Vietnam businesses paying better to keep key employees

Businesses in Vietnam are paying much more attractive salaries in a bid to attract qualified employees and keep key staff amid fierce competition for the business brain.
The major weapon companies in Vietnam use to prevent losing key employees and recruit new people is high salaries, said headhunting companies.

Currently, a foreign-invested company in the country is willing to pay about VND20.2 million, or nearly US$1,300, a month for an executive director, according to research by international investment bank Dragon Capital.

The figure is about VND9 million and VND7.4 million a month higher than what a private firm and a state-owned enterprise could pay respectively, the research said.

Meanwhile, a large number of domestic companies could pay $1,000-1,500 per month or higher for manager posts, said an employee search firm.

“The contribution of employees is better appreciated with better salaries, which is a positive sign in the job market,” said Dang Van Thanh, executive board chairman of the country’s leading commercial joint-stock bank Sacombank.

“High salaries and bonuses for worthy employees are also an efficient investment which is not costly,” he said.

He said the salaries and bonuses Sacombank pays for its key people are 10 to 15 times higher than what ordinary employees receive.

These salaries stand in stark comparison to the national per capita income of Vietnamese citizens, which is somewhere around $ 30/mos.

Additional measures

In addition to high salaries, many businesses said they also use training programs as a way to prevent losing their key people.

Nguyen Huu Le, chairman of TMA Solution, a leading software outsourcing firm, where 500 engineers are working, said his company spends about VND10 million per year per employee for training costs.

He said the firm’s spending for training and salaries makes up half of its total operation costs.

Flexible investment policies are very important for a company to attract qualified employees and keep key people, he said.

Dropping behind

In the fierce competition for effective staff, state-owned enterprises are falling behind private or foreign-invested firms as they have to follow regimented regulations over salaries and bonuses.

A large number of employees in state-owned companies are moving to private and foreign firms as they want to be better paid.

Several state-owned companies spend a lot to train their staff, but when the professional standards of these employees get better, being able to handle demanding tasks, their salaries remain the same, said Dragon Capital research.

Therefore, private or foreign companies often succeed in attracting employees from these state-owned firms when they offer salaries that are three to ten times higher, including bonuses and the possibility of career advancement and raises, the research said.

A deputy director of a state-owned bank in Ho Chi Minh City said recently, some of his key people had moved to a joint-stock bank because they were better paid there.

He said the salary of even a very good employee at state-run companies could only be raised with seniority and posts regardless of his contribution to the company.

Also, state-owned enterprises often have very complicated regulations over salaries and posts, hindering their ability to keep employees, he said.

Reported by Thanh Xuan & Mai Phuong – Translated by Hieu Trung
Story from Thanh Nien News
Published: 29 April, 2005, 11:50:43 (GMT+7)
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