The end of Q3/2017 signals the start of a new planning season for companies in Vietnam. As business leaders ponder their moves for 2018, the question about building and maintaining a strong Vietnam workforce to deliver results in a growing market is one of their main concerns.
This report presents an outlook on Vietnam’s economic prospects and workforce issues, providing potential employers with the information to plan their workforce in the coming year.
Vietnam Economic Outlook
Following the 6.21 expansion rate of 2016, Vietnam’s economy is forecasted to grow at an average of 6.3% in the next 3 years, according to a report by World Bank in June 2017. The Washington-based lender cited accelerating service sector, robust industrial production and recovered agriculture as the key drivers that put Vietnam among countries with the fastest economic expansion, “continuing to gain market share in exports and even giving China a run for competitiveness.”
Youth Unemployment
With the country’s literacy rate at 97% and the government’s plan to increase the number of new students enrolling in college and university to 560,000 by 2020, Vietnam should be welcoming a wave of fresh graduates ready to take advantage of the country’s forecasted economic growth. However, in reality, a higher degree does not guarantee job prospects. The unemployment rate of youths with university training stands at an alarming rate of 17%, compared to a slightly over 6% of those only received short-term training. University and college curriculum is criticized for focusing too heavily on impractical theories while failing to provide students with pragmatic skills and knowledge. However, fresh graduates are not the only ones affected by the lack of skills.
The Skills Issues
In the first eight months of 2017, the number of enterprises registered for new establishment rose 16.3% and 44.8% of the registered capital. The average registered capital per newly-established enterprise went up by 24.5%. Recruitment still remains the top priority for businesses in Vietnam, as polled among HR leaders across different industries.