Vietnam is heading towards skills-based labor market

With nearly 100 million people, Vietnam is among the most populous countries in the world. After more than 35 years of national renovation, Vietnam's labor market has made great strides in both scale and quality. In particular, the system of institutions, laws, and labor market policies has been gradually improved; workers' wages have been improved markedly, and the productivity and competitiveness of the labor force have been raised.

However, according to the assessment of the Ministry of Labor, Invalids and Social Affairs, the labor market still reveals shortcomings though it is recovering and developing. In particular, the quality of labor supply has not met the needs of the labor market because the number of highly qualified and skilled workers is still low.

Specifically, the proportion of trained workers accounted for only 26.4 percent of the total 52.2 million people of working age in the first quarter of 2023.

Besides, the quality of skilled human resources has not yet met the development requirements of the labor market and the national competitiveness is still low, not taking full advantage of opportunities of the golden population period to attract FDI investment resources. Last but not least, there are not enough sustainable jobs in the job market to meet laborers’ employment demands.

According to the General Statistics Office, the country currently has over 38 million workers without professional and technical qualifications. The average income of employees is not high with an average VND7 million a month in the first quarter of 2023. The data shows that the labor market in Vietnam still has an imbalance between local labor supply and demand and uneven development among regions, regions and economic sectors.

The Center for Forecasting Human Resource Demand and Labor Market Information in Ho Chi Minh City announced that although many businesses thirst for qualified and skilled workers, in many places, skilled workers must work in a field that does not require much in terms of skills and qualifications or many workers don’t work in the field which they are trained. This is a waste of brainpower in the current labor market.

In addition, the theory-burdened training program lacks teamwork skills, foreign language skills, critical thinking, creativity, and technology compliance; plus, there has been no connection between schools - enterprises in vocational training.

During the meeting with departments and agencies in the fields of culture, education, labor and employment, Chairman of the Ho Chi Minh City People's Committee Phan Van Mai asked the units to focus on improving the capacity of vocational training institutions especially in the field of digital economy, digital transformation and science - technology to improve the quality of training for meeting the needs of the market.

The Chairman requested competent agencies to invest in facilities and technical equipment for teaching with the aim to meet the increasing requirements of the labor market as well as improving the income for workers.

Analyzing the weaknesses that new graduates often encounter, Mr. Tran Minh Tu, General Director of Kem Nghia Company in Ho Chi Minh City’s Cu Chi District, said that in the past, the company must re-train the majority of newly-recruited employees. However, recently, to meet the requirements of partners, the company accepts to pay high salaries to recruit highly skilled human resources for reducing training time and increase labor productivity.

Mr. Tran Anh Tuan, Vice Chairman of Ho Chi Minh City Vocational Education Association, said that in the coming time, there will be a problem with changing career structure in the trend of changing from simple occupations to specialized technical occupations. Especially, after the Covid-19 epidemic, countries and territories have a high demand for medical human resources. Therefore, in order to meet the requirements of the domestic and international markets, it is necessary to focus on training highly qualified human resources and in line with the shifting trend.

Meanwhile, an analysis of enterprises’ recruitment requirements and workers who are looking for a job on the portal of the Ministry of Labor, Invalids and Social Affairs in the first quarter of 2023 showed that approximately 16,730 enterprises have been posting 75,285 recruitment ads and around 72,458 workers have been looking for work. Only 8.3 percent of enterprises do not require professional and technical qualifications whereas up to 49.4 percent of firms want to recruit a university degree or higher.

The highest recruitment demand lies in the groups of occupations requiring high professional qualifications such as software developer, network administrator, network security, and data and communication specialist.

According to the Center of Forecasting Manpower Needs and Labor Market Information in Ho Chi Minh City, the labor market will head towards high-quality and skilled human resources. In addition to the requirements for professional qualifications, employers require employees to have professional skills, labor discipline, the ability to apply information technology and fluency in foreign languages.

Therefore, it is necessary to improve the quality of human resources with a focus on training to improve practice capacity, increase practice time, vocational skills in association with the training industry, and some necessary social practical skills for good participation in the labor market.

Source: SGGP