Diep Thanh Kiet, vice chairman of the Ho Chi Minh City Association of Garments, Textiles, Embroidery and Knitting, estimated that workers in the garment industry have seen their living costs surge by at least 40 percent this year.

But their salaries have gone up just 12-15 percent, and many find it hard to make ends meet.

While the annual attrition rate at garment firms is 5-20 percent, Kiet said some are now choosing to return home to work instead of moving to another factory in the city.

It is much easier for a worker to get by on a salary of VND1 million (US$60) in Tra Vinh or An Giang provinces than to live in HCMC on VND1.6 million ($96) a month, he said.

Businesses paying workers less than VND1.5 million a month face the highest risk of losing them, he added.

Nguyen An, general director of the Saigon Garment Joint Stock Company, said businesses that can keep their employees would be the winners.

His company has started applying lean manufacturing principles to cut costs and has been able to raise the salaries of workers, he said.

The average basic salary of a worker is now VND2.8 million, an increase of VND700,000 since last year.

But few other city garment firms can afford to install a modern production line to cut expenses like the Saigon Garment Joint Stock Company.

Kiet said though many of them have not raised salaries yet, they pay their workers various allowances.

In other sectors, businesses are making great efforts to hold on to technical personnel.

Nguyen Thu Phong, general director of the Nha Vui Architecture and Construction Company, said chief construction engineers and skilled workers are paid a fixed salary regardless of the amount of work they do.

But it is not easy to develop a team of engineers and architects and the company would be a bigger loser if it fails to retain them, he explained.

Luong Si Khoa, general director of the Phu Gia Real Estate Company, said his firm slashed its advertising budget and cut telephone, electricity, water and stationery costs.

Flip side

Another result of the economic downturn is recession in some sectors, forcing them to downsize.

Many property firms have decided to delay their expansion and recruitment plans and so have had to downsize.

Some have even offered employees a 10 percent salary rise and other perks.

The harshest cost-cutting has been in the securities industry, where around 30 percent of the workforce has been laid off.

Vo Nguyen Khoi, chairman of the An Vinh Training and Consultancy Company, said there are three common ways of downsizing: laying off 30 percent of the staff but paying the same salaries to the rest; slashing 30 percent off the salary budget but keeping all the same staff, leading to the resignation of some; and both laying off 30 percent and cutting salaries by 30 percent.

But since most of the employees in the securities industry are trained, they can find jobs at banks or become accountants, he said.

Khoi, who is also deputy general director of the Dong Duong Securities Company, said his company did not want to lay off anyone.

Instead, it encouraged them to become sales executives and get commissions but take salary cuts.

If their employers show they really care – for instance by improving meals or offering petrol allowances – employees would sympathize with them, he said.

Source: TBKTSG