Additionally, the types of subleased occupations covered by the regulations do not reflect the exact nature of the work currently performed by private employment agency workers and required by user enterprises. The lack of flexibility in this area is likely to cause major operational and compliance issues for market participants, and does not address the requirements of user enterprises in the market.
The Role of Private Employment Agencies
As Vietnam is moving from an agricultural to a manufacturing-based economy, the need for a flexible workforce has become increasingly prevalent. There continues to be a lack of skilled workforce and high unemployment in the 18 to 25 years age range. Private employment agencies create a stepping stone into permanent employment via the services of temporary staffing — not only employing but also giving the job training which is required in Vietnam.
Furthermore, private employment agencies have been able to assist public employment services that struggle with the changing needs of enterprises and employees alike. Various organisations recognise that private employment agencies can contribute to the functioning of the labour market as a whole. By allowing these agents to offer a full range of services, including temporary work, contingency staffing, outsourcing and managed business services, Vietnam would be better equipped to fill the gaps of a changing labour market. The lack of human resources and a skilled workforce is recognised as one of the biggest challenges to Vietnam’s economy.
Private employment agencies employ 9.5 million people worldwide, with over 700,000 jobs created through the use of a temporary workforce. It is estimated that regarding the abovementioned types of services, if the worldwide statistics were applied to Vietnam, this would result in the creation of jobs for 70 percent of the 18 to 24-year-olds entering the workforce every year.
Research conducted by the Vietnam Employment Agencies Federation (VEAF) in 2013 show that the top 10 agencies employ over 13,500 people and generate revenue in excess of €42 million (VND1.12 trillion) per annum. The VEAF believes the industry is worth over €100 million (VND2.67 trillion) revenue in 2014 and will continue to grow, hence adapting the nature of this work is very important.
Opening up Vietnam to allow for a temporary staffing model under the guidance of the Ministry of Labour, Invalids and Social Affairs — and working with the VEAF — would ensure full protection of employees’ rights and statutory insurances, and would allow self-governance in the industry. There is an inverse relationship between the temporary work penetration rate and the level of informal employment in a country, and these measures would allow the young workforce to gain invaluable experience and build up their skill set.
This would contribute to increasing the number of skilled workers in Vietnam, and potentially provide a resource pool for future investment projects providing for long-term employment. As a result, international corporations would be more inclined to establish operations in the country, leading to further benefits for Vietnam such as knowledge transfer and sharing of best practices.
Nicola Connolly is the general director of Adecco Vietnam and chairwoman of the European Chamber of Commerce in Vietnam