Common HR Issues For Foreign Companies in Vietnam
- Author Dezan Shira
- Published June 27, 2011
- Word count 416
Even though they are usually better off than local Vietnamese companies, it seems that many foreign invested enterprises (FIEs) established in the country encounter hardships to follow the general evolution in terms of human resource (HR) management. Although one of the major advantages for foreign companies to invest in Vietnam remains the low cost of the workforce, the situation is changing for skilled labor, especially for the light and heavy industrial sectors. On average, salaries are rising, working-conditions are getting better, and policies are becoming more precise in Vietnam, but many FIEs are dragging behind.
Remuneration claim
It is commonly thought that employees have a better income in FIEs than in domestic companies. This isn’t necessarily true and actually, although they usually get added bonuses and incentives, their basic salaries tend to be quite lower.
According to Tran Dinh Thien, head of the Vietnam Institute of Economics, blue-collar workers in FIEs are paid less on average (VND1.2 million/month) than those working in the local public and private sectors. And the gap is even wider for labor-intensive business fields (garment/textile, leather, footwear, wood processing). Furthermore, many FIEs have difficulties to bring their HR practices in line with government policies.
Over the past few years, the government has clarified the salary issues, but some FIEs still keep their complex salary systems. Also, even if the minimum wage is adjusted every year under the country’s labor regulations, many individuals employed at FIEs earning more than the minimum wage (depending on the location of the employee) have not seen any subsequent changes in their salaries. Finally, the various bonus and incentives systems are frequently a source of conflict, notably because they are often not clearly specified in the work contract.
Work conditions claim
Income amount is not the only claim; salary claims go along with demand for better working-conditions. In fact, overtime work is widely used in FIEs with only 52 percent of workers in FIEs working eight hours a day, while 6.5 percent worked over 10 hours per day, according to the Vietnam General Confederation of Labor & Trade Union. Furthermore, FIE employees generally have to work under higher pressure than their counterparts in Vietnamese companies. However, workers in foreign companies consider the compensation they receive is not sufficient considering their efforts.
The general dissatisfaction of employees in FIEs regarding the average salary and the work conditions mainly leads to two different reactions from the workers, namely either strikes or job hopping – both of which create troubles for companies.
Read the rest of the article about Vietnam investment by Heloise Dessanges at Vietnam-Briefing.com. Vietnam-Briefing is contributed to by the experts at Dezan Shira & Associates who maintain Hanoi accountants and Ho Chi Minh City.
Article source: https://articlebiz.comRate article
Article comments
There are no posted comments.
Related articles
- “Mira Sorvino: From Oscar Glory to Hollywood Silence.”
- Ireland Sino Institute Launches 2025 China Internship Program
- “Beyond the Spotlight: The Rise and Fall of Dorothy Dandridge.”
- “Through the Mist of Venice: Revisiting Don’t Look Now and Its Haunting Grip on Grief.”
- The Art of Coaching: Cultivating Growth and Inspiration
- Creating a Holistic Backyard Retreat: Old World Elegance Meets Nature
- Understanding T1 and T2 Transit Documents in EU: Your Complete Guide
- Cryptonews.money: Your Ultimate Guide to Understanding Cryptocurrency
- 15 Basketball Dribbling Games and Passing Drills for Better Ball Handling
- Transdermal Progesterone Cream: Benefits for Hot Flashes and Menopause Symptoms
- Tepezcohuite: The Ancient Skin Health Secret You Need to Know
- Quiet Cars and Busy Calendars: The Overlooked Role of Chauffeurs in Post-July Corporate Travel
- 1031 Exchange
- Breaking Karmic Cycles, Creating a Shiva Altar with Deity Carvings and Sculptures from Mogul Interior
- The Art of Whimsical Carved Wall Art & Eclectic Décor
- “Hellfire and Heresy: Ken Russell’s The Devils and the Fury of Sacred Cinema.”
- Transform Your Bedroom into a Productive Haven: Ultimate Guide to Bedroom Inspirations with Desk
- “Heatwave: When Crime, Character, and Two Legends Collided in Michael Mann’s L.A.”
- Steam Vs. Scrub: The Best Chemical-Free Tools For Cleaning Tile Edges And Grout
- A Smart Solution for Clean Environments: Hygienic PVC Wall Cladding
- Choosing the Right Stainless Steel Panel Adhesive for Durable Wall Cladding Installations
- How to Choose the Right PVC Panel Adhesive for a Professional Finish
- Precision Finishing with Steel Cladding Profiles and Trims
- The Finishing Touch: PVC Cladding Trim & Profiles for a Seamless Installation
- Lightweight Strength: Why Aluminum Cladding Sheets Are a Smart Choice for Modern Projects
- Durable and Hygienic: Why Stainless Steel Wall Cladding is the Industry Standard
- Transform Your Interiors with PVC Ceiling Panels and Planks
- Enhance Hygiene and Style with BIOMAX Coloured Hygienic Wall Cladding
- Add Vibrancy and Protection with PVC Colour Wall Cladding
- Superior Protection with Antimicrobial PVC Wall Sheets