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Vietnam Businesses Struggle to Find Workers

  • Matt Steinglass

With Vietnam's economy booming, businesses are having a harder time recruiting staff. Some factories are running below capacity for want of workers. The shortage comes to a head during the traditional lunar New Year holiday, or Tet, when urban Vietnamese return to their native villages - and their employers hope they come back. From Hanoi, Matt Steinglass has more.

With barely more than two weeks before Tet, the Vietnamese lunar new year, the streets of Hanoi are starting to fill with the traditional decorations of kumquat trees and peach blossoms. Airline and train tickets for the holidays are already sold out, as city residents prepare to return to their ancestral villages for the holidays.

Officially, the Vietnamese get a week off for Tet. But each year, some of them stay home for a few days longer. And some simply find work elsewhere, and never come back at all.

It is a habit their employers do not appreciate, said Bui Van Tho, the personnel manager at the Viet Hung garment company in Hanoi.

Tho says about 70 percent of his company's workers will come back from Tet on time. Twenty percent will come back late, and 10 percent will never come back.

Nguyen Huu Dung, the head of Vietnam's Social and Labor Sciences Institute, says post-Tet no-shows have become a serious problem.

Dung says at some garment companies, up to 40 percent of workers fail to come back after Tet. He says workers abandon their jobs if they can find similar ones in their home provinces.

The problem is exacerbating a labor shortage in many sectors of Vietnam's booming economy. Nguyen Thanh Tung, the employment services director at Ho Chi Minh City's industrial parks board, says companies lack both skilled and manual laborers.

Tung says the shortage has grown more severe over the past few years. He says technology companies in Ho Chi Minh City's industrial parks have been short by 500 to a 1,000 engineers for three years now.

Increasingly, he says, somewhere between five and seven percent of high-tech workers fail to return after Tet.

Labor shortages, surprisingly, are a common problem in the developed and developing East Asian countries, despite their often huge populations.

Even in China, with its 1.3 billion people, many factory owners are experiencing a shortage of workers.

Dang Trung Dung of the Vietnamese leather manufacturing company Ladoda has been seeking 50 skilled leatherworkers for four months.

Dung says just four new skilled leatherworkers have turned up so far.

The company's expert staff are stuck stitching wallets on the production line, he says, when they should be designing new products.

Even as the factories starve for workers, Vietnam has a vast supply of surplus labor in the countryside. Almost 60 percent of the workforce works in the inefficient agricultural sector.

Impoverished rural workers should be happy to find work in urban factories. But a 2005 report by the Asian Development Bank says the Vietnamese labor market suffers from "market segmentation" - that is, rural farm workers are not moving to fill the urban labor shortage.

The ADB report says the government fails to enforce minimum wage and social insurance laws, which discourages farmers from taking factory jobs.

Another problem is communist Vietnam's system of residency permits. Many migrant workers cannot get permits to live in big cities like Hanoi and Ho Chi Minh City. Without a residency permit, migrant workers have difficulty qualifying for public health care, or sending their children to school.

But the Asian Development Bank says the main reason for the shortage is a lack of training. The ADB says government educational and training institutions "lack the capability to prepare the population" for the changing economy.

Nguyen Huu Dung of the Social and Labor Sciences Institute says the government is working on the problem.

Dung says vocational schools need to adapt to the skills that the market demands, and more links need to be made between schools and employers.

That cannot happen soon enough for employment services manager Tung.

Tung says it used to be that workers needed employers. Now, it is the employers who need the workers. And with Tet coming up, businesses can only hope their employees will still be there when the holidays end.

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