More than 400 enterprise leaders and personnel managers from provinces and cities nationwide have gathered in Ho Chi Minh City to discuss the results of the "Vietnam Salary Survey 2005” conducted by Navigos Group and VietNamWorks.com.
The first large-scale independent survey was carried out at 208 enterprises among 35,000 employees working in the largest economic centers of the national economy.
Jonah Levey, managing director of VietnamWorks.com and Navigos Group, said compensation and benefits are typically a business’ single largest expense yet there had been surprisingly little research done to date on salary data for the Vietnam labour market.
Market information on salary levels is critical in determining how much companies need to pay to keep their best staff, he said. “Competition for skilled labour is increasing rapidly and most businesses are at risk of losing their best people who may leave for a bigger paycheque.”
A comprehensive and locally relevant salary survey should be a part of every company’s toolbox to develop effective recruiting, retention and compensation policies, he said.
“Given the strong salary growth in Vietnam, almost all businesses are now under pressure from the labour market,” said David Jensen, project manager of Vietnam Salary Survey 2005. In such a context, the “Vietnam Salary Survey 2005” program is aimed at collecting data to support both domestic and foreign businesses in keeping pace with development trends of the local labour market and to outline all changes in the labour market to help foreign investors to successfully do business in Vietnam.
The salary survey showed that the salary in state owned enterprises (SOEs) has seen a higher growth rate than in foreign invested enterprises (FIEs). Though the average salary in SOEs is still 34 per cent less than in FIEs, the speed of salary rise in SOEs is 2-3 per cent higher than that of FIEs.
“This trend is a positive signal for the local economy, especially as local businesses try to raise their competitiveness in preparation for heightened integration into regional markets and Vietnam’s eventual entry into the World Trade Organisation,” he said.
Payments for workers from businesses operating in oil and gas exploitation, telecommunications, consultancies, real estate, furniture production and automobile industry are reportedly higher than those in food processing, tourism, construction and garment industry.
The survey found wages in Vietnam are not only keeping pace with, but in many cases are exceeding the country’s economic growth rate.
Blue-collar workers registered a 7.8 per cent increase in annual base net salary between 2004 and 2005, while white-collar jobs, including general staff, professionals and management, all averaged an annual base net salary rise in excess of 10 per cent.
Another significant finding is the enormous impact of education on earning potential, Jensen told the seminar, attended by more than 400 business managers and human resources professionals from across the country.
The salary of college graduates was 51 per cent more than those finishing vocational training education. The rate was 42 per cent for vocational training graduates and those completing senior secondary education.
University diploma holders earned 103 per cent higher than those graduating with college certificates, according to the survey.
Jensen said, "These education-income gaps are significant because they suggest that an education has almost an exponential effect on opportunities for promotion and career development, and a higher standard of living.”
For a country with as high a literacy rate as Vietnam, there is no choice but serious study to get good jobs.
Knowledge of salary payments and its affect on workers’ attitudes will help businesses make proper decisions on recruiting new staff. Apart from salary, almost all job seekers are also interested in other criteria such as working conditions and promotion opportunities, which should be taken into serious consideration by enterprises wanting to build an effective workforce in order to create long-lasting development and the success of their business.
Thuy Tien
Vietnamese
