Understanding the Challenges in Vietnam’s Labour Market and Exploring Solutions

The labour market in Vietnam, particularly in the Southeast region, is grappling with many challenges, especially following the COVID-19 pandemic. Recent reports from the Vietnam News Agency shed light on these issues, highlighting the urgent need for effective solutions to improve both working conditions and employment stability.

Unstable Job Market Post-Pandemic

The pandemic has had lingering effects on employment opportunities, leading to significant instability in the labour market. Many workers faced abrupt cuts in hours or even job losses during late 2022 and early 2023, primarily due to a downturn in customer orders and a shortage of operational capital. This precarious situation reflects a broader trend, where the unpredictability heightened by global events has left workers in a constant state of anxiety.

V.T. Thoa, an employee of PouYuen Vietnam Co. Ltd. in HCM City, is emblematic of the struggle many face today. After her contract was terminated, she began searching for new roles but has yet to find one. The pressure of supporting a family weighs heavily on her, yet she expresses gratitude for community support initiatives. Similarly, colleague L.M. Ngọc lost her job due to the company scaling back operations. Such anecdotes are not isolated; they signify a worrying trend where many families are forced to adapt and cope with systemic job cuts.

Rise in Unemployment Figures

The figures reflect a grim reality. In the first quarter of 2023, over 294,000 workers became unemployed or had their working hours reduced. Foreign-invested businesses disproportionately accounted for this decline, highlighting vulnerabilities inherent in these job markets. In several provinces, including Bình Dương and Đồng Nai, thousands faced similar struggles, leading families to send children back to hometowns, while spouses departed to seek more stable living situations.

As Củ Phát Nghiệp, Trade Union Chairman at PouYuen, notes, the rush back to hometowns was largely driven by fears over livelihood stability during the pandemic. Despite some recovery efforts by companies, recruitment remains stagnant, posing a significant challenge for both businesses and job seekers.

The Need for Improved Labour Management Policies

Vietnam’s economy faces pressure to recover from the effects of the pandemic. Deputy Minister of Labour, Invalids, and Social Affairs Lê Tấn Dũng stresses the urgent necessity to enhance labour management policies, advocate for high-quality human resources, and bolster sectors that drive economic growth.

The Southeast region, home to 10.487 million workers—about 20.31% of the national workforce—experiences the highest concentration of businesses and industrial parks in the country. Unfortunately, the high percentage of workers negatively affected during the pandemic underscores the importance of strategic planning and workforce development.

Data Management and Government Response

A significant challenge centers around the lack of accurate data for effective labour management. Currently, only about 10% of organizations report labour movement to relevant authorities, leading to inadequacies in support services and decision-making processes. Local authorities find themselves struggling to identify who needs assistance amid fluctuating economic conditions.

To tackle these challenges, experts advocate for enhanced communication and resource sharing between sectors, coupled with technology integration into data management systems. The establishment of a labour market information system may help in forecasting trends and imbalances in employment opportunities.

Strategies for Sustainable Employment

Advice from various experts, including Trần Anh Tuấn, suggests that Vietnam needs to establish concrete labour market policies that connect supply with demand. This would help ensure that training and employment opportunities meet the region’s current and future needs.

Moreover, as new-generation free trade agreements come into play, they may help level the playing field in the labour market, encouraging foreign investment while enhancing domestic job security. Localities must prioritize the development of human resources aligned with business demands to build a more resilient workforce.

Social Welfare and Support Programs

A comprehensive approach to social welfare will also play a critical role in stabilizing the labour market. Programs aimed at enhancing skills and providing job placements should be expanded. The HCM City People’s Committee has begun facilitating access to loans and financial support for informal sector workers, promoting entrepreneurship and self-sufficiency.

Using existing frameworks, local industries could also benefit from strategic partnerships with educational institutions, creating a feedback loop that ensures vocational training aligns with actual market needs.

Conclusion: Pathway to Recovery

As Vietnam emerges from the shadow of the pandemic, the path to recovery is fraught with challenges. Continuous efforts from both government and industry stakeholders are vital in reshaping the labour market. Through targeted policy improvements, effective data management, and robust social support systems, Vietnam can work towards a more stable and prosperous economic future for its workforce.