Foreign firms set high pay standards

While the salaries for staff and professionals are comparable, the difference in the salaries of managers and executives is quite high, said Hoa Nguyen, Director of Mercer Remuneration Surveys and Human Resource Consulting Services, at the Post Total Remuneration Survey seminar in Ho Chi Minh City on October 18.

But she said with local companies often paying much larger bonuses, the gap narrows a bit.

To compete with multinationals in attracting talent, Vietnamese companies are now willing to pay outside their salary range, she said.

The survey points out that like last year, salary increases this year have been higher than the inflation forecast — of 7.5% — noting that multinational companies (MNCs) give employees an average 11.1% salary rise and local companies, 11.3 %.

The raise is forecast at 11.1% next year at both MNCs and domestic firms.

Godelieve Kroonenberg, Mercer's Market Business Leader, ASEAN Information Solutions, said Vietnam has the highest salary increase rates in Asia this year, followed by India and Indonesia at 10.5% and 9.3-10 %.

The trend would continue next year, she said.

With the starting salary in Vietnam being one of the lowest in the region, it has more room to increase, she said.

Hoa said the pharmaceuticals, manufacturing, and consumer-goods industries offer the highest rise of 12%.

Those in banking, financial services, and real estate are at the other end of the spectrum due to difficult business conditions, she said.

The survey said oil and mining and banking continue to top in terms of salaries, while manufacturing remains the lowest-paying industry.

Employee turnover down

The employee turnover rate fell 2-3% from last year because of the current economic condition, making employers and employees wary of new recruitment and moving, Hoa said.

The technology sector, which faces a talent shortage, had the highest staff turnover rate, and oil and mining and chemicals, the lowest.

According to the survey, despite the difficult times, 60% of companies plan to increase their payroll, 8% less than last year and 3% plan to cut their headcount, the same as last year.

Survey respondents said the most challenging to recruit and retain were sales managers, marketing managers, and sales executives.

Kroonenberg told Vietnam News that local companies may not have big budgets like MNCs, so to attract and retain talents they "have to find your own strengths, that means what makes you different as a local company, maybe you have better facilities at the workplace or maybe you offer bigger benefits or maybe just a working culture that is more healthy."

Promotion and opportunities to grow are also very important, she said.

The survey shows that improvements in benefits are almost the same as last year, and mainly focus on insurance, medical treatment, cars, and loans, with local companies providing more car and loan benefits than MNCs.

A total of 418 companies with 142,587 employees in 13 industries took part in the survey.

Last year's survey polled 371 companies.