Massive production relocation from China to Vietnam spikes surge in labor demand

China was the largest source of greenfield Investment in Vietnam in Q1/2019 with US$732.2 million, accounting for 18.9% of the total.

Massive production relocation from China to Vietnam spikes surge in labor demand

As Sino-US trade tensions have continued to weigh, multinational companies have been shifting their production facilities from China to Vietnam and recruiting a large number of employees, leading to a surge in manpower demand and even temporal shortage, especially in Ho Chi Minh City and surrounding provinces, according to Navigos Group, the operator of Vietnam’s biggest job portal Vietnamworks.

Production shift from China to Vietnam has been evident as trade friction between the world's two largest economies have shown no signs of easing. Among 42 countries and territories that had fresh projects in Vietnam in the first quarter this year, China was the largest investor with US$732.2 million, accounting for 18.9% of the total, according to Vietnam's General Statistics Office (GSO).

Challenges of recruiting and retaining talents in manufacturing

In its latest report on recruitment demands for senior management level in Vietnam in the first quarter of 2019, Navigos said the trend has been growing strongly, especially in “supporting industries and wood furniture industry.”

Additionally, “there are projects that launch new factories in Vietnam, which are expected to greatly increase the number of employees by double, or triple during the year, especially in the field of electronics, high-end components manufacturing,” stated the report.

The vacancies are mainly in Supervisory and Management positions, and the recruitment demand is expected to increase steadily until the companies operate stably. Besides, Chinese businesses also require candidates who must speak Chinese.

Meanwhile, the manufacturing and processing continued to attract substantial attention out of the 18 fields and sectors, reaching an investment capital of US$8.4 billion or 77.7% of total FDI approvals.

This resulted in a sudden rise in demands for recruitment in the sector, mainly due to the need for enterprises to expand their production or restructure, leading to a challenge for employers in attracting and retaining talents, causing candidates movement within companies in the same industry, stated Navigos.

In Ho Chi Minh City, compared to other industries, manufacturing and industry is the sector that is reportedly paying the highest salary for many middle and high-level positions. The experienced engineer position can be paid a monthly salary of US$4,000 while in Management level has a position that pays up to US$8,000.


Other sectors pushing up recruitment demand

In addition to manufacturing and processing, other sectors including retail, real estate, FMCG and agriculture have also pushed up the recruitment demand.

In the first quarter, Navigos noted the trend of franchising of international and domestic companies, especially in the sector of Cosmetics, Fashion, Food and Beverage (F&B). This trend leads to a high demand for recruiting positions from mid-senior to senior management.

Meanwhile, there are several multinational enterprises launching for the first time in Vietnam, notably in the field of FMCG, including food, beverage, liquor, and cosmetics.

These foreign companies’ model that directly manages to develop business, increase brand image, implement promotion programs, among others, leads to a sharp increase in recruitment demand those positions related to the Sales and Marketing department from staff level to senior management position. In particular, skills related to digital marketing and e-commerce are prioritized as a result of the development of 4.0 era.

In the real estate sector, there appear to be mergers and acquisitions deals in the real estate sector which took place from the end of 2018 and were completed in 2019 but not yet widely communicated. This led to the need to recruit C-level positions.

With regard to the agricultural sector, many companies have been implementing 3F agricultural models (feed – farm – food). Besides, companies invest large amounts of capital into modern production lines, applying European standard technologies.

The trend of developing this new agricultural model has led to more changes in the recruitment requirements of enterprises. Two areas with a high demand for jobs are farming and veterinary. Most businesses need to recruit many positions from the middle level and require candidates to have in-depth technical knowledge. Hanoitimes

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