Vietnam - Foreign firms lure staff with bumper pay packs

VietNamNet Bridge – There is a marked difference in salaries paid by foreign companies and Vietnamese companies, a survey has found.

The gap was 19 per cent at the staff level, widening to 25 per cent at the professional level and to 30 per cent or more at the management level, the survey by US-based HR consultant Mercer and TalentNet, its associate, done last year found.

But with local companies often paying much larger bonuses, the gap in total salaries narrows a bit.

Though local firms often pay outside their salary range to poach talent from multinational companies, there remains a marked difference in wages, especially at the management level.

The survey also points out that at foreign firms, the salaries of managers and executives span a wide range.

They pay greater attention to the salaries of management-level employees, who play a vital part in the company's development, while local companies still do not differentiate between management and staff salaries.

Salary increases last year were higher than the 9.5 per cent inflation forecast. Multinationals hiked salaries by an average of 13 per cent, while local companies increased them by 13.3 per cent.

Individual and company performance and market competitiveness were the most important factors affecting salary rises at multinational and local companies.

With the state of the economy being what it was last year, companies were selective in recruitment, especially at senior levels.

Hiring was limited, with companies opting to promote internally to create opportunities, both by retaining talent and encouraging employees to discover their hidden capacities.

This way they managed to save on the costs of new recruitment and avoid the risk that new employees would not fit in with the company culture.

Firms have been becoming more flexible about placing Vietnamese in senior management positions, which used to be filled only by foreigners.

Finance sector stable

Recruitment needs in banking and finance were stable in the first half of last year but decreased in the second.

Some other sectors like consumer goods, pharmaceuticals, and manufacturing also hired.

In terms of employees looking for new roles, the labour market was not as active as in previous years.

For senior employees in particular, salary was no longer a main concern; instead, when considering a job, they sought more details about the employer's strategy and the company's vision, mission, management, and culture to understand whether the role and company was a match for their values and expectations.

There was a tendency for employees to demonstrate higher commitment and loyalty to their employers, and to look for more and better information about the labour market, industry, and other key factors to make appropriate choices.

A total of 371 firms in 13 industries — including consumer goods, technology, manufacturing, chemicals, pharmaceuticals, financial services, oil, and mining —took part in the survey.

More and more domestic companies have been participating in the salary survey and using its findings to compare their salaries with the market rate, the report said.

Source: VNS

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