Conducted by Navigos Search in 2018

1. THE LABOR MARKET IN MANUFACTURING
OPPORTUNITIES & CHALLENGES
IN THE 4.0 ERA
Navigos Group Vietnam
October 2018

2. 02THE LABOR MARKET IN MANUFACTURING: OPPORTUNITIES & CHALLENGES IN THE 4.0 ERA
EXECUTIVE SUMMARY
The global economy is experiencing unprecedented change as a result of the
fourth Industrial Revolution, especially in the last 5 years. As the recipient of
FDI from manufacturing giants such as Japan and Korea, Vietnam stands
great opportunities to catch onto leading trends of the era including digitalization
and automation. At the same time, 4.0 technologies present new obstacles for
businesses to improve our manpower.
Manufacturing in Vietnam has remained one of the leading industries with
highest potential for economic growth. However, unless actions are taken to
incorporate new technologies, Vietnam risks losing its attractive profile in the
eyes of foreign investors to other developing countries in the area. To facilitate
this technological transition, the efforts made by businesses to invest in
machinery and tools must be solidified by an improvement in the quality of
manpower.
With 16 years of experience in the field of human resources and recruiment
services, Navigos Group has considered manufacturing businesses our
top-priority partners. This report “The manufacturing labor market in the 4.0
era” is produced with the purpose of assisting manufacturers resolve their
transitory challenges in the time of enormous technological advancement.
We hope the insights provided in this report would help businesses craft
stronger strategies in terms of human resources, leading to a smooth and
sustainable technological transition. By analyzing the perspectives of both
employers and employees, we also seek to equip candidates in the industry
with up-to-date information on the needs and demands of businesses in the
4.0 era.
Gaku Echizenya
CEO of Navigos Group Vietnam

3. OVERALL INFORMATION
SURVEY PARTICIPANTS - CANDIDATES
03THE LABOR MARKET IN MANUFACTURING: OPPORTUNITIES & CHALLENGES IN THE 4.0 ERA
Officer
Deputy manager / Manager
Team leader
Supervisor
Deputy director / Director
38%
22%
20%
11%
6%
TITLE
FIELDS THEY ARE WORKING IN
Engineering
Electronics / High technology
Garment / Textile / Footwear manufacturers
Building materials / Construction
F&B
Chemicals
Energy / Oil & Gas
Agriculture
Packaging / Printing / Labeling
FMCG
Technical sales
25%
17%
12%
6%
5%
5%
4%
3%
3%
3%
2%
100% foreign capital company
Joint-stock company
Private company
Limited liability company
State-owned company
Joint venture
40%
18%
17%
12%
7%
5%
COMPANY MODEL

4. 04THE LABOR MARKET IN MANUFACTURING: OPPORTUNITIES & CHALLENGES IN THE 4.0 ERA
OVERALL INFORMATION
SURVEY PARTICIPANTS – EMPLOYERS
FIELDS THEY ARE WORKING IN
Engineering
Garment / Textile / Footwear manufacturers
Electronics / High technology
Building materials / Construction
Chemicals
Packaging / Printing / Labeling
Other
15%
15%
11%
7%
7%
7%
23%
<100
100-500
501-1000
1001-5000
>5000
43%
68%
29%
24%
8%
NUMBER OF EMPLOYEES

5. 04CHÂN DUNG NHÂN LỰC NGÀNH SẢN XUẤT: THÁCH THỨC VÀ CƠ HỘI TRONG NỀN CÔNG NGHIỆP 4.0
OPPORTUNITIES
AND CHALLENGES FOR
THE MANUFACTURING
INDUSTRY
PART 1
05THE LABOR MARKET IN MANUFACTURING: OPPORTUNITIES & CHALLENGES IN THE 4.0 ERA

6. PROFESSIONAL SKILLS ARE THE TOP QUALIFICATIONS FOR
CANDIDATES
"Professional skills" were selected by 73% of all candidates
as the most important prerequisite for job seekers in
manufacturing, followed by problem-solving skills (42%),
high discipline (39%) and adaptability (15%).
As for employers, 30% of respondents chose "professional
skills" as their top priority. Most agreed a lack of
professional knowledge and relevant skillsets would
mean personnel would be incompetent in the workplace.
Employees themselves also recognized various
limitations such as “lack of proactivity” (72%), “lack of
self-learning ability” (45%), “lack of professional
knowledge” (36%) and “lack of discipline” (36%).
Manufacturing staff have a high tendency to commit to
their companies. 40% stated that they had worked at
their current company for more than 5 years, while 30%
had worked in their previous companies for 5 years or
more. Conclusively, a stable job is one of the most
crucial factors for most job seekers (41%) in
manufacturing. At the same time, 73% of businesses
said they have kept retrenchment rates at below 20%.
Employers and employees are also on the same page
on retention. Most appreciate jobs with stability (58%),
followed by a competitive salary (49%) and attractive
bonus (23%).
CANDIDATES IN THE MANUFACTURING INDUSTRY LOOK FOR A STABLE
JOB AND PREPARE TO COMMIT TO THEIR EMPLOYERS
06THE LABOR MARKET IN MANUFACTURING: OPPORTUNITIES & CHALLENGES IN THE 4.0 ERA

7. 40%
25%
23%
12%
Less than 1 year
> 5 years
1 – 3 years
3 – 5 years
WORKING YEARS AT CURRENT COMPANY
39%
29%
23%
19%
Less than 1 year
> 5 years
1 – 3 years
3 – 5 years
WORKING YEARS AT PREVIOUS COMPANY
EMPLOYERS RETENTION FACTORS
42%
31%
15%
3%
>50%
<10%
8%
31 – 50%
10 – 20%
21– 30%
COMPANY’S TURN-OVER RATE
Stable job
Competitive salary
Safe working environment
Attractive bonus
Competent direct manager
58%
49%
34%
23%
20%
07THE LABOR MARKET IN MANUFACTURING: OPPORTUNITIES & CHALLENGES IN THE 4.0 ERA

8. CANDIDATES – TOP 5 REASONS FOR LEAVING THEIR PREVIOUS JOBS
OBSTACLES FOR THE MANUFACTURING SECTOR
When asked about the reasons for leaving their previous
companies, employees selected the top 3 being
unsatisfactory salary and benefits, little promotion
opportunities and slow pay rises. Moreover, location (15%)
as well as working environment (15%) were also taken
into consideration. For high-level candidates such as
deputy directors, directors and above, 16% of respondents
reported being "not in line with their managers".
On the challenges for the whole sector, a polluted working environment and remote workplaces were also notable
barriers.
49%
Uncompetitive
salary and
benefits
43%
Unclear
promotion
policy
30%
Low and slow
salary
increase
16%
Not in line
with direct
managers
15%
Working
location if far
from the center
38%
Uncompetitive
salary and
benefits
36%
Unclear
promotion
policy
36%
Workplace
pollution
(air, noise,…)
31%
Low and slow
salary
increase
26%
Working
location is far
from the city
center
15%
Workplace
pollution
(air, noise,…)
WORKPLACE POLLUTION IS IN TOP 5 REASONS FOR QUITTING
08THE LABOR MARKET IN MANUFACTURING: OPPORTUNITIES & CHALLENGES IN THE 4.0 ERA

9. 51% of the candidates reported that hard skills were the
most common agenda for training. 64% of surveyed firms
shared the same opinion. At the same time, few
manufacturing staff have had training on soft skills (15%)
or foreign languages (6%). For employers, this ratio was
17% and 5% respectively.
Traditional training methods such as on-the-job training,
in-house training or in-service training for subordinates are
still common in the manufacturing sector. On the other
hand, online training is rare, answered 5% of job seekers
and 4% of surveyed enterprises. The survey also recognized
a substantial number of businesses (15%) that did not
provide any training on professional knowledge, soft skills
or foreign languages. 7% of respondents reported that their
employers had no form of training at all.
TRAINING IS STILL LARGELY CONVENTIONAL
Specialized skills
Soft skills
None
Languages
EMPLOYERS - TRAINING METHODS
ARE FOCUSED MOSTLY ON
CANDIDATES – TRAINING PROGRAMS
ARE FOCUSED MOSTLY ON
EMPLOYERS – TRAINING PROGRAMS
ARE FOCUSED MOSTLY ON
On-the-job training
Internal training courses
Top-down training (seniors train juniors)
External training courses
Send employees abroad for training
None
Online training courses
69%
44%
43%
18%
8%
7%
5%
On-the-job training
Top-down training (seniors train juniors)
Internal training courses
External training courses
Send employees abroad for training
Online training courses
None
83%
53%
50%
27%
6%
4%
2%
CANDIDATES - TRAINING METHODS
ARE FOCUSED MOSTLY ON
51%
15%
16%
6%
Specialized skills
Languages
Soft skills
None
64%
5%
17%
5%
09THE LABOR MARKET IN MANUFACTURING: OPPORTUNITIES & CHALLENGES IN THE 4.0 ERA

10. Candidates selected a competitive salary (62%),
clear promotion policy (44%) and attractive bonus
(30%) as reasons for commitment to a company.
The most common form of reward is the 13th
salary
month, chosen by 62% of staff and 48% of
employers. In addition, incentive schemes based
on labor productivity, monthly, quarterly and
yearly bonuses are also popular.
62%
44%
30%
29%
23%
19%
16%
11%
10%
9%
4%
SALARIES, BONUSES AND REWARDS REMAIN CRUCIAL TO
RETAINING EMPLOYEES
REASONS FOR COMMITMENT TO A COMPANY
REWARD SYSTEMS OF CANDIDATES’ COMPANY
Competitive salary
Clear promotion policy
Attractive bonus
Capability of direct supervisor
Stable jobs
Effective training program
Safe working environment
Employee engagement program
Health check program for employees
Flexible working time
Health check program for employees’ relatives
45%
13th
-month
salary
27%
Reward
every month /
quarter / year
26%
Reward
based on
productivity
12%
Reward
based on
working years
7%
None
REWARD SYSTEMS OF EMPLOYERS
48%
Reward
based on
productivity
43%
13th
-month
salary
33%
Reward
every month/
quarter/ year
18%
Reward
based on
working years
1%
None
10THE LABOR MARKET IN MANUFACTURING: OPPORTUNITIES & CHALLENGES IN THE 4.0 ERA

11. 11THE LABOR MARKET IN MANUFACTURING: OPPORTUNITIES & CHALLENGES IN THE 4.0 ERA
MANPOWER SHORTAGES
AND RECRUITMENT ISSUES
PART 2

12. MANPOWER SHORTAGES ARE COMMONPLACE FOR
MANUFACTURING FIRMS
deficiency affected the current staff. 37% of
employees stated that their workload increased as a
result, while 7% even had difficulty making time for
personal activities.
This shortage is in both quantity and quality of
candidates, reported 35% of manufacturing enterprises.
35%
17%
14%
9%
8%
5%
4%
3%
3%
EMPLOYERS
REASONS FOR MANPOWER SHORTAGE
Candidates do not meet qualifications
Compensation & benefit-related factors
Too few candidates
Highly competitve market
High turnover rate
Bad working conditions in factories
Urban workers do not want to work in industrial zones
Slow promotion process or no promotion
Other
WEAK EMPLOYER BRAND AN OBSTACLE TO RECRUITMENT
A weak employer brand was identified as one of the top 5
recruitment challenges for manufacturing firms. 29% of
surveyed employers answered they had difficulty gaining the
attention of job seekers while 32% proposed "building a strong
employer brand” as a solution.
Both respondent groups agreed that “career trends of young
candidates” contributed to recruitment challenges in manufacturing.
There are various factors at play in the recruitment
landscape, especially when it comes to young
jobseekers. Influence from the Fourth Industrial
Revolution, digital transformation, increased
proactiveness and attractive job alternatives would
undoubtedly affect the career choices of young
professionals in the near future.
55% of respondents claimed that their employers suffered
from manpower shortages. From the perspective of said
organizations, the majority reported lacking different levels of
staff, mostly under 10%. Only 15% were confident they would
experience no inadequacy.
More than half of the respondents agreed that personnel
12THE LABOR MARKET IN MANUFACTURING: OPPORTUNITIES & CHALLENGES IN THE 4.0 ERA

13. 49%
42%
24%
To overcome manpower shortages, manufacturing
businesses have engaged in various recruitment activities,
the most common being sourcing services (46%) in
collaboration with schools. Having partnerships with training
facilities to improve (22%) or customize (21%) the
curriculum to meet recruitment needs is also prevalent.
Vocational schools (49%) ranked highest on the list of
training facilities preferred by employers to support
recruitment, followed by universities (42%) and junior
colleges (24%).
VOCATIONAL SCHOOLS ARE PREFERABLE FOR TRAINING
COLLABORATION
Vocational schools
Universities
Junior colleges
High schools 8%
58%
42%
39%
29%
19%
EMPLOYERS
RECRUITMENT CHALLENGES
Highly competitive market
Career trends of young candidates
Remote, far from the city office
Weak employer brand
Change in employer benefit policies
13THE LABOR MARKET IN MANUFACTURING: OPPORTUNITIES & CHALLENGES IN THE 4.0 ERA

14. 14THE LABOR MARKET IN MANUFACTURING: OPPORTUNITIES & CHALLENGES IN THE 4.0 ERA
PART 3
MANUFACTURING
FIRMS ARE PREPARING
FOR NEW TECHNOLOGIES

15. According to our survey, 81% of candidates and 86% of employers stated that their companies had implemented up to
70% of automated manufacturing processes.
23%
23%
18%
14%
8%
MANUFACTURING IS SHIFTING TO AUTOMATION
AUTOMATION IS VIEWED IN A POSITIVE LIGHT
0 – below 10% of all manufacturing processes are automated
10 – below 30% of all manufacturing processes are automated
30 – below 50% of all manufacturing processes are automated
50 – below 70% of all manufacturing processes are automated
More than 70% of all manufacturing processes are automated
19%
22%
19%
12%
9%
Candidates Employers
It is noticeable that both manufacturing firms and their staff have made preparations to adapt to new technologies in
various ways.
65%
44%
41%
39%
21%
BUSINESSES AND JOB SEEKERS HAVE ACTIVELY PREPARED FOR
AUTOMATION
Invest in machines
Make changes in management and operations
Invest in data systems
Equip employees with new skills
Employ candidates with knowledge in automation
61%
37%
35%
34%
21%
Candidates Employers
59%
25%
Automation increases labor productivity, cuts cost
Automation is inevitable for manufacturing firms
48%
30%
Candidates Employers
On shifting to automation, both candidates and employers agreed that new technologies of the 4.0 era had made a positive
impact. The most common rationale were “automation increases labor productivity” and “automation is inevitable for
manufacturing firms”. Only 3% of participants from both groups claimed that “Automation will result in substantial job losses”.
15THE LABOR MARKET IN MANUFACTURING: OPPORTUNITIES & CHALLENGES IN THE 4.0 ERA

16. The majority of both candidates (70%) and employers (70%) shared the opinion that automation
would strongly affect blue-collar workers. The least affected would be support departments (sales,
accounting,...).
47%
53%
33%
47%
5%
2%
Actively learn from colleagues
Actively take part in professional training
Actively take part in soft skills courses
Actively improve language abilities
Wait for training from employers
Take no action
From the candidates’ perspective, they also underwent training to heed changes.
BLUE-COLLAR WORKERS ARE MOST AFFECTED BY
AUTOMATION
70%
5%
4%
4%
Blue-collars
Engineers
Authorities
Support departments
70%
5%
4%
2%
Candidates Employers
16THE LABOR MARKET IN MANUFACTURING: OPPORTUNITIES & CHALLENGES IN THE 4.0 ERA

17. 17THE LABOR MARKET IN MANUFACTURING: OPPORTUNITIES & CHALLENGES IN THE 4.0 ERA
PART 4
RECOMMENDATIONS
FROM NAVIGOS GROUP

18. Combining the use of various recruitment channels
was surveyed as the most effective method by
our respondents. Some suggestions may include
internal referral programs for current employees,
targeting fresh graduates with on-the-job training,
using online channels such as job portals
(VietnamWorks) or social media to improve
recruitment output. When using these platforms,
employers should also consider purchasing
service packages most suitable for their
recruitment needs.
In the manufacturing industry, working hazards
are abundant. Keeping in mind specific setbacks
such as pollution, unsafe working environments,
unclear promotion paths and such is the key to a
customized employee benefits program that
would best support and attract people.
The manufacturing industry is getting more and
more technology-intensive. As we undergo the
Fourth Industrial Revolution, conventional education
models focusing on technical knowledge can no
longer guarantee robust manpower. Digital
knowledge and a firm grasp on the nature of
technology should take priority in education so
that qualified workers are confident about
proposing and applying the best technological
applications.
EMPLOYEE BENEFIT PROGRAMS
DESERVE MORE ATTENTION
TIMELY UPDATE AND TRAINING FOR PROACTIVITY
SHOULD BE PRIORITIZED
DIVERSIFYING RECRUITMENT METHODS
IS MOST EFFECTIVE
18THE LABOR MARKET IN MANUFACTURING: OPPORTUNITIES & CHALLENGES IN THE 4.0 ERA

19. It is highly anticipated that in the near future, the
manufacturing sector will experience a secondary
labor surplus while still lacking skilled workers. So far,
most businesses have partnered with educational
facilities such as universities, junior colleges or
vocational schools to closely train and prepare
students for recruitment.
Blue-collar workers on the production lines have
a deep understanding of operating machinery.
This is a potential group to advance to more
senior positions in the near future when 4.0
technologies are more widely applied. They will
be able to improve automated processes,
operations, maintenance, quality monitoring and
quality control. This approach would also ease
the impact of job loss for workers.
A strong employer brand is crucial to establishing
a different position in the market. Partnering with
training institutions or taking advantage of social
networks are some suggestions for businesses to
strengthen their brands and target and tap into
potential manpower.
FIRMS SHOULD PARTNER CLOSELY
WITH EDUCATIONAL FACILITIES
TO TAP INTO POTENTIAL MANPOWER
THE BLUE-COLLAR WORKFORCE HOLDS HIGH POTENTIAL
BUILDING A STRONG EMPLOYER BRAND
IS KEY TO ATTRACTING JOBSEEKERS
19THE LABOR MARKET IN MANUFACTURING: OPPORTUNITIES & CHALLENGES IN THE 4.0 ERA

20. THE COPYRIGHT OF THIS REPORT
BELONGS TO NAVIGOS GROUP VIETNAM
For more infomation, please kindly contact
communication@navigosgroup.com
Address
Ho Chi Minh City
Floor 20, E.Town Central, 11 Doan Van Bo street, Ward 12, District 4
Tel: 84-28 5404 1373
Fax: 84-28 5404 1372
Hanoi
V-Building, 125-127 Ba Trieu street, Hai Ba Trung Ward
Tel: 84-24 3974 3033
Fax: 84-24 3974 3036
Website
www.navigosgroup.com