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
- Buying a Home When the Interest Rates Drop
- From Sheep to Chic: The Style Power of New Zealand Wool Carpet
- The Healing Blueprint: How to Activate Your Body’s Innate Power to Recover Naturally.
- Turmeric Uncovered: Nature’s Golden Remedy for Modern Wellness
- Turmeric’s Timeless Secret: A Golden Path to Better Health.
- Healing in Harmony: Unlocking the Secrets to Your Body’s Self-Renewal.
- The Bohemian Skirt: A Timeless Wardrobe Essential
- Ganesh Chaturthi: A Modern Take on Tradition Through Carved Wall Panels and Spiritual Wellness
- Revitalize from Within: Simple Strategies to Boost Your Body’s Natural Healing.
- Golden Power: Unlocking the Healing Benefits of Turmeric.
- From Chandeliers to LEDs: Fehmi Lights’ Expert Answers to Brampton’s Most Asked Lighting Questions
- West Texas Desert Retreat: Eclectic Outdoor Living Spaces & Vintage Tables
- Awaken Your Inner Power: How to Elevate Your Body’s Natural Healing Abilities.
- Joint Pain Demystified: Everything You Need to Know About Causes, Remedies, and Long-Term Care.
- Mountain Cabins Bring Character
- Living Without Limits: A Complete Guide to Joint Pain Causes, Treatments, and Prevention.
- Bladder Health and Urinary Tract Function: Comprehensive Strategies for Lifelong Wellness.
- Diabetes and Limited Joint Mobility: Understanding the Connection
- Joint Pain Unlocked: Causes, Relief, and Prevention for Lifelong Mobility.
- Deposit & Withdraw With Paysafecard at Non GamStop Casinos
- Which Book of Ra is the best?
- How Baseball Builds Lifelong Discipline and Focus
- Your Local Lighting Experts: Fehmi Lights Serving the Greater Toronto Area
- Moving Freely Again: Understanding and Managing Joint Pain Naturally.
- Bladder Health Made Simple: Natural Ways to Support Urinary Tract Function.
- Dealing with Metatarsalgia in the Foot
- Benefits of Purchasing a New Construction Home In Spring Hill or Columbia, Tennessee
- Creating a Calm Home Workspace with Minimal Decor
- Bladder Health and Urinary Tract Function: A Complete Guide to Care and Prevention.
- Smart Weight Management: Proven Strategies for Sustainable Health and Lasting Results.