[Vnbiz] Labor shortage pushes salaries up

[Hoang Thanh]

12 Apr 2007

Labor shortage pushes salaries up 12. 3% in 2006

*SGT-HCMC*

The shortage of labor, especially professional and experienced employees,
caused the average salary in Vietnam to grow 12. 3% last year and experts
expect similar or higher growth this year.



Jonah Levey, chief executive of­ficer and founder of Vietnam' s lead­ing
human resource services provider Navigos Group, said this year would see
salaries rising by over 12% and more than 16%

in some industries.



Financial service is one of the industries that experience the high­est
salary growth rate, Levey told the Daily after the Vietnam Salary Survey
2007 Seminar in HCMC yesterday, which attracted more than 200 participants.



Le Thi Ngoc Huong, managing director of Aon Risk Services Viet­nam, said
financial institutions and consumer goods companies faced a serious lack of
skilled labor.



Therefore, the companies have to offer high salaries if they want to retain
qualified labor.



Huong said companies often targeted an annual salary increase of 12-17% but
many were unable to realize this goal. "The real in­crease rate is much
higher and we sometimes have to revise the rate up by 20-30%."



However, Huong said on the side­lines of the seminar that high sala­ries
were not the optimal solution to retain the best employees, as they would
turn to the employers who are ready to offer them higher pay.



She said employees also cared about other benefits such as yearly bonuses,
health insurance, train­ing, cars and homes. A stock op­tion scheme is also
a good choice.



Being optimistic about Vietnam's labor market, Levey of Navigos said the
market had become more com­petitive and was developing fast.



But he pointed out the gap between supply and demand as one of the biggest
challenges.



"There's more demand and there aren't qualified workers to meet the demand,"
Levey "said, stressing Vietnam's education system needed a catch-up to
produce quali­fied labor.



Levey said a salary increase was positive. "Salary is decided by the market
and the market is healthy, and therefore the salary increases," he said
referring to the survey, which Navigos spent six months from the fourth
quar­ter of 2006 collecting salary data from over 28, 000 people from 156
companies in Vietnam.



The survey shows foreign com­panies on average pay their em­ployees 14% more
than private Viet­namese companies do. But the lo­cal companies will catch
up with their foreign counterparts within the next five to seven years.

*By MONG BINH*

-- 
Hoang Thanh Thanh
Vietnam Digital Television VTC
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