VietNamNet Bridge – The pressure of workers not returning after the year's biggest holiday, Tet (Lunar New Year), is posing a serious problem for labour-intensive enterprises.

"There will be a serious shortage of labourers after Tet," said Nguyen Thi Tong, deputy secretary of the Viet Nam Leather and Footwear Association. "It would be a huge challenge for enterprises who have to fulfil signed export contracts."

Leather and footwear enterprises are the ones facing the highest risk of losing workers after Tet because a large number of contracted workers return to their hometowns in provinces for the week-long holiday and tend to stay back for longer periods.

The past years have seen workers having a tendency to take the Tet holiday, which closes off a working year, as a chance to quit their job. Poor pay and bad working conditions have been blamed for this trend. The past five years have seen this trend spreading, badly affecting their employers' business.

Along with the footwear industry, garment enterprises also use a large number of labourers from provinces, and are also faced with a similar exodus, resulting in a 10-15 per cent reduction in their production capacities.

The monthly salary that a garment worker earned last year was between VND3-4 million (US$150-200) in big cities and VND1.7-3 million ($85-150) in provinces. To keep their workers, many enterprises have increased salaries by 10-20 per cent every year. Other businesses, like Nha Be and Viet Tien garment companies, have supported their migrant workers with money to return home for Tet. Some companies, including Gia Dinh Garments, even organise buses to bring its workers to their hometowns for the Tet holiday.

There are many other reasons for the tendency among workers to quit their jobs after Tet, besides the poor pay.

High inflation has resulted in an increase in the cost of living in big cities, which makes it all the more difficult for those workers whose wages have not improved. Hence many of them choose to work in their home provinces, where they earn less but do not have to deal with high living costs.

Some enterprises have provided their migrant workers with accommodation at low rents to help reduce the burden of high living costs in big cities. Enterprises that are not able to offer such incentives face a higher risk of losing their workers after Tet.

The leading leather and footwear enterprises are mostly based in the south, which contributes more than 70 per cent of the industry's total export value, said Tong. HCM City accounts for the largest productivity in the sector with 40 per cent, followed by neighbouring Binh Duong Province, which contributes 25 per cent, and Dong Nai Province, 11 per cent.

The Dong Hung Footwear Company, one of the largest in Binh Duong, has more than 3,000 workers who are mostly from outside the province. The company faces a big challenge of losing workers after Tet which fell on February 3 this year.

"We have signed export contracts till the middle of the year," said company head Ha Duy Hung, adding that the company might have to recruit additional workers after the long holiday but "it takes time to train the new recruits, which would reduce productivity."

To deal with the shortage of labourers after Tet, many enterprises have adopted the practice of recruiting reserves.

According to the Employment Department under the Ministry of Labour, Invalids and Social Affairs, only 46 per cent of the recruits have got real jobs while the rest are kept on standby.

"The employers always recruit five to 10 times more than they need to have reserves, especially at the end of the lunar new year," said department head Nguyen Dai Dong, adding that such recruiters are mostly garment, leather and footwear companies.

This is just a short-term solution that will not promote sustainable development of the industry, said Dong.

As long as the payment policies of enterprises are not attractive and the labourers' income is still low, the exodus after Tet would still happen and would even get worse year after year, said Dong.

The average monthly salary of the workers in garment, leather and footwear companies is almost the same as the State-mandated minimum basic wage, said Dong.

Many people, after quitting their jobs in garment and footwear companies, have found jobs with better pay.

Working as housekeepers, vendors and even hired labourers can fetch better earnings than working in industrial parks, said Ha Noi-based worker Dao Thi Ly. She said she can earn VND100,000-120,000 ($5-6) per day hiring out her labour for whatever work she can do.

"It is good as I can still make as much money, even double what a worker earns by working for a company," said Ly, adding that she also enjoys the freedom of having no pressure and discipline imposed by any employer.

VietNamNet/Viet Nam News