Many believe that Vietnam’s abundant source of labour will be an advantage to compete with China in attracting foreign investors.

Professor Ho Duc Hung says at a round-table discussion on Vietnam’s human resources in the post-WTO period that cheap labour should not be considered an advantage, but rather a big concern for the economy.

It is true that an abundant supply of low-cost labourers is an important factor in attracting foreign investors. However, cheap labour also means low quality to fit in with the growing trend towards modern production and management.

Prof Ho Duc Hung says the labour productivity of a Japanese worker is 135 times higher than a Vietnamese, 30 times higher than a Thai, 20 times higher than a Malaysian and 10 times higher than an Indonesian.

It is quite wrong to consider low-cost labour or low-quality labour as an advantage as low labour productivity in an enterprise will only lead to low profits. Experts say that enterprises may save money by hiring cheap labour, but, in fact, they have to pay more for training. Training fees for labourers in Vietnam are often 15-20 times higher than in other countries.

Therefore, cheap labour should not be considered a positive advantage.

Some people may be concerned by the fact that the total salaries of 20 Japanese experts at Nghi Son Cement Factory in northern Thanh Hoa province are equal to the salaries of nearly 2,000 Vietnamese labourers. The imbalance is not difficult to understand, as people who can earn US$1,000 have more chances to find jobs than those who can receive less than US$100. The real concern is how Vietnam has trained its labour source over the past years.

Pham Chi Lan, former member of the Government’s Research Board says that even a university graduate cannot meet standards as required by society. Judging from the current training of Vietnamese labourers, it is more accurate to term it as “disorientation” than “imbalance”. No wonder it is a paradoxical result of the labour issue in Vietnam!

At present, the vocational training system mainly consists of technical schools which used to train workers for the subsidy-based economy. Since Vietnam decided to develop a market-oriented economy two decades ago, there have been many changes in the country but these technical schools have adapted themselves slowly to new developments and failed to provide enough skillful labourers as required in the current process of national modernisation and industrialisation.

In the wake of Vietnam joining the WTO, there will be an influx of foreign labourers into Vietnam. They will likely be employed to hold key positions in enterprises which Vietnamese labourers are not qualified. Improving the quality of labourers is very demanding. It requires a long-term strategy, not just efforts by enterprises or labourers.

The Ministry of Labour, Invalids and Social Affairs has planned to raise the total number of trained labourers to 40 percent by 2010 with a focus on labourers for industrial parks. It will build 25 vocational schools and 10 training centres and upgrade 30 key vocational schools and around 100 training centres across the country with funding from the official development assistance (ODA) capital. 

As facilities for labour training will be well in place by 2010, the main concern of enterprises will be how trained labourers will meet requirements of modern industrial production after graduating from vocational training schools and training centres.

Experts on labour training say there is a growing tendency that enterprises will order vocational schools to train labourers according to their specific requirements. Therefore, vocational schools should launch new training programmes to meet their demands.