Your project is unique? Let’s talk about it!

Please share with us some details, a SOA expert will get back to you to discuss it in person!

"*" indicates required fields

This field is for validation purposes and should be left unchanged.

Almost there! Last step to be part of the journey:

"*" indicates required fields

This field is for validation purposes and should be left unchanged.

Apply this position

"*" indicates required fields

Accepted file types: jpg, gif, png, pdf, doc, docx, Max. file size: 2 MB.
Accepted file types: jpg, gif, png, pdf, doc, docx, Max. file size: 2 MB.
This field is for validation purposes and should be left unchanged.

With a population of over 98 million, Vietnam’s labour force represents 57% of the population.

The country’s main industries – manufacturing (16% of GDP), services (51%), and agriculture (14%) – employ a majority of the labour force, with Vietnam’s unemployment rate in Q1 of 2021 being 2.19%.

One of the biggest contributing factors to this economic activity comes from a trend of young workers moving from traditional agriculture to the more advanced and ever growing manufacturing and services industries. This is happening on top of the already increased mechanization of the agriculture sector itself.

Due to the “recent” developing nature of the workforce in Vietnam, it is natural that there exists some difficulty in finding highly skilled employees : only 11% of domestic Vietnam’s workforce are considered highly skilled.

The government is currently pushing to develop the workforce through vocational certificates and university formation.

1. The labour market influenced by general indication of Vietnam’s level of education

Vietnam has also been increasing its standard education level. The Vietnamese population has reached a literacy rate of 94.5% (the World average is 83.5%), and, Vietnam is 7th out of the 19 Asian countries in English speaking skills.

The fast-growing economy, digitalization, and increased automation has forced Vietnam to adapt and look towards the future. Thus, the government urges its institutions to give access to the skills and knowledge necessary in order for the country to benefit from a highly skilled workforce.

Vietnam is currently in a transition stage, with a skills shortage of 50% from new graduates struggling in foreign language skills and adaptability to the work environment. Because of this, businesses are finding it challenging to locally source technical workers. As such, the labour force needs to improve its skills and learn to adapt.

Vietnam Labour Force

Developing a skilled workforce will be one of the government’s top priorities:

  • First, the country has taken steps to increase vocational and technical training in order to meet the requirements of the labour market. The government also encourages foreign firms to invest in training centres to develop their human resources sustainably
  • Secondly, strengthened partnerships between firms, universities, vocational schools, and cooperation with international organisations can further help to develop skilled human resources
  • Thirdly, truly embrace science and technology as the top national policy as it’s a major sector for the country development (thanks to the universities’ partnerships but also economic incentive)

2. Dynamic industries in Vietnam requires more labour force

The industries that require the most vocational training are those that are currently developing the fastest, being: the automotive industry, electronics, hospitality, mechanical engineering, and textiles and garments.

Being qualified through vocational training demands, these workers are paid at least 7% higher than the applicable minimum wage rate.

Some of these industries are growing faster than they can hire, leaving large workforce gaps in certain sectors, namely:

  1.  Business/sales
  2.  Marketing
  3.  Accounting/Auditing
  4.  Unskilled labour
  5.  Software design
  6.  Electrical and electronic maintenance
  7.  Construction engineer
  8.  Developing individual customers in the bank
  9.  Office/administrative staff

Employment in other industries however is predicted to decrease, as such in:

  • Agriculture Forestry and Fishery (-2.1%)
  • Beverage production (-5.6%)
  • Manufacture of other non-metallic mineral products (-3.5%)
  • Repair, maintenance and installation of machinery and equipment (-5.4%)
  • Wholesale and retail; repair of cars, motorcycles, motorbikes and other motor vehicles (-3.1%)
  • Accommodation and catering services (-4.4%)
  • Arts, entertainment and recreation activities (-8.5% )

Overall expected employment increase:

  • Processing and manufacturing industry (2.4%)
  • in which Textile (4.5%)
  • Producing goods from straw and plaiting materials (5.5%)
  • Producing paper and paper products (6.4%)
  • Producing goods from rubber and plastic (7.5%)
  • Producing electronic products, computers and optical products (6.2%)

3. Differences in the labour market between north, south and centre zones

As of today, the average national labour force participation stands at 76.9% and spreads out in different clusters across the country.  It concentrates around urban trade hubs like the Hanoi metro area, Hai Phong metro area, Da Nang metro area, and the Ho Chi Minh City region; areas where there are higher employment rates and labour opportunities. The Nghe An province in the north has also been receiving some attention in recent years and has become a potential investment location for businesses looking to expand their operations.

The minimum wage level differentiates between the regions:

  • Region I (urban Hanoi and Ho Chi Minh City): highest minimum wage of US$190
  • Region II (Main cities outskirt and big cities as Da Nang, Nha Trang, and Can Tho): minimum wage of US$169
  • Region III (smaller provincial cities and suburban districts): minimum wage of US$148
  • Region IV (the rest): lowest minimum wage of US$132
Vietnam labour market and workforce

4. Tips to recruit labour force in Vietnam

The lack of skilled labour will slow down the economic transition from labour-intensive industries to high-tech goods, which will slightly reduce Vietnam’s competitiveness. Currently, around 40% of FDI firms in Vietnam find it difficult to recruit skilled employees, so here are some tips in order to recruit more effectively in Vietnam:

Probation Period:

A Probation Period may be agreed between the parties. The duration of a probation period depends on the qualification, education and job position of the new employees, but must not exceed the time limits as provided by law, i.e. 6, 30, 60, 180 days on a case by case basis.

Fixed-term employment contract:

Definite terms for labour contracts can be agreed by the parties for up to 36 months and twice in a row. An employment agreement with a term of 12 months is standard after the end of the probation period.

Find reliable workers:

You can find reliable workers through various websites that propose to help you to recruit workers across Vietnam. You can find skilled workers through Linkedin, University programs or with specified websites such as Vietnamworks, Careerbuilder, Topcv. Basically, the recruitment process is always the same: its starts with an announcement, then with the CV, and finishes with a face to face interview.

The best tip from our human resource:

Be proactive! In Vietnam skilled English-speaking workforce is short, so you have to spend time at universities and various specific events. It is necessary to talk and have a few interviews for finding the right person for the right job.

To conclude, thanks to its tax incentives, free trade agreement, and competitive labour force, Vietnam is one of the most favourable countries for foreign investment. The current fast-paced growth the country is experiencing has led to a lack of skilled workforce. Vietnam’s government is currently trying to improve this situation to anticipate the upcoming automation area. This can make it challenging for businesses to hire due to varying localisation and qualification standards.

Our best recommendation is to have contact with local people, that’s why our Corporate Services team composed of local experts is here to support you.