Foreign firms set high pay standards

Foreign firms set high pay standards

The difference in base salaries paid by multinational and Vietnamese companies is widening, a survey by human resources providers Mercer and Talentnet has found.

Hoa Nguyen, director of Mercer Remuneration Surveys and Human Resource Consulting Services, speaking at the Post Total Remuneration Survey seminar in HCM City on Friday, said it increased from 26 per cent last year to 29 per cent now.

While the salaries for staff and professionals were comparable, the difference in the salaries of managers and executives was quite high, she said.

But she said with local companies often paying much larger bonuses, the gap narrows a bit.

To compete with multinationals in attracting talent, Vietnamese companies are now willing to pay outside their salary range, she said.

The survey pointed out that like last year, salary increases this year too have been higher than the inflation forecast — of 7.5 per cent — noting that MNCs gave employees an average 11.1 per cent salary raise and local companies, 11.3 per cent.

The raise is forecast at 11.1 per cent next year at both MNCs and domestic firms.

Godelieve Kroonenberg, Mercer's Market Business Leader, ASEAN Information Solutions, said Viet Nam has the highest salary increase rates in Asia this year, followed by India and Indonesia at 10.5 per cent and 9.3-10 per cent.

The trend would continue next year, she said.

With the starting salary in Viet Nam being one of the lowest in the region, it has more room to increase, she said.

Hoa said the pharmaceuticals, manufacturing, and consumer-goods industries gave the highest raise of 12 per cent.

Those in banking, financial services, and real estate were at the other end of the spectrum due to difficult business conditions, she said.

The survey said oil and mining and banking continued to top in terms of salaries, while manufacturing remained the lowest-paying industry.

Employee turnover down

The employee turnover rate reduced by 2-3 per cent from last year because of the current economic condition, which made employers and employees wary of new recruitment and moving, Hoa said.

The technology sector, which faces a talent shortage, had the highest staff turnover rate, and oil and mining and chemicals, the lowest.

The survey found that despite the difficult conditions for business, 60 per cent of companies plan to increase their payroll, 8 per cent less than last year. Three per cent plan to cut their headcount, the same as last year.

Survey respondents said the most challenging to recruit and retain were sales managers, marketing managers, and sales executives.

Kroonenberg told Viet Nam News that local companies may not have big budgets like MNCs, so to attract and retain talents they "have to find your own strengths, that means what makes you different as a local company, maybe you have better facilities at the workplace or maybe you offer bigger benefits or maybe just a working culture that is more healthy."

Promotion and opportunities to grow are also very important, she said.

The survey showed that improvements in benefits were almost the same as last year, and mainly focused on insurance, medical treatment, cars, and loans, with local companies providing more car and loan benefits than MNCs.

A total of 418 companies with 142,587 employees in 13 industries took part in the survey.

Last year's survey polled 371 companies.

vietnamnews