A good HR management strategy must accompany the business strategy and create sustainability for enterprises.
When it started out 20 years ago the Thien Minh Group (TMG) had just a couple of staff, most of whom were Vietnamese. It's now grown into a multinational company in the hospitality industry, operating in 14 countries in Asia, North America and Europe, and has more than 2,500 staff, of which 800 are foreigners, from Laos, Cambodia, the UK, the US and elsewhere. It recently became one of five Vietnamese companies on a list of top globally-developed companies in 2014 prepared by the World Economic Forum. The group's human resources (HR) and HR management policies were a major factor in this success, CEO Tran Trong Kien told the "Efficiency of HR Through the Prism of CEOs" seminar held in August in Hanoi by Talentnet as part of the launch of its Vietnam HR Awards 2014.
It can't be denied that HR play a very important role in the economy in general and at enterprises in particular. Integration has brought Vietnam opportunities but also challenges, and the process demands investment in HR. An enterprise can have modern technology, good quality services, and solid infrastructure, but will struggle to survive in the long term and build up its competitive advantages without good HR. In the ever-changing modern world success will most likely come to enterprises that can attract and retain talent.
Mr Kien said that the success of TMG is due to its business strategy and it HR management. The group has a clear business strategy of not only operating in Vietnam but also going beyond the country's borders. Vietnamese was replaced by English at the group, so that foreigners were able to work there. A culture of equality is also promoted. "Security guards, drivers, hotel receptionists and so on all have access to the CEO," he said. Moreover, the CEO must be able to perform his own tasks as well as encourage talent from elsewhere to come to the company. "For me, leadership is not about power, but about responsibility and honour," he said.
Ms Pham Thanh Van, who was previously the HR Director of the UK-registered BP in Vietnam and is now a certified executive coach, agreed that an effective HR management strategy must follow the business strategy. In the case of TMG, she said, it adopted its business strategy first and then an HR strategy of recruiting both Vietnamese people and foreigners. An HR strategy need not be huge; it can be simple but must suit the company. "Although there are many challenges, when companies adopt a roadmap they should not change it but should change the tactics within that strategy as different situations arise," she said.
Ms Tieu Yen Trinh, General Director of Talentnet and Deputy Chair of the Vietnam HR Awards, confirmed that HR management, which is considered the catalyst for enterprises' operations to run more smoothly and for staff to perform to the utmost, is receiving greater attention from government and from enterprises. "The HR strategy is a key tool that enables HR management to achieve the greatest efficiency," she said. She agrees that an effective HR strategy is one that is linked closely to the business strategy and is in parallel with the demands and changes in the business.
"Observing the changes in enterprises through every stage of the economy and from meeting with CEOs of domestic and international companies, I believe that it is difficult to deny that a large, powerful and sustainable HR strategy creates a solid foundation for company development. Therefore, a long-term HR strategy and an HR system that cares about workers' lives and considers them as a key asset will encourage working spirit and motivate them to work hard and be devoted to the company's success."
Ms Tieu Yen Trinh, General Director of Talentnet and Deputy Chair of the Vietnam HR Awards
"To assess the efficiency of human resources we usually measure it by numbers. For example, how many people over six months, a year or two years will become stars of the group. Next, we measure it by recruiting and retaining human resources. The less staff that leave the company, the better. Staff satisfaction is also a very important factor in measuring an effective HR strategy. When I go to any company in the TMG Group and talk with security guards, receptionists or others, I can feel their satisfaction through the way they talk to me. Many of our staff have worked for us for 20 years and there are others who don't see an opportunity to be promoted but still want to work for us because they feel satisfied."
Mr Tran Trong Kien, Chairman and CEO of TMG
If the focus on developing human resources is not linked to the targets of the enterprise then all effort in the former to promote staff performance will go to waste. Mr Kien said that TMG considers its HR strategy to be a key factor within its general strategies to continue growing strongly. "We focus on creating the best working environment for our staff and helping them to develop together with the growth of TMG, to make TMG the top destination of young talent in our business field," he said. If the HR strategy fails to follow the business strategy, it will be difficult for the company to succeed. "As the development phase of a company changes, the HR strategy must also change," he said.
In the case of VPBank, CEO Nguyen Duc Vinh said that the HR development strategy being linked closely to the business strategy is particularly important during restructuring and transformation. "We have invested in building and developing our human resources systematically and professionally, so they are able to access modern management methods and skills to achieve our strategic targets in the 2012-2017 period and ensure our sustainable development," he said.
"Enterprises should recognise their human resources as a valuable asset and must invest properly in this asset. A formal HR system and the capacity to develop will help enterprises to overcome hardships in competing. In order to retain talent, salary and bonuses are just one part. The working environment is also very important and many enterprises retain their staff by showing them their development potential and providing opportunities for staff to be promoted."
Mr Pham Phu Ngoc Trai, Chairman and CEO of Global Integration Business Consultants (GIBC)
"Through a survey process, we found that although many enterprises don't actually have a professional HR system, each implements HR policies differently and this expresses their own characteristics and are consistent with local culture. However, to help enterprises have long-term, strong development, professionalism and standardisation of HR strategy is essential in creating a solid step forward in parallel with the business strategy of enterprises."
Mr Edward Foong, CEO of Treino Consulting Company and Honorary Secretary of the Singapore Human Resources Institute (SHRI)
According to Mr Vinh, an effective HR strategy involves CEOs being one step ahead of their human resources and a strong HR strategy must create sustainability. "I think that recruiting talent is very important but not as important as creating a sustainable system so that talent will come to us automatically," he said. Moreover, a good HR strategy will create the conditions for staff to improve their abilities and then give them opportunities to develop. It is not enough to have qualified staff, he said; companies must know what to do to encourage them to exhibit their abilities and be devoted to their employer. "I know many talented individuals who are working without enthusiasm," he said. "They only work their eight hours and then go home, and at the end of the month receive their salary. This is a terrible waste." Therefore, "with a good system we can create an environment for them to develop in, and they will work harder and be more devoted to the company," he said.
Ms Trinh from Talentnet added that, in Vietnam, each enterprise has been implementing an HR strategy according to its own characteristics, but in order to create the foundation for sustainable development these strategies needs to be standardised.
|The Vietnam HR Awards 2014, the first-ever awards in the human resources industry in Vietnam, is being co-organised by the Labour & Social Affairs newspaper under the Ministry of Labour, Invalids and Social Affairs, and the Talentnet Corporation, using the exclusive methodology of the Singapore Human Resources Institute (SHRI). The awards honour enterprises with excellent HR management policies and implementing effective HR strategies, and create a venue for enterprises to learn and share good HR policies. The award has five categories:
The Judging Panel includes domestic and international experts with experience in and in-depth knowledge of HR.