Foreign investors double-crossed by labour shortage in Vietnam?

09:01 | 23/01/2019
Continuously expanding foreign businesses and the wave of foreign investors relocating from China may make the chronic shortage of skilled workers more dire in Vietnam.  
foreign investors double crossed by labour shortage in vietnam
Hiring skilled workers remains a significant challenge for recruiters in Vietnam

This concern was expressed in Navigos Group’s latest report on middle- and high-level personnel demand in 2018’s fourth quarter. Accordingly, the Vietnamese labour market has seen significant impacts from free trade agreements (FTAs) and foreign investment capital in late 2018.

The report also revealed that along with the wave of investment movement from China, the expansion of business-scale of foreign-invested enterprises (FIEs) in northern Haiphong city and Bac Ninh provinces are increasing demand on local midde- and high-level personnel for positions like factory managers, office managers, and assistants.

In fact, the shortage of high-end personnel is not a new thing in Vietnam. According to the General Statistic Office of Vietnam’s (GSO) latest survey of Vietnamese workers, the number of non-skilled labourers still accounted for 77 per cent of the total labour force, while university graduates only accounted for less than 10 per cent.

It could be said that the movement trend of investors in China both boost improving Vietnamese labourer quality and set challenges for the firms to run business in Vietnam. The challenges will be bigger with electronic firms, which require labourers with huge demand on high-skilled labourers.

Discussing the issue with VIR, Nguyen Phuong Mai, managing director of Navigos Search, a company specialised in middle- and high-skilled recruitment under Navigos Group, said that although the majority of Vietnamese labourers are in the golden age, they have yet to meet the demands of recruiters. Their findings stated that many recruiters in Vietnam are facing difficulties to hire high-skilled labourers.

In fact, many firms have begun planning relocating from China since late last year. In October, GoerJek – a Chinese firm assembling Apple’s wireless earphones (AirPods) – has just notified its suppliers about its plan to transfer production and business operations to Vietnam.

Similarly, Nikkei stated that despite already running an iPhone earphone manufacturing facility in northern Vietnam, the firm still intends to run away from China due to the risk of suffering damage from the US-China trade war.

In addition to GoerJek, other Apple assembly manufacturers also have similar intentions. Specifically, Cheng Uei, a Taiwanese firm specialised in manufacturing connecting wires and charger equipment for iPhones, and Petragon, the second largest iPhone assembly firm only behind Foxconn, has just revealed plans to transfer manufacturing lines to Taiwan or Southeast Asian countries like Vietnam, Thailand, and the Philippines.

Previously, Taiwan-based Delta Electronics, which specialises in supplying components for iPhones and Macbooks, stated that the firm will focus on its subsidiary's business in Thailand, then expand to India and Slovakia.

By Van Anh

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