Illustrative image (Source: VNA)
Base salaries at foreign companies and Vietnamese companies show a marked difference, a survey conducted by human resources firm Mercer and its partner Talentnet Corporation has found.
The gap was 25 percent at the staff level, widening to 40 percent at the professional level, and to 53-62 percent at the management level and executive levels, according to Hoa Nguyen, Talentnet's Mercer Surveys and Human Resource Consulting Director.
Hoa, who spoke at a seminar held on October 7 in HCM City, said that with local companies often paying much larger bonuses, the gap in total salaries had narrowed slightly.
To compete with multinationals in attracting talent, Vietnamese companies are now willing to pay outside their salary range and use long-term incentives such as stock offers, she said.
With low inflation this year, companies have also increased salaries at a lower rate than last year, noting that multinational companies gave employees an average of 9.4 percent salary raise and local companies 9.7 percent.
Company performance, market competitiveness and inflation were the most important factors affecting salary raises at multinational and local companies, she said.
Salary increases are expected to be higher next year as business performance is forecast to improve.
The industries that saw the highest salary increases were chemicals, life sciences and manufacturing, at 10.1 percent -10.3 percent. These sectors were less affected by negative economic trends, Hoa said.
The oil and mining as well as hospitality and financial (non-banking) sectors saw the lowest salary increases of 6.2 percent, 6.7 percent and 8.9 percent, respectively, due to difficult business conditions.
As for bonuses, banking, oil and mining, and non-banking services were at the top (22.1 percent, 17.7 percent and 17.2 percent, respectively), while transportation and logistics, retail and hospitality had the lowest bonuses (10.5 percent, 9.2 percent and 8.3 percent, respectively).
The employee turnover rate last year rose 0.1-0.5 percent, with multinationals having lower rates than local companies.
The highest turnover was in retail, hospitality and life sciences due to a shortage of qualified staff. The jobs of sales managers, senior sales professionals and marketing managers remained the most difficult to recruit.
The establishment of the ASEAN Economic Community by the end of this year, the upcoming Tran-Pacific Partnership and the Vietnam-EU free trade agreement are all expected to help domestic companies increase exports, which in turn creates a need for qualified staff.
Many foreign companies plan to set up their production in Vietnam to take advantages of these free trade agreements. Hoa said the new FTAs would lead to a more competitive labour market in many industries, especially in electronic manufacturing, pharmaceuticals and retail.
A total of 520 multinational and local companies with 211,816 employees in 15 industries took part in the survey.
More domestic companies have been participating in the salary survey and using its findings to compare their salaries with the market rate, according to Hoa.-VNA
