Job Well Done
Feb 4, 2016
Higher bonuses are a partial reflection of healthier business activities over the last year. Hoang Thu reports.
A joyful atmosphere was felt throughout one PR agency in Hanoi as 2015 entered its final days. Ms. Ngo Lan and her colleagues has received their end-of-year bonuses, which were double what they receive a year earlier. “Compared with other companies our bonus of VND2 million (89) is not so much,” she saidm but she and her colleagues were still happy that the Boards of Directors was willing to share some of the company’s profits after a strong business performance during the year. “We are now eagerly waiting for our Tet bonuses,” Ms. Lan said with a smile. “We hope it will also be double last year’s.”
Average salaries in 2015 and end-of-year and Tet bonuses were and will be higher than in previous years, according to a report based on a survey conducted on 13, 178 enterprises with 2.4 million employees by the Ministry of Labor, Invalids and Social Affairs (MoLISA). “Bonuses for Tet are quite exciting,” Ms. Thanh Nguyen, CEO of Anphabe.com, Vietnam largest community for senior working professionals, told VET. “Healthy bonuses can be seen as a good sign of a better year to come for Vietnamese workers.”
Some 87 per cent of enterprises expect to give employees a Tet bonus this year, of an average of a month’s salary (about VND5.5 million, or $245), 15.7 per cent higher than last year, according to the MoLISA report. The highest is VND624 million ($27,800) per person at a foreign enterprise in Hai Duong while the lowest is VND40,000 ($1,7) per person in a foreign enterprise in southern Binh Phuoc province.
There are also some differences between local companies and foreign-invested enterprises (FIEs) in their method of paying bonuses to employers, according to Ms. Thanh. At FIEs the Tet bonus is usually seenas a symbolic amount of money for staff to celebrate the lunar new year. Employees of FIEs don’t put too much expectation on a Tet bonus, instead paying more concern to their annual bonus, which is paid around April or at the end of fiscal year based on their capacity and effort during the previous 12 months.
Local companies, meanwhile, normally pay a Tet bonus and annual bonus at the same time, at the end of December or in January. “Employees will be happy to have money to spend on Tet shopping,” Ms. Thanh said.
Tet is very important to Vietnamese people. It is a time for those who have worked hard throughout the year to have a chance to spend time with their families, according to Mr. Jon Whitehead, Country Manager at professional recruitment firm Robert Walters Vietnam. “When businesses come to Vietnam they know and respect Vietnamese culture,” he said of foreign enterprises. “If people do a good job they deserve to receive a bonus.”
Others, meanwhile, probably know a Tet bonus won’t be forthcoming. According to the MoLISA report, 14 enterprises in eight provinces owe salaries totaling VND16.5 billion ($736,000) to 2,300 employees and more than 1,700 enterprises (about 13 per cent of those in the survey) have no plans to pay a Tet bonus. According to figures from the Ho Chi Minh City Department of Labor, 215 businesses in the city expect to have difficulties in paying Tet bonuses to employees due to poor business performance.
Seventy-two per cent of foreign enterprises paid bonuses for the January 1 new year, averaging about VND1.18 million ($52), or 1.6 per cent higher than a year earlier. The highest was VND2.028 trillion ($90,400) per person at a foreign enterprise in Ho Chi Minh City, while the lowest was VND24,000 ($1.07) at a foreign enterprise in northern Thai Binh province.
Higher bonuses also reflect higher salaries being earned over the last year. The average monthly income in 2015 was around VND5.5 million ($245), up 8 per cent year-on-year, according to MoLISA. State employees earned the most, at VND7 million ($310), followed by employees at foreign enterprises with VND5.5 million ($245) and private sector employees with VND4.9 million ($219), up 8, 9, and 6 per cent, respectively, against 2014. “The higher wages reflect the higher profits earned by enterprises in 2015,” said Ms. Tong Thi Minh, Head of the Labor Department at the Ministry.
Higher wages also matched higher GDP per capita in 2015 of VND45.7 million ($2,110), up $57 against 2014, Ms. Minh added. Labor productivity was estimated at VND79.3 million ($3,660) per worker, up 6.4 per cent compared to 2014.
In terms of sectors, salaries in trade and services are now the highest, at VND6.3 million ($280) per person per month, up 8.8 per cent against 2014. Following was industry and construction, at VND5.3 million ($235), up 11 per cent, while the lowest was in agriculture, forestry, and fisheries, at VND4.5 million ($200), up 3 per cent.
Industries such as rubber and oil and gas saw profits decline due to falling global prices even though labor productivity increased. Enterprises in these industries around the world have cut down staff numbers and salaries, according to Ms. Minh, while in Vietnam they have tried to keep their workforce stable by cutting other costs and reducing salaries (by up to 10 per cent). For example, in the rubber industry, where approximately 120,000 people are employed, productivity increased 6 per cent last year compared to 2014 but due to falling rubber prices salaries had to be cut by 4-5 per cent.
Regarding the salaries of mid-level and senior managers, banking and finance ranked in first place in Hanoi among the Top 10 industries with the highest salaries in 2015, according to a report from Navigos Search released in January. Salaries of mid-level and senior managers in the industry ranged from VND100 million ($4,460) to 200 million ($8,925) per month. Manufacturing and real estate followed.
In Ho Chi Minh, meanwhile, healthcare was first among the Top 10 industries paying the highest salaries to mid-level and senior managers, followed by fast-moving consumer goods (FMCG), retail, and banking and finance. Salaries in these Top 10 industries ranged from VND70 million ($3,125) to 225 million ($10,035) per month. Based on the Navigos Search data, the highest monthly salary for mid-level and senior managers in 2015 was $10,035, up 11 per cent compared with 2014 ($9,000).
Qualified candidates changing jobs in 2016 can realistically expect an average salary increase of 15-25 per cent, according to the latest annual Global Salary Survey from Robert Walters, released in January. Companies in Vietnam are keen on hiring mid- to senior-level professionals with international experience to address skill shortages and assist them in designing solid management succession plans.
Sustained demand in the local candidate pool as well as an acute talent shortage has resulted in an increasing focus on returning Vietnamese professionals and attracting professionals from outside of the industry, according to Mr. Whitehead. “When vying for top-tier talent, employers need to be aware that while an attractive salary is always an important factor, offering a structured career progression will be more crucial than ever in 2016,” he said.
Source: Vietnam Economic Times, February 2016 issue