Low pay leads to labour shortage

Published: 03/07/2011 05:00

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VietNamNet BridgeVietnamese businesses, especially those based in industrial parks around the country, are facing a serious shortage of manpower since workers are quitting and unhappy due to low salaries.

Industrial parks in the
country are facing a labour shortage. It is expected that in five years the
garment and aquaculture sectors alone would need 6 million workers. (Photo:
VNS)

The shortage is a normal phenomenon post-Tet (the Lunar New Year) every year but this year it is happening in the middle of the year.

Figures from the Ministry of Planning and Investment show that the average income of a worker in industrial parks (IPs) and processing zones (PZs) is only around VND2 million a month, barely enough to cover even basic living expenses.

More than 30 per cent of the workers felt the salary was not commensurate to the work they did.

In HCM City, the southern hub, low wages are the main reason for a serious worker shortage in IPs and PZs, deputy head of the HCM City Industrial Park and Processing Zone Management Board, Nguyen Tan Dinh, told a seminar earlier last month.

In May the demand for workers in the city increased by 37 per cent month on month, the Human Resource Forecast and Labour Market Information Centre reported.

But the shortage meant companies were forced to lower the bar for recruitment, resulting in a fall in workforce quality.

More than 83 per cent of workers in the city’s IPs and PZs only have basic professional skills, Tran Van Thien of the University of Economics HCM City’s Human Resource Development Institute estimated.

In the next five years city businesses would need 100,000 workers, 38 per cent of them highly skilled, he said.

He expected the situation to become graver in future when the IPs and PZs would need fewer manual workers and more skilled workers.

However, already it is a challenge for them to find skilled workers. The Tan Thuan PZ, for instance, only managed to recruit 60 per cent of the 200 skilled mechanics it needed this year.

US giant Intel fared even worse, managing to hire just 400 of the 3,000 skilled workers it needed when in opened last April.

Many other industries are also facing a massive worker exodus. Thoi Bao Kinh Te Viet Nam (Viet Nam Economic Times) reported the railways as saying that around 2,000 people had quit since 2008, mostly because wages were too low. The garment, footwear, plastic, packaging, and food processing industries are always in need of workers.

It is expected that in five years the garment and aquaculture sectors alone would need six million workers.

The massive inflation this year, expected to top 15 per cent, has already seen the prices of essential goods at least doubling.

To encourage workers to stay and attract new staff, many elsewhere companies are cutting costs to increase salaries by VND100,000-200,000 a month.

Trade unions have pitched in to help workers in IPs and PZs by persuading companies to raise wages and allowances and landlords not to increase rents this year and to collect Government-mandated power and water charges.

They have also coaxed kindergartens not to increase fees for workers’ children.

But the shortage of workers, however, continues to plague IPs and PZs as workers change jobs for just a few hundred thousand dong more.

In HCM City, 15 per cent of all workers changed their jobs for a salary difference of just VND100,000, a survey by consulting company IBG found.

Two thirds of people aged between 25 and 40 were looking for jobs this year, it said.

More than a third wanted to change due to low income.

Another 23 per cent said they were not satisfied with their training while 19 per cent were not happy with their working environment though not all were planning to look for new jobs.

VietNamNet/Viet Nam News

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