Vietnam Labor Market Update in Quarter 3/2021

Press Release, HR Insight

Adecco Vietnam releases the Q3/2021 labor market update, sharing our insights on recruitment demand and growing trends in this quarter, forecasts for the last quarter of the year, and suggestions for businesses to return to the office.

Recruitment demand in Q3/2021

In the last months, COVID-19 spreading continued throughout the country, creating severe tolls on production, business activities, and the labor market. In the southern region, most especially, the prolonged social distancing according to Directive No. 16 and other pandemic prevention directives have greatly disrupted commercial and service activities.

However, according to Ms. Thu Ha Nguyen, Director, Adecco Hanoi Office, hiring demand for high-quality personnel in this quarter still witnessed a positive signal in some areas.

Specifically, in comparison to Q3/2020, data from Adecco Vietnam show a 10% increase in hiring requests, especially in the retail sector. Demand in this sector is 30% higher than Q3 last year, focus on senior tech-enabler and E-commerce operation roles. Despite the limitation of the “3 on-site” model, energy and manufacturing companies are on top in hiring demand for top-tier Project Management, Quality Assurance, and Supply Chain Operation professionals. The technology sector, with e-commerce platform, outsourcing, and digital activities, again takes the lead in terms of recruitment volume.

That means for this time of the year, businesses take things normal and react positively with Business Continuity Planning (BCP). In addition, Western markets have been back to normal, which, Vietnam as a manufacturing and service hub, would benefit from”, said Mr. Chuong Nguyen, Associate Director, Recruitment Business, Adecco HCMC.

"More and more multinational corporations are recruiting new positions in Vietnam, instead of depending on regional or global teams as before. For example, internal audit positions. If in the past, these companies often utilized regional audit teams, lately, many of them have recruited new local-based headcounts for the Vietnam team", Ms. Hoa Dang, Associate Director, Recruitment Business, Adecco HCMC, emphasized a prominent trend in recent months.

Ms. Hoa Dang explained the reasons are quite diverse, "Some tasks need to be done on-site, while the travel restrictions between countries make it tough to take overseas business trips. It is more convenient for businesses to open new vacancies. Also, some enterprises decide to expand their operations in the Vietnamese market, so recruiting new staff with a reasonable cost is understandable."

However, as strict movement policies are in place, all recruitment and onboarding activities are now remotely done. Ms. Hoa Dang shared, “Although onboarding is tough now as employers are unable to deliver work types of equipment or build team chemistry, many companies still recruit then postpone the onboarding until the pandemic is under control”. Yet a small percentage of specialized job functions which require on-site performance and assessment such as Research and Development or Product Engineering and Development must be put on hold until an in-person interview and evaluation can be made.

The labor market in the last months of 2021

Predicting the labor situation shortly, Ms. Thu Ha Nguyen observed that there will be several recruitment scenarios depending on the ability to control the pandemic. However, regardless of the situation, some sectors have been, are, and will continue to thrive even stronger. “The fact that employees have to work remotely via the Internet makes companies increase personnel for the network and database administration department. Plus, cloud storage has been driving the digitization process at businesses faster than ever. This leads to dramatic growth in the demand for IT engineers soon”, said Ms. Thu Ha Nguyen.

She also believed that the COVID-19 pandemic has made medical achievements more noticeable. Talents in biomedical engineering, chemistry, biology, and data analysis will continue to be sought after to research solutions to prevent, treat and control diseases.

Applied science, automation technology, and artificial intelligence (AI) in manufacturing sectors will also capture great attention and investment to ensure physical distancing in the production environment or at the point of sale”, Ms. Thu Ha Nguyen continued.

73.7% of enterprises in the processing and manufacturing industries assessed that the production situation in the Q4/2021 would be stable and better, according to data from General Statistics Office. Yet they might struggle with high volume hiring. During the prolonged COVID-19 quarantine, countless employees and workers have left the industrial zones to return to their hometowns and have not yet or will not return. This happens in various industries that have intensive labor such as garment, textile, footwear, and furniture.

Mr. Chuong Nguyen also highlighted, “Retail and consumer sectors will need more headcounts for the year-end sales, while service companies would face a growing hiring need as they may have lost part of their workforce after months of closing”.

On the other hand, non-essential consumer goods, food services, tourism, serviced offices, and sectors that require in-person contact (art performance, community events, on-site sales, cosmetology, ...), will continue to face many challenges.

In the coming months, with the massive coverage of vaccination in big cities, offices will welcome the employees back to work with caution. However, Mr. Chuong Nguyen noted that it may not be the same old office. Instead of having the whole team work on-site, businesses will gradually bring back 30% or 50% of their workforce to the office for the first few months. Thus, recruitment will be back to normal with a “hybrid” setup, which involves both face-to-face and virtual meetings.

The pandemic has forced many businesses to switch to a remote working model to stay afloat. For some businesses, this is not just a temporary solution. For example, in the technology sector, Adecco recorded a 100% rise in demand for remote positions, as this is possibly the most flexible sector for the remote workplace model. Recent surveys across sectors from Adecco Vietnam disclosed that the hybrid work model, the combination of on-site and remote work, is the most awaited by employees. "Employees still want to work in the office for engagement purposes, but they also need more flexibility in their work arrangements. The hybrid working model can ensure the best of both worlds", said Ms. Hoa Dang.

Ms. Thu Ha Nguyen also pointed out the future of remote work, “Remote working will be inevitable in the near future. Leaders should prepare a new mindset in managing remote employees when this new model is increasingly popular in the region and around the world.”

Getting ready to return to work and restart recruiting

Social distancing measures are being gradually eased for economic recovery, and the return to office is near. As the future of work is changing, Ms. Thu Ha Nguyen advised, “With the discernible trend of digitalization and the undeniable expectation from employees about work flexibility, businesses should be ready to enhance team capacity in the new workplace. Digital skills, tech-savviness, and digital communication will always be the essential skills for a winning workforce”.

Again, to adapt to the constant changes and tackle the unknown, leaders should revise their management mindset. Mr. Chuong Nguyen shared, “The office-centric work design which focuses on presence-based management and serendipitous interactions may no longer be the optimal choice. Instead, the human-centric workplace where empathy-based management, flexibility, and driven collaboration come first will be the key to sustain the workforce in a longer-term”.

Ms. Hoa Dang noted that after months working remotely, leaders should consider how to reconnect employees when returning to the office. She remarked, "Leaders play a key role in reconnecting people to the purpose and values of the business, making them feel belonging, and motivating them to stay engaged and thrive through uncertainty. In the new hybrid working model, businesses should equip every leader with coaching, upskilling, technology, and resources to help them better listen to and manage their teams, thereby helping to boost work motivation as well as building strong team morale and culture”.

To gain an advantage in the recruitment process, businesses should showcase their safe and healthy workplace with a flexible work policy, healthcare support, and safety protocol in place. Due to the emergence of COVID-19, salary and compensation packages are likely not enough to attract talents and secure placements. Also, employers should be flexible during the hiring process, such as utilizing video interviews and online assessments when possible, instead of insisting on face-to-face meetings.

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