For Asia, the lack of available candidates is the most pressing challenge, preventing 3 out of 10 employers from hiring enough qualified people to meet their needs. A few key reasons include the gap between academic training and hiring demands, and the availability as well as quality of the skilled workforce. Despite companies struggling to fill jobs, the proportion of young people ‘Neither in Employment, nor in Education or Training’ (NEET) has continued the steep upward trend recorded since the start of the financial crisis. In some countries, almost one-quarter of young people aged 15 to 29 are now NEET.
Youth Unemployment in Vietnam in 2014
Since joining the WTO, Vietnam has become a candidate-driven market and remains so, despite a sluggish GDP increase of 5.98 percent in 2014. In 2014, the top-five in-demand positions in Vietnam by job category were finance, sales, engineering, IT and HR. However, there is a gap between supply and demand, most visibly in finance.
Although it has a young population, Vietnam also faced similar challenges with youth unemployment in 2014, where almost 17 percent of young jobseekers are fresh university graduates. As the economy slowly recovered, companies both domestic and international became pickier at senior levels.
While qualified and experienced candidates will continue to be hired, younger graduates will face more competition. This is due to a competency gap between the needs of employers and the capabilities of new job seekers; only the fittest will survive and get hired. This is considered a huge concern for Vietnam moving forward, as it needs to create one million jobs a year to maintain its low unemployment rate.
The Role of Private Employment Agencies in 2015
Under the shift from an agricultural to manufacturing-based economy, the need for a flexible workforce in Vietnam has become more prevalent.
With the need for a skilled workforce and with youth unemployment rates rising, private employment agencies are expected to play a more important role by creating a stepping stone into permanent employment via the services of temporary staffing — not only providing jobs but also giving the training required.
Worldwide, private employment agencies employ 9.5 million people, with over 700,000 jobs created through the use of this temporary workforce. The top 10 agencies in Vietnam employ over 13,500 people, and generate revenue in excess of €42 million per annum.
However, for Vietnam to fully leverage the roles of private employment agencies and ensure full protection of employee’s rights, there needs to be a move to internationally recognised principles governing private employment agencies. Penalties should be enforced against rogue agencies, which do not adhere to regulations and fail to meet their obligations or safeguard workers’ rights.
It is also necessary to remove the imposed maximum term of the labour sublease agreement, which requires enterprises to change workers every 12 months. Such term entails a significant training burden, particularly as 65 percent of Vietnam’s workforce is still deemed unskilled.
Nicola Connolly is the general director of Adecco Vietnam and chairwoman of the European Chamber of Commerce in Vietnam