Foreign companies in Vietnam face labour shortages

Posted by Earth Times Staff
15/11/2010


Hanoi - Foreign manufacturers in Vietnam have difficulty finding enough workers, despite increases in salaries, company and government officials said Monday.

The labour shortages are driven in part by rising prices and competition from higher-paying local jobs, the officials said.

"The labour shortage is a problem not just for foreign-invested companies right now, but for domestic companies too," said Nguyen Thi Thanh Minh, of Panasonic Vietnam Company, Ltd. "With inflation increasing, it's hard to find workers."

Taiwan microelectronics manufacturer Foxconn International Holdings Ltd has been able to recruit just 3,000 of the 5,000 employees it needs to man two new factories, the Vietnam Investment Review reported Monday.

"In Bac Giang province, ordinary labourers like bricklayers get 100,000 to 150,000 dong (10 to 15 dollars) per day, while factory workers get an average of 2 million dong per month," said Nguyen Dai Dong, Head of Vietnam's Labour and Employment Agency.

"Workers want to work outside of companies, because they are more free and get a much higher income." Foreign manufacturers are finding it "very difficult" to find new employees, said an executive at Mitsubishi Corp in Hanoi who asked not to be named.

Workers say they are feeling pressured by rising prices. Monthly inflation in Vietnam hit 1.05 per cent in October, and analysts expect overall inflation for 2010 could reach 9 per cent.

The government this month raised the minimum wage to up to 77 dollars per month effective January 1, but most foreign companies already pay their employees more than that. Dong said companies would need to pay wages competitive with local salaries, rather than the minimum wage, if they expect to find the workers they need.

The dong has depreciated rapidly against the dollar in recent weeks. That could help foreign manufacturers who earn dollars to keep up with wage inflation, but only to a certain extent, analysts said.

"Export firms cannot really afford to raise wages faster than the currency is depreciating," said Jonathan Pincus, dean of the Fulbright Economic Training Program in Ho Chi Minh City.

"When the company increases labourers' salaries, it will make our production expenses increase," Minh said. "But we will just have to do that."