Although having a relatively low unemployment rate compared to other countries in Asia, Vietnam is facing a tough challenge with its younger workforce. By the end of 2014, 6.3% youths between the ages of 15-24 are out of jobs; even more alarming when 20.75% fresh graduates (aged 20-24) are unable to find jobs. (Source: Ministry of Labor, Invalids and Social Affairs).
However, 62% of companies in Vietnam stated difficulties in filling jobs in 2014. (Source: Staffing Industry Analysis). This talent mismatch will continue to damage the economy, leading to poor prospects for millions of families, missed innovation and a shortfall of growth. Urgent actions by both the government and business are needed to address these issues.
Vietnam workforce competitiveness
In the latest release of the Global Talent Competitiveness Index 2014, produced by Adecco Group, INSEAD and Singapore’s Human Capital Leadership Institute, Vietnam is ranked 75 out of 93 countries. Measuring each country’s performance in six areas, or ‘pillars’, the GTCI focus on how countries produce and acquire talent (input) and the quality and type of skills that are available for the labour market as a result (output). Although having a high score in innovation and entrepreneurship, Vietnam performance in developing its own talent via formal education and lifelong learning is quite low. This would create a wider skills gap for the country in the future.
Issues with formal training are also reflected in productivity of the Vietnam workforce. A report released by the International Labour Organization in 2014 put Vietnam’s productivity at 1/15 of Singapore and 1/6 of Malaysia. Proper training is one of the main reasons for Vietnam’s low productivity as less than 20% of the workforce is properly trained, thus unable to meet the requirements of the labour market. In another survey of 200 businesses in Central Vietnam, the respondents revealed that most graduates from vocational schools did not meet their requirements.
The role of education in developing the Vietnam workforce
As growing talent is critical to being talent competitive, Vietnam needs more investment in formal education. Despite its dramatic growth for enrolment at tertiary level over the past decade (from 10% in 2000, to 16% in 2005 and 25% in 2013 – Source: UNESCO Institute of Statistics), the number of teachers remains essentially unchanged. This is despite recent increases in budgetary allocations, liberalized private sector involvement, and the encouragement of foreign participation in education and training services. Foreign provision will not, however, solve the problem of under-capacity or poor teaching standards.
A report by Harvard Ash Institute at Kennedy School also pointed out that “Vietnamese universities are not producing the educated workforce that Vietnam’s economy and society demand. Surveys conducted by government-linked associations have found that as many as 50 percents of Vietnamese university graduates are unable to find jobs in their area of specialization, evidence that the disconnect between the classroom and the needs of the market is large.”
As such, in developing its own talent, Vietnam also needs to broaden beyond formal education to boost life-long learning and growth opportunities linked to professional experience. This is essential to ensure that employers have access to the skills they need. Previous research by Adecco found that countries with established systems of work-based vocational training, such as Switzerland, Germany and Austria, have been most successful in tackling youth unemployment, a key indicator of the talent mismatch. The current rate of youth unemployment in Germany stands at 7.6%, compared to the European average of 23%.
“Temporary work and internships can help young people to take their first step onto the career ladder or into a permanent position”, commented Nicola Connolly, Country Manager of Adecco Vietnam and Chairwoman of Vietnam Employment Agencies Federation, “In Vietnam and many other countries, Adecco is helping new graduates and job seekers with the skills they needed to step in to the world of work through our temporary staffing projects and Way to Work, a global initiative involving Adecco employees in more than 50 countries. Young people were given work placements for one month in large companies across the world, giving them the chance to learn workplace skills in a wide range of roles across various sectors. 52% of candidates received job offers at the end of the period. It has become a global platform for Adecco and will continue to help young people unlock their potential and ensure they can access work experience opportunities and learn important workplace skills essential to get on the jobs ladder.”
Read more: GTCI report 2020 with the race of AI
GTCI report 2019: Nurturing entrepreneurship talents
1 ILO/ADB Study - "ASEAN Community 2015: Managing integration for better jobs and shared prosperity"
2 Harvard Ash Institute – “Vietnamese Higher Education: Crisis and Response”