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
- Top 10 Online Tools Every Student Needs in 2025
- What Are the Benefits of 24/7 Home Health Care in Mobile, AL? Trusted Services by First Watch Home Care
- How to Choose the Best Real Estate Drone Videography Service in CA
- Strategies for building a positive workplace culture in 2025
- From Dubai Airport smugglers to Gordon Ramsay's kitchen - one of TV's top directors reveals all in our exclusive Q&A
- Red Flags to Watch for When Dating Over 40
- Why Commercial Gutter Cleaning is Essential for Your Business – And Who You Should Trust in Essex
- The Rise of Software to Monitor Employee Computer Activity: Balancing Productivity, Privacy, and Ethics
- NOSEBLEEDS, NEIGHBOURS, AND NEW YORK: HEIDI'S ARTISTIC RESURRECTION
- Top-Tier Real Estate Videography in NV: Boost Your Sales with Stunning Visuals
- Find In-Home Senior Care Services Near You in Alabama: Expert Respite, Personal, and Dementia Care Solutions
- Elevate Your Entryway with a Statement Wall: Carved Wood Panels
- What Are the Comprehensive Senior Home Care Services in Prichard, AL for Trusted Respite and Dementia Care?
- Electronic Document Management System: Efficiency and Challenges in the Digital Age
- Best Air Conditioning Repair Service Queen Creek Florence Arizona
- How to Choose an Airport Transfer Service: A Guide for Stress-Free Travel
- Wirral Private Airport Transfers: Comfort, Convenience, and Class
- North Wirral Airport Transfers by Ventus: Trusted Travel from Coast to Terminal
- The Importance of Reliable Airport Transfer Services
- Find the Perfect Fireplace for Your Home
- The Pros, Cons, and Ethical Dilemmas of Employee Computer Activity Monitoring Software
- Over 40 and Ready to Mingle? Why Now Is the Best Time to Start Dating Again
- Whu buy an apartment in Manilva
- Best Electric Humidor: Top Picks for Effortless Cigar Storage in 2025
- They Tried Magic Mushrooms for Mental Health
- Sacred Balance: 5 Elements Chakra Healing with Mala Beads & Yantras
- Rooted in Heritage: The Rich Ranch Aesthetic with Antique Doors and Rustic Soul
- Carved Floral Barn Doors: A Shabby Chic Statement for Your Pantry & Laundry Room
- Confusion and Anxiety: Lincoln and the Days Before the Civil War
- How Website Maintenance & Security Protects Your Online Presence