Vietnamese companies to raise salaries this year more than foreign firms
Vietnamese companies to raise salaries this year more than foreign firms
This year, local companies experienced a salary increase of 7.9 per cent, which is 0.2 percentage points higher than the previous year. On the other hand, multinational businesses saw a salary increase of 7.1 per cent, which is nearly the same as last year.
The chart shows salary increase trend of local and multinational companies. — Photo source Talentnet |
It is predicted that with the current situation of the economy, the budgets for pay raises in local companies will decrease to 6.9 per cent in 2024, while foreign businesses will maintain a stable salary increase budget, according to the Talent-Mercer Total Remuneration Survey Report 2023.
The top three sectors with the highest salary increases in 2023 are high-tech (8.3 per cent), trading (7.7 per cent) and renewable energy (7.7 per cent).
Non-banking finance, real estate, oil and mining will likely have the lowest pay growth, with rises of 5.1 per cent, 5.3 per cent and 5.4 per cent, respectively.
HCM City and the southern region have the best annual base salary for employees in Việt Nam, partly due to investment from foreign businesses.
Accordingly, the annual base salary in Hà Nội is 12 per cent lower than HCM City, and 10 per cent lower than other southern provinces, while Đà Nẵng’s annual base salary is 26 per cent lower than HCM City, and if total income including incentives is calculated, this difference narrows to 18 per cent.
In terms of the pay difference between local and foreign firms, the report showed that the average salary overall at Vietnamese companies is 23 per cent lower than at multinational businesses. The gap widens at senior positions, with the highest being at the management level (30 per cent).
The report also pointed out that the voluntary resignation rate in the first half of 2023 dropped by 1.5 per cent to 10.4 per cent in Vietnamese companies and 6.5 per cent in foreign companies.
This indicates that when the economy goes down, workers tend to stick with their current jobs, leading to a decrease in the rate of voluntary resignation, said Nguyễn Thị Quỳnh Phương, director of HR Consulting Business, Talentnet Corporation.
The three industries with the highest resignation rates among foreign companies are retail (17.3 per cent), non-banking finance (10.9 per cent) and manufacturing (9.5 per cent). The three industries with the lowest staff turnover rates remain unchanged compared to 2022, namely oil and mining (1.8 per cent), chemicals (3.2 per cent) and sourcing (3.4 per cent).
The survey also found that almost all employees want to be promoted after an average of three years. As for the Gen Z employees (born between 1981 and 1996), the number is shortened to two years. However, the average seniority of this generation is 1.7 years.
Therefore, businesses should adjust human resource policies or reduce the time needed for promotion to attract Gen Z talents to stay longer, Phương said.
A total of over 638 multinationals and local companies across 17 industries with more than 544,000 employees in Việt Nam took part in the survey, an increase of 30 businesses compared to 2022.
