Tin mới
FIEs bring jobs to a big labour pool (11/1)
11/01/2013 - 25 Lượt xem
Japanese-backed printer and fax machine maker Brother
Industries Vietnam Company Ltd. has since November, 2012 been actively
recruiting 2,000 local workers for its factory in Hai Duong province.
Meanwhile, Chinese-backed high-grade garment maker Texhong is now recruiting about 4,500 workers for its new garment and textile factory in Quang Ninh province.
And Japan’s Nissei Electric Vietnam Company, already employing 500 workers and producing components of printers, laptops, cell phones and sensors, is now in need of many workers working at its logistics, purchasing, interpretation sections. This company is also recruiting skilled engineers.
These foreign-invested enterprises (FIEs) have attracted workers with appealing salaries and allowances, training courses, good working conditions and good insurance packages.
“FIEs have played an important role in using local labour. Their continued recruitment means their production is developing and local workers’ livelihoods also improve. Also, workers are equipped with good skills and experience,” said Do Nhat Hoang, director of the Ministry of Planning and Investment’s (MPI) Foreign Investment Agency.
A big home to local labour
The MPI reported that from 1987 when Vietnam enacted its Foreign Investment Law to December, 2012, Vietnam attracted more than 14,100 FDI projects registered by over $206.5 billion, of which over $96.6 billion was disbursed. FDI currently created jobs for over 2.3 million local workers, from 309,900 in 2000.
Although employing only 4 per cent of Vietnam’s total labour, FIEs have spurred rapid labour growth—at 10 per cent in 2010 when the whole economy’s total labour growth rate was only 2.7 per cent.
The MPI reported that FIEs’ demand for local labour has kept growing, with 22 per cent in 2002, 76.87 per cent in 2003, 21.64 per cent in 2005 and 13.24 in 2010. Meanwhile, the average rate of the type in locally-owned enterprises was about 3 per cent only.
“Between 2005 and 2010, the FDI sector’s labour productivity was the highest in the whole economy,” said an MPI report on FDI attraction. “It was twice higher than that of the state-owned economic sector and 20 times higher than the private economic sector. That was the reason why the FDI sector created 19 per cent of gross domestic products.”
Also, in the 2006-2010 period, the FDI sector’s annual per capita labour productivity rose from VND125 million ($6,000) in 2006 to VND215 million ($10,325) in 2010. Meanwhile, that of the local private economic sector was VND6.58 million ($316.3) in 2006 and VND22.31 million ($1,072) in 2010. The respective figures for the state-owned economic sector were VND39 million ($1,875) and VND130 million ($6,250).
According to the Vietnam Industrial Investment Report 2011 jointly released by the United Nations Industrial Development Organisation and the MPI in May, 2012, though FIEs account for approximately 10 per cent of the total number of manufacturing enterprises, the FDI sector’s share in total manufacturing employment has been on a steady increase and over the last decade has hovered around 43 per cent of total manufacturing employment.
“Survey evidence suggests that on average the number of manufacturing employees in FIEs is greater than in either state-owned enterprises (SOEs) or private enterprises (PE). Interestingly, most workers (96 per cent of total employment) are engaged on a permanent basis, with the average share of permanent employees varying from 97 per cent for FIEs, 94 per cent for SOEs and 91 per cent for PEs. On the other hand, FIEs engage less non-permanent employees when compared to SOEs and non-state enterprises,” said this report.
Challenges remain
According to the MPI, one of the government’s prime targets for luring FDI until 2020 was to attract more local workers into FDI projects. To this end, improvement of the quality of local labour was a must.
At present, it remains a big question in coaxing high-quality FDI, because almost foreign investors were now finding it very difficult to seek enough skilled workers in Vietnam.
For instance, Canon Vietnam needed to employ 12,000 workers in total, but were able to identify 9,000 suitable candidates.
Actually, Nissei Electric, Texhong and Brother Industries said they had to recruit new workers every year, especially skilled ones, both due to expanded production and their workers’ job-hopping.
“Finding workers is of course a challenge in Vietnam, because of the increase in investments over the past decade. But the situation is manageable,” said Thomas Bo Pedersen, managing director of Danish-backed 1,500 staff Mascot International Vietnam.
“But it is an even greater challenge to find higher level staff with sufficient language and technical qualifications,” he continued.
“Therefore, it is very important that the Vietnamese government continue to have a strong focus on developing the education system in the country.”
Under a study over Vietnam’s vocational training released in mid-May, 2012 by the Central Institute of Economic Management and the Scientific Institute for Vocational Training, Vietnam had 1,630 vocational training schools annually producing over 1.6 million technical workers.
“But nearly all graduates from universities, colleges and vocational schools have no skills required by the country’s industrial sectors. Shortages of skilled workers have become increasingly serious, particularly now when input costs of enterprises are rising,” the study said.
Meanwhile, the European Chamber of Commerce’s Human Resources and Training Committee chairwoman Nicola Connolly said around 60 per cent of recent graduates in Vietnam were in need of retraining to meet the requirements of future employers in terms of knowledge, attitudes and skills.
“Due to the lack of satisfaction with general and vocational training, nearly 40 per cent of FIEs’ operations felt the need to invest in onsite training which was a massive burden on companies seeking to invest in Vietnam,” she said.
She said only 54 per cent of workers employed in FIEs were literate enough to be able to read and understand their labour contracts. Over 65 per cent of Vietnam’s workforce was either unskilled or skill-strapped with 75 per cent of these being 20-24 years old.
Source: VIR
Meanwhile, Chinese-backed high-grade garment maker Texhong is now recruiting about 4,500 workers for its new garment and textile factory in Quang Ninh province.
And Japan’s Nissei Electric Vietnam Company, already employing 500 workers and producing components of printers, laptops, cell phones and sensors, is now in need of many workers working at its logistics, purchasing, interpretation sections. This company is also recruiting skilled engineers.
These foreign-invested enterprises (FIEs) have attracted workers with appealing salaries and allowances, training courses, good working conditions and good insurance packages.
“FIEs have played an important role in using local labour. Their continued recruitment means their production is developing and local workers’ livelihoods also improve. Also, workers are equipped with good skills and experience,” said Do Nhat Hoang, director of the Ministry of Planning and Investment’s (MPI) Foreign Investment Agency.
A big home to local labour
The MPI reported that from 1987 when Vietnam enacted its Foreign Investment Law to December, 2012, Vietnam attracted more than 14,100 FDI projects registered by over $206.5 billion, of which over $96.6 billion was disbursed. FDI currently created jobs for over 2.3 million local workers, from 309,900 in 2000.
Although employing only 4 per cent of Vietnam’s total labour, FIEs have spurred rapid labour growth—at 10 per cent in 2010 when the whole economy’s total labour growth rate was only 2.7 per cent.
The MPI reported that FIEs’ demand for local labour has kept growing, with 22 per cent in 2002, 76.87 per cent in 2003, 21.64 per cent in 2005 and 13.24 in 2010. Meanwhile, the average rate of the type in locally-owned enterprises was about 3 per cent only.
“Between 2005 and 2010, the FDI sector’s labour productivity was the highest in the whole economy,” said an MPI report on FDI attraction. “It was twice higher than that of the state-owned economic sector and 20 times higher than the private economic sector. That was the reason why the FDI sector created 19 per cent of gross domestic products.”
Also, in the 2006-2010 period, the FDI sector’s annual per capita labour productivity rose from VND125 million ($6,000) in 2006 to VND215 million ($10,325) in 2010. Meanwhile, that of the local private economic sector was VND6.58 million ($316.3) in 2006 and VND22.31 million ($1,072) in 2010. The respective figures for the state-owned economic sector were VND39 million ($1,875) and VND130 million ($6,250).
According to the Vietnam Industrial Investment Report 2011 jointly released by the United Nations Industrial Development Organisation and the MPI in May, 2012, though FIEs account for approximately 10 per cent of the total number of manufacturing enterprises, the FDI sector’s share in total manufacturing employment has been on a steady increase and over the last decade has hovered around 43 per cent of total manufacturing employment.
“Survey evidence suggests that on average the number of manufacturing employees in FIEs is greater than in either state-owned enterprises (SOEs) or private enterprises (PE). Interestingly, most workers (96 per cent of total employment) are engaged on a permanent basis, with the average share of permanent employees varying from 97 per cent for FIEs, 94 per cent for SOEs and 91 per cent for PEs. On the other hand, FIEs engage less non-permanent employees when compared to SOEs and non-state enterprises,” said this report.
Challenges remain
According to the MPI, one of the government’s prime targets for luring FDI until 2020 was to attract more local workers into FDI projects. To this end, improvement of the quality of local labour was a must.
At present, it remains a big question in coaxing high-quality FDI, because almost foreign investors were now finding it very difficult to seek enough skilled workers in Vietnam.
For instance, Canon Vietnam needed to employ 12,000 workers in total, but were able to identify 9,000 suitable candidates.
Actually, Nissei Electric, Texhong and Brother Industries said they had to recruit new workers every year, especially skilled ones, both due to expanded production and their workers’ job-hopping.
“Finding workers is of course a challenge in Vietnam, because of the increase in investments over the past decade. But the situation is manageable,” said Thomas Bo Pedersen, managing director of Danish-backed 1,500 staff Mascot International Vietnam.
“But it is an even greater challenge to find higher level staff with sufficient language and technical qualifications,” he continued.
“Therefore, it is very important that the Vietnamese government continue to have a strong focus on developing the education system in the country.”
Under a study over Vietnam’s vocational training released in mid-May, 2012 by the Central Institute of Economic Management and the Scientific Institute for Vocational Training, Vietnam had 1,630 vocational training schools annually producing over 1.6 million technical workers.
“But nearly all graduates from universities, colleges and vocational schools have no skills required by the country’s industrial sectors. Shortages of skilled workers have become increasingly serious, particularly now when input costs of enterprises are rising,” the study said.
Meanwhile, the European Chamber of Commerce’s Human Resources and Training Committee chairwoman Nicola Connolly said around 60 per cent of recent graduates in Vietnam were in need of retraining to meet the requirements of future employers in terms of knowledge, attitudes and skills.
“Due to the lack of satisfaction with general and vocational training, nearly 40 per cent of FIEs’ operations felt the need to invest in onsite training which was a massive burden on companies seeking to invest in Vietnam,” she said.
She said only 54 per cent of workers employed in FIEs were literate enough to be able to read and understand their labour contracts. Over 65 per cent of Vietnam’s workforce was either unskilled or skill-strapped with 75 per cent of these being 20-24 years old.
Source: VIR
