sector saw substantial growth in labor productivity. Moreover, labor productivity in Vietnam’s manufacturing industry surpassed 200 million Vietnamese dong per worker. Additionally, the share of trained labor in manufacturing has sharply increased since 2021.
The manufacturing sector has been a key driver of Vietnam’s economy since the Doi Moi reforms in 1986. By 2022, it employed the second-largest number of people after agriculture and was the leading GDP contributor. Hence, Vietnam has become an attractive manufacturing hub due to its strategic location, affordable labor, and supportive policies, attracting over $23.5 billion in FDI in 2023. Major global brands like Samsung and Apple have significant manufacturing operations in Vietnam, producing high-tech products and contributing to export growth.
Learn more at global view of Vietnam labor market.
Samsung’s on-going relationship with the Locals in Vietnam
Samsung has significantly impacted Vietnam’s manufacturing landscape. Most importantly, the company has established multiple manufacturing facilities in the country, including the Samsung Electronics Vietnam (SEV) complex in Bac Ninh province and the Samsung Electronics Vietnam Thai Nguyen (SEVT) complex in Thai Nguyen province. These facilities primarily focus on producing smartphones, tablets, and other consumer electronics.
In operation since April 2009, Samsung Electronics in Vietnam has more than 100,000 employees working across its manufacturing facilities in the Yen Phong Industrial Zone in Bac Ninh Province (Samsung Electronics Vietnam; SEV) and Pho Yen District in Thai Nguyen Province (Samsung Electronics Vietnam – Thai Nguyen; SEVT).
Ms. Dang Thi Ngoc Thinh, Member of the Party Central Committee, Vice President and Mr. Tran Thanh Man, Member of the Party Central Committee, Chairman of the Vietnam Fatherland Front presented certificates of merit and commemorative medals to SEV representatives.
Apple’s Strategy to Tap into Vietnam for Manufacturing
The presence of Apple’s suppliers has created thousands of jobs in Vietnam, contributing to the local economy. For example, Foxconn alone has committed to investing $270 million in Bac Giang province to produce MacBooks and iPads.
Apple To Expand Further Investment In Its Vietnam Supply Chain
The plans for Vietnam government to develop its workforce
Approved earlier this year by Vietnam’s Prime Minister, the National Strategy on Attracting and Applying Talent to 2030, with a Vision to 2050, outlined in Decision 899/QD-TTg, provides a comprehensive framework for attracting and developing the necessary talent for Vietnam’s future growth. In order words, this strategy aims to ensure a steady supply of skilled labor over the next decade and beyond, enhancing opportunities in higher education and vocational training sectors.
Vietnam’s strategy to attract and retain both foreign and local talents involves four key steps:
This strategy emphasizes the critical role of educational institutions, expertise, experts, and funding in Vietnam’s development. It encourages foreign institutions to provide international-standard training, mobilizes localand international talent for government input. Moreover, the approach aims to attract overseas Vietnamese workers, secures funding from private capital, the state budget, donations, and foreign social resources.
Effective Recruitment Strategies
The local recruitment channels used in Vietnam
In Vietnam, several local recruitment channels play significant roles in connecting employers with job seekers.
- CGP Vietnam is a recruitment platform connecting businesses with qualified candidates across various industries in Vietnam. Furthermore, it offers tailored recruitment solutions, leveraging its extensive network and deep understanding of the local business environment.
- HRCchannel provides recruitment services that streamline hiring for businesses in Vietnam. Similarly, it uses a database of qualified candidates and customizes strategies for different industries.
- Vietnamworks is offering job postings, candidate searches, and career development resources. Known for its user-friendly interface and its insights into job trends as well as market demands.
- Source Of Asia – Jolie Siam: Source of Asia (SOA) has strengthened its HR services in Vietnam through Source Of Asia strategic acquisition of Jolie Siam, a renowned HR service provider. This merger allows SOA to offer enhanced staffing, payroll management, and HR consulting services, leveraging Jolie Siam’s extensive network and expertise.
The recruitment methods for foreign companies in Vietnam
Vietnamese businesses often need foreign workers for their specialized skills, international experience, and language abilities. This is especially true in technology, engineering, and management sectors. To hire foreign workers, companies must follow certain rules.
- Foreign workers can only be hired for specific roles like managers, executives, specialists, and technical workers when local workers aren’t available. Companies need to get approval from the authorities and explain why they need foreign workers.
- Foreign workers must be at least 18 years old, meet professional and health requirements, have no criminal record, and obtain a work permit unless exempt.
- Employment contracts with foreign workers can only be signed after getting a work permit. Contracts must match the work permit’s duration, and salaries can be paid in foreign currency, affecting taxes and social insurance.
- Foreign workers must participate in social and health insurance if they have certain types of contracts. Companies must report their use of foreign workers to the labor authorities twice a year.
In short, Foreign companies in Vietnam must first ask a local recruitment agency to find Vietnamese employees. The agency has 15 days to provide candidates. If no suitable candidates are found in that time, the company can hire staff directly.
Final Thoughts
Certainly, to effectively promote customer service (CS) and human resources (HR) services for foreign manufacturers in Vietnam, it is crucial to align with the strategies highlighted in this expertise article.
To sum up, by integrating these strategies, CS and HR services can effectively support foreign manufacturers in Vietnam. Furthermore, the approach can also leverage the unique aspects of Vietnam’s labor market and leveraging local resources.
About Source of Asia Corporate Services Team
Foreign employers and employees operating in Vietnam face a unique set of challenges due to the country’s complex employment laws and cultural nuances. A knowledgeable guide can help you overcome these obstacles.
At Source of Asia, we optimize your foothold in Southeast Asia by our Corporate Services Team so you can focus on your core business and leave us the administrative management!
Our offers for you:
- Build your local team
- Relocated foreign employees
- Host your team
- Establish locally
- Out source administrative tasks
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- Process management
- HR Solutions
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