Vietnam's growing retail sector has resulted in a boom in personnel demand, with competition heating up to attract and retain qualified staff.
Having worked in a number of positions in retail, such as Store Manager at the Parkson Department Store and General Manager at Lotte Department Store, 36-year-old Mr. Phan Anh is quite satisfied with his current position as Deputy Sales Manager at Aeon Mall. His career progression reflects the increasing demand for retail personnel given that many retailers such as Lotte, Big C, Aeon, and Central Group are expanding their operations in Vietnam. “I like my job at Aeon Mall,” he said. “The experience I gathered in my previous positions helps me to fulfill the role.”
Mr. Phan Anh’s career path is not unique, as since the end of last year a number of international names have appeared in Vietnam’s retail sector, such as Lotte, Aeon, and B’s Mart. Competition between these enterprises not only exists in market share, customers, and outlet numbers, but also in the field of human resources (HR). This stems from an inadequate supply of good staff in the retail sector, while the number of supermarkets, commercial centers, and convenience stores continues to grow apace.
“Many people believe that the retail model in Vietnam is saturated. But, in fact, in Vietnam and especially in Hanoi the retail sector still has a lot of potential. In many countries around the world, for every 1,000 people there is one convenience store. Vietnam, in the future, will see many different types of retail so the sector will always have potential.”
Mr. Phan Anh, Deputy Sales Manager at Aeon Mall
According to a Navigos Search report on the labor market in the second quarter, retail accounted for 13 per cent of total recruitment demand; the highest of all sectors. Sales, floor manager, sales manager and director position are most sought after. A representative from Navigos Search said that the retail sector has undergone the most dramatic changes in recent times, because many new businesses, both domestic and foreign, have entered the field. The HR Insider report from Vietnamworks, meanwhile, also noted that in the first half of this year recruitment demand has grown enormously, in which retail is one of the highest growing sectors, at 58 per cent year-on-year.
Big C has recruited hundreds of employees over the last two quarters, in both sales and office positions, primarily in Hanoi and Ho Chi Minh City. Middle and senior personnel accounted for about 10 to 15 per cent and its recruitment plan has met about 95 per cent of the target. Among positions successfully recruited were ten in middle-management and senior positions. “Many foreign retailers have boosted their business investment in Vietnam, which is putting pressure on demand for personnel, especially people who have extensive experience,” Ms. Duong Thi Quynh Trang, Vice President of the HR Department at Big C, was quoted as saying.
Lotte Mart Vietnam, meanwhile, said that in the past two quarters it had recruited 574 new employees. Positions were mostly counter staff, cashiers, supervisors, and floor managers in its supermarkets, and specialist positions in procurement, marketing, leasing, and project development in its office. According to Ms. Bui Thi Phi, Director of the HR Department at Lotte Mart, the positions were split evenly between office and supermarket. The number of senior personnel accounted for 12 per cent while middle-management accounted for 18 per cent. “This figure is expected to increase remarkably as Lotte Mart aims to expand to 60 supermarkets throughout Vietnam by 2020,” Ms. Phi said. “Lotte Mart now has 50 people at the management level and by 2020 will have 400.”
“Demand for high-level personnel is increasing quickly while the high quality workforce needed to meet the needs of the market is limited. This is the result of shortcomings in human resources training and education in Vietnam.”
Ms. Bui Thi Phi, HR Director at Lotte Mart Vietnam
It’s clear to see that people who have experience in the retail sector, like Mr. Phan Anh, now have many more job opportunities. For employers, however, selecting senior and experienced personnel such as Mr. Phan Anh is no easy task. Most senior personnel still lack skills in managing staff. With the competition between retailers, many change jobs quite frequently but are yet to reach the maturity needed for a management role. Soft skills training is still not a priority of retailers, because it can be rather costly. “Many large retailers continue to engage foreigners to manage and run their systems rather than Vietnamese, due to the lack of skills among Vietnamese personnel,” according to Mr. Phan Anh.
As domestic retailers such as Vincom and Saigon Co-op Mart are increasingly expanding their business scale, many foreign retailers such as Big C, Central Group, and Aeon are doing likewise and this is much to the advantage of skilled employees. “To recruit a person with the experience requires offering a high salary,” Ms. Phi said. “Choosing someone without a great deal of management experience, meanwhile, involves time and cost in providing training.”
With such intense competition continuing into the future, she went on, retaining talented staff means offering attractive employment conditions. Many of the new players have been quick to introduce better salary and bonus regimes and other benefits to attract personnel from their rivals. This has forced the older businesses in the market to adopt solutions to retain their existing employees. Ms. Phi told VET that in addition to fully implementing the provisions of the Labor Law, Lotte Mart has offered additional benefits to employees, such as accident insurance. Supermarket managers and marketing officers also receive skills training and support in travel costs and other essential expenses.
However, according to an expert in HR, higher salaries and more benefits will only solve the immediate challenges being faced by retailers. Training and development for employees is crucial, so sooner or later retailers will need to build training programs to develop their staff, and this will see them attract new employees and retain their existing talent.