(Hanoi, 30th) The Vietnamese government is actively attracting foreign companies to invest and set up factories, but local foreign-funded enterprises are facing difficulties in recruiting workers. They have been forced to spend heavily, launching a ‘bidding war’ by offering signing bonuses as high as two months’ salary, along with other allowances, in order to recruit enough workers.
Online media outlet “VnExpress” reported that the center of this battle for workers is the industrial corridor spanning northern Vietnam’s Bac Ninh Province. According to the Bac Ninh Province Employment Service Center, Foxconn, GoerTek, Luxshare Precision, and dozens of other electronics companies need about 334,000 workers this year, accounting for 70% of total demand.
To attract new staff, the signing bonuses alone have almost doubled labor costs for these foreign companies within a year. Last year, the highest level of signing bonus was 7 million Vietnamese dong (about 1,200 ringgit), paid over three months. This year, many companies have increased bonuses to 10 to 12 million dong.
Foxconn’s subsidiary Fushan Technology in Vietnam is recruiting 5,000 employees, with plans to expand its total headcount to 16,000 by the end of the year. The company is offering a signing bonus of 11 million dong for new employees, plus travel reimbursement. Fushan Technology also highlights in bold red letters on their recruitment flyers: “Seated (work), Normal temperature (work environment),” aiming to poach workers from competitors.
The garment manufacturing industry is the hardest hit. Since the electronics industry has absorbed the vast majority of the labor force, even with narrowing profit margins, garment factories are still forced to join the fierce bonus competition.
Although this resolves immediate staffing woes, it is not a long-term solution. To avoid falling into a vicious cycle, human resources teams from competing companies have begun coordinating to set minimum and maximum bonus standards for each recruitment cycle.
At the same time, bonus amounts fluctuate according to seasonal demand. During the peak production period from May to late October, when factories must rush to fulfill export orders, bonuses rise accordingly.
Nguyen Thi Thao, HR director of Crystal Martin Vietnam—a subsidiary of global garment manufacturing giant Crystal International—believes companies cannot rely on signing bonuses indefinitely, as this only pushes up production costs but has little effect on staff retention.
“Blue-collar workers will only become scarcer, and competition for new staff will only become fiercer. Signing bonuses are necessary, but in the long run, this measure is unsustainable.”
To attract new staff, the signing bonuses alone have almost doubled labor costs for these foreign companies within a year. Last year, the highest level of signing bonus was 7 million Vietnamese dong (about 1,200 ringgit), paid over three months. This year, many companies have increased bonuses to 10 to 12 million dong.
Foxconn’s subsidiary Fushan Technology in Vietnam is recruiting 5,000 employees, with plans to expand its total headcount to 16,000 by the end of the year. The company is offering a signing bonus of 11 million dong for new employees, plus travel reimbursement. Fushan Technology also highlights in bold red letters on their recruitment flyers: “Seated (work), Normal temperature (work environment),” aiming to poach workers from competitors.
The garment manufacturing industry is the hardest hit. Since the electronics industry has absorbed the vast majority of the labor force, even with narrowing profit margins, garment factories are still forced to join the fierce bonus competition.
Although this resolves immediate staffing woes, it is not a long-term solution. To avoid falling into a vicious cycle, human resources teams from competing companies have begun coordinating to set minimum and maximum bonus standards for each recruitment cycle.
At the same time, bonus amounts fluctuate according to seasonal demand. During the peak production period from May to late October, when factories must rush to fulfill export orders, bonuses rise accordingly.
Nguyen Thi Thao, HR director of Crystal Martin Vietnam—a subsidiary of global garment manufacturing giant Crystal International—believes companies cannot rely on signing bonuses indefinitely, as this only pushes up production costs but has little effect on staff retention.
“Blue-collar workers will only become scarcer, and competition for new staff will only become fiercer. Signing bonuses are necessary, but in the long run, this measure is unsustainable.”