HCMC – Following the recent wave of rising foreign investment in Vietnam, experts have forecast that the human resource structure will see a fundamental change once the foreign direct investment (FDI) flows to the manufacturing and processing industries that require medium to high skilled workers, instead of a low or unskilled workforce.

The year 2020 marked an important milestone in the economic and social context of Vietnam as Covid-19 affected about 93% of the world’s population, said experts at a webinar jointly organized by ManpowerGroup Vietnam and the Institute of Labor and Social Affairs on July 22.

Vietnam has been severely impacted by the pandemic, although the manufacturing and processing industry continues to play a key role in leading the growth of the economy.

In particular, industrial manufacturing and processing in the fourth quarter of 2020 continued to maintain a higher growth momentum than the previous quarters, contributing significantly to the prospects of economic recovery.

Being an Asian country with strong international integration and a young abundant workforce, Vietnam has continued attracting strong FDI, creating more business and job opportunities.

Addressing the webinar, Simon Matthews, regional manager of ManpowerGroup Vietnam, Thailand and Middle East, said, “Vietnam has steadily turned into a manufacturing hotspot in Asia, due to its relatively large and cost-competitive workforce, attractive tax regime, stable political environment, geographical advantages and open trade policies.”

He added, “Foreign firms have planned to expand manufacturing operations in Vietnam in an effort to diversify supply chains. This will bring about great opportunities for Vietnam to take manufacturing to the next level, creating thousands of meaningful jobs for the local workforce.”

According to ManpowerGroup Vietnam’s survey “The situation and demand of working skills at FDI manufacturing and processing businesses in Vietnam in the 2021-2023 period”, most of the businesses are using cutting-edge technologies from a high to very high level (32%) or medium level (63%). Only 5% are at the low and very low level.

In this context, the manufacturing and processing industry requires more medium to high skilled workers.

Meanwhile, nearly half of the workers (46%) in the FDI businesses are doing low-skilled or simple jobs and this ratio is high in the motorbike/automobile assembling, textile and electronics industries. Around one third of the laborers (office workers/services and sales, assembling technicians and equipment operators) have medium to lower medium skills.

“The Covid-19 pandemic will continue to become more complicated in 2021 and the world is in the ‘new normal’ phase. Businesses will have to optimize their operations and production to become both more effective and safer,” said Bui Ton Hien, director of the Institute of Labor and Social Affairs.

“FDI enterprises in the manufacturing and processing industry will lean more toward automation, and thus will strongly affect the demand for labor skills and skilled jobs in the market in the next two to three years,” he added.

Work ethics, discipline at work and professional/technical skills are rated as very important by the manufacturing FDI companies that participated in the survey. In addition, foreign language ability plays a critical role at FDI businesses; however, it is rated the lowest in the group of skills surveyed.

The top skills that businesses find the most difficult to find are professional/technical skills; foreign language skills; analytical, logical and critical thinking; creativity, initiating skills; leadership/management, decision making skills; and problem solving/conflict management skills.

Matthews emphasized, “Due to the technological disruption, employers would need to develop an effective and holistic workforce strategy. As the world of work is changing fast and it becomes more and more challenging to find workers with suitable skills, organizations must build, bridge and borrow the skill sets they need. That will be critical for their success in the short, medium and long term, especially in the digital age.”