Human Resources for Vietnamese Industrial Sector: Lack Many Skills

Human resources play a key part in countries’ industrial development. However, Vietnam will lose its human resource advantages if local labour training centres do not have suitable development strategies.

 

Many experts said investing in the assembling sector will be increased in several years to come to take advantages of manual workers. However, in the near future, salary will be raised along with the national economic development. The advantage of cheap labour force in Vietnam will lose and foreign direct investors will move to other nations which have lower production costs than Vietnam.

 

Despite sharp increase in foreign direct investment (FDI) in Vietnam over the past recent years, there is nothing to ensure that the trend will continue in the long term. Asian countries like Malaysia and Thailand have carried out their industrialisation strategy for several decades. This helps to bring their workers with higher salaries, therefore, these countries can become places for making high added value products for FDI firms. On the other hands, China and India have more advantages than Vietnam in terms of domestic market scale and labour costs. Vietnam will have also competed with the runners-up such as Cambodia, Laos and Myanmar which have more advantages in labour costs than Vietnam to attract FDI. To continue implementing the industrialisation process, Vietnam needs to speed up high-qualified human resources to raise added value for products when the country is losing its cheap labour costs.

 

With a population of over 85 million, mainly young people, Vietam have great potentials in human resources. The abundant labour force is an important factor for the national industrial development. However, Vietnam is facing a more serious shortage of qualified labourers.

 

With the goal to study the quality of industrial labour force and demand, Vietnam Development Forum has cooperated with the United Nations Industrial Development Organization (UNIDO), the National Economics University (NEU) to conduct a survey on businesses in Hanoi and neighbouring areas between December 2008 and February 2009 under the support by the Japan International Cooperation Agency (JICA) and Japanese Hiroshima University. The research group received feedbacks from 76 among interview enterprises, or 47.5 per cent of the total, including 27 Japanese companies, 35 Vietnamese firms and 14 from South Korea, Taiwan and other countries. In spite of the low rate of response, this is among few surveys to assess the training quality of Vietnamese human resources.

 

The survey showed that companies do not highly appreciate skills of new graduates, particularly in the technical sector. Among the group of five skills (such as 5S (selection, arrangement, tidiness, care and willingness); kaizen (activities for continuous improvement with the participation of all people to improve their working conditions); working style and team work). 5S is the skill ranked the lowest by enterprises. It is possible that this skill is not taught at schools. Besides, the skill of team work and spirit of starting business are not highly appreciated by the companies. In terms of disciplines, companies said most of new graduates conform to labourr regulations but remain passive. Among the hard skill group, forging, casting and modeling are ranked the lowest by companies. These are basic skills in the manufacturing sector and decisive for product quality, thus, enterprises valuate them more strictly than others (such as skills in electronics measuring and equipment operations).

 

In terms of sectors, companies in automobile and motorbike areas assess labour quality lower than other engineering sectors, which shows the reality that automobile and motorbike production requires higher technologies and skills than others. Regarding nationality of companies, Japanese investors have the strictest evaluation of all.

 

As for ownership aspect of businesses, a supposition that FDI companies ask higher technologies and skills, therefore, they have higher demands than domestic firms. But, the survey indicates the opposite result. Vietnamese private enterprises have the lowest assessments for most of skills. An explanation for this is that the local private firms often do not train labourers after recruitment because they expect that workers can work immediately. Meanwhile, the majority of FDI companies provide training programmes after the recruitment, thus, they can accept new graduates’ weaknesses easier.

 

The quality of new graduates partially depends on training capacity of education centres. Hence, one of important contents of the survey companies’ assessments on the quality of material facilities and training programs as well as relation between training centres and firms.

 

The survey shows that companies overvalue material facilities, trailing quality, and lecturers’ capacity of the centres that they have visited. However, businesses also said that the cooperation between the centres and enterprises remain weak. For instance, colleges and universities do not often study companies’ demand for labourer training and quality of labourers who were trained by them.

 

According to Nguyen Thi Xuan Thuy from the Vietnam Development Forum, to enhance quality of Vietnamese industrial human resources, training centres should work with enterprises to define their training contents. The survey showed that companies said that the training centres should focus on providing hard skill for students, while companies should offer them with soft skills. However, the centres need to help students to practise at production facilities. The relation between the centres and businesses are the basic factor to ensure training programmes. But, businesses said, the school are not really dynamic in developing the relation.