Simon Matthews, country manager of ManpowerGroup Vietnam, Thailand, and the Middle East, provides analysis into the labour demand among foreign-invested enterprises over the next few years, as well as the possible impact of free labour flows within the ASEAN on the Vietnamese market.
Along with more job opportunities, the Vietnamese workforce is foreseen to face serious skills challenges. Currently, only 11 per cent of the total workforce in Vietnam is highly skilled, leaving the remainder as either medium-skilled or non-skilled. Due to this shortage, Vietnam can hardly meet the requirements of enterprises operating in the country. Competition is even harsher because the workforce’s productivity is far lower than neighbouring countries like Singapore, Malaysia, and Thailand.
Globally, nearly one-third of employers say the main reason they cannot fill roles is a lack of applicants, according to ManpowerGroup’s Talent Shortage Survey 2018. A solid 20 per cent of employers say candidates lack the necessary experience. As companies become more digitalised, finding candidates with the right blend of technical skills and human strengths is more important than ever, yet 27 per cent of employers say applicants lack either the hard skills or the human strengths, for example traditional soft skills such as communications, collaboration, and problem solving.
|Simon Matthews, country manager of ManpowerGroup Vietnam, Thailand, and the Middle East
Given that background, employers are struggling in seeking the right talent. In the digital age, the best blend is a mix of technical skills and soft skills. While employers are looking for those with this right mix, most of the Vietnamese workforce lacks necessary soft skills.
Future labour demands
By signing international deals like the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), and other free trade agreements (FTAs), the ASEAN will require millions of new jobs to be created by 2025. Importantly, job opportunities are predicted to increase in positions at all levels.
For high-level positions, digital banking roles are particularly attracting a lot of people, as this is a key element in the competitiveness of every bank in the digital age. Regarding IT positions like chief information officer, especially in the fields of e-commerce, technology and parts of the sharing economy, the domestic pool cannot meet the requirements of employers who need to source talent from outside of Vietnam. In addition, the number of start-up companies is also increasing, resulting in the sharp increase of the recruitment demand.
In 2019, the hottest highly-skilled sectors that will increase salaries to attract the right talent include IT (14 per cent), construction and real estate (8 per cent), retail (10 per cent), and education (8 per cent).
The non-skilled labour market is especially bustling. In the north, the general labour market becomes hotter by year end with recruitment at electronics enterprises strongly increasing, followed by motorbike assembly, real estate, and food production businesses due to the festive season. Each month, these businesses expect to increase about 100 workers for their factories.
In the south, the workforce in electronics businesses that ManpowerGroup Vietnam provides staffing and outsourcing services increased strongly by the end of 2018. The figure is forecasted to climb by 1,000 to 1,500 workers in 2019.
Free labour flows within the ASEAN
Free workforce flows within the ASEAN due to international agreements will raise the number of Vietnamese workforce going abroad, and this will also attract more expats to Vietnam. Let’s look at Japan as an example. Since the end of 2016, Japan has adopted a new immigration policy, creating more opportunities for foreign workers. Accordingly, Japan has extended the length of stay for trainees in nursing to five years. Moreover, Vietnamese trainees have been allowed to work in almost all industries, from construction, mechanics, agriculture, and food processing to textiles. Previously, Japan only allowed trainees working in mechanics, electronics, and textiles.
In addition, the number of highly-skilled Vietnamese labour to work abroad will increase in the coming time. Currently, there are eight sector roles in the ASEAN that are free to move among countries in the region based on equivalent skills recognition agreements, including accountants, architects, dentists, doctors and engineers among others. However, with the low numbers of highly-skilled workers, Vietnam should prepare for upcoming opportunities. As employers are looking for the mix of technical and soft skills, the Vietnamese government, schools and businesses should work together to level-up the future workforce.
ManpowerGroup Vietnam has joined the local workforce development effort by announcing our Vietnam Annual Scholarship Programme aimed at giving students a bright future. The scholarship provides financial support, soft skills training and career orientation to students having good academic results despite difficult economic conditions.
We have co-operated with the International Training and Education Centre at the Ho Chi Minh City University of Science, along with Eastern Saigon Vocational School, Hanoi Open University, Hanoi University of Technology, and more. These scholarships are expected to expand to other schools across Vietnam in the future.
Solutions for the future
ManpowerGroup’s Talent Shortage Survey 2018 shows that more than half of 39,195 surveyed employers across 43 countries provide additional training to existing staff to address the shortage. Therefore, employers should provide necessary training programmes for existing employees. They should also seek collaborations with vocational schools, colleges and universities to help them train the future workforce.
Besides investment in employee training, to win in the digital age, employers should have an effective talent strategy including the four foundations of building, buying, borrowing and bridging. This means build the talent pipeline, buy skills where necessary, borrow from external talent sources, and bridge people with adjacent skills from one role to another to complement existing skills.