Vietnam - Korean Economic Forum hears concerns of enterprises over minimum wage hike and imbalance in human resources supply and demand.
The minimum wage for Vietnamese workers and human resources in general were the issues of most concern for South Korean enterprises, Chairman of the Korean Chamber of Business in Vietnam (KorCham), Mr. Ryu Hang Ha, told the Vietnam - Korea Economic Forum held in Hanoi late last week.
Mr. Ha asked for a clear mechanism on the minimum salary because enterprises believe it is too high.
“The minimum salary is to be increased 12.4 per cent this year,” the Chairman of the Vietnam Chamber of Commerce and Industry, Mr. Vu Tien Loc, said, adding that it is indeed high compared with inflation and labor productivity increases.
Any rise in the minimum wage must be suitable for enterprises, Mr. Loc noted. “A 12.4 per cent increase will lead to a 34 per cent increase in insurance payments,” he said.
The minimum wage has been changed over the last four years, he went on. Overall revenue in the enterprise community, meanwhile, has increased 40 per cent. He said he understands the effort being made by the Vietnamese Government to improve the living standards of workers.
Deputy Minister of Planning and Investment Dang Huy Dong said that Vietnam needs to not only improve living standards but also take care of the unemployed. If wage increases are too high it is possible that enterprises will not expand and fewer jobs will be created.
Mismatch in human resources
Vietnam is experiencing an imbalance in human resources demand based on area. Well-qualified engineers, for example, only want to work in major cities such as Hanoi and Ho Chi Minh City.
About 250,000 employees work in northern Bac Ninh province, but 60 per cent are not from the local area, Deputy Minister of Transport Nguyen Van Cong said. In the morning, before the work day starts, the roads around industrial zones are often clogged with buses taking thousands of people to their place of employment.
Mr. Loc said that whether workers wish to work in their local area depends greatly on the local policies in place. Agreeing, Mr. Cong suggested that provinces provide land for enterprises to build accommodation for workers. This stability would result in workers being more devoted to their companies and the province.
Mr. Dong added that there is mismatch between labor supply and demand, with many unskilled workers looking for jobs while skilled jobs go unfilled. It isn’t possible to open universities or training facilities everywhere, he said, so he suggested enterprises inform universities and training facilities about their needs to identify a solution.
Enterprises, Mr. Loc said, play an important role in training and as investors they need to link with training centers like universities and colleges.
- Vietnam - Korea Economic Forum
- Korean Chamber of Commerce and Industry
- Vietnam Chamber of Commerce and Industry
- Dang Huy Dong
- Vu Tien Loc