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Tower Watson, a global human resource consulting company, last week released a survey showing that staff turnover at foreign invested enterprises (FIEs) had reached a record high of 15.8 per cent this year.
The turnover rate indicates that FIEs in Vietnam still find it difficult to retain talent, as indicated by the Autumn survey, which involved 182 FIEs participated.
Jessica Lu, general director of Towers Watson Vietnam, said the high rate did not mean Vietnamese staff felt unsatisfied when working at FIEs.
“The main reasons contributed to the continuous high turnover rates are talent shortages and more opportunities elsewhere,” said Lu.
The survey underlines the major concern of many FIEs regarding an emerging talent war.
The high rate of staff turnover forces FIEs to pay more for human resources recruitments. The average salary increase reported by surveyed participants was 12.8 per cent, the highest in the last seven years, except 2008, due to high inflation.
“They have to bear more costs of hiring and training replacements and work on retention schemes to reduce the staff turnover rate,” said Lu.
In a recent survey conducted by Navigos Group, a leading executive recruitment solutions provider in Vietnam, 63.8 per cent of respondents ranked employee retention as the top human resource challenge in 2010.
Also, 57 per cent of respondents agreed that hiring talents was their second biggest challenge this year.
Navigos Group reported that 72 per cent of respondents had to increase human resources budgets by between 2 and 120 per cent this year.
Lu said most of the job hoppers had left for other FIEs, implying tough competition to secure talents.
The labour movement between FIEs is ascribed to some conditions Vietnamese workers are looking for.
Jos Langens, general director of VNRecruitment Company, noted that Vietnamese talents generally still opted for FIEs where they could practice English skills, “and they believe that foreign companies work more professionally so they can learn”.
Hiring projections continue to rise, especially in the sales and production functions and staff training and leadership development is the key component for budget increases, according to the Towers Watson survey.
“Organisations should consider adopting more flexible and practical ways to attract and retain talents,” said Nikki Nhue McKinnie, data services manager of Towers Watson Vietnam.
“Focusing on tailored-made career development programmes and designing middle to long-term performance rewards are keys to keep high performers and transform them into next generation leader candidates. It is essential for companies to benchmark with specific market data closely during this process,” McKinnie added.