Bridging the Skills Gap in Vietnam: A Collective Effort

By Divya Juneja
RMIT Lecturer in Human Resource Management
Wed, March 6, 2024 | 8:06 AM GMT+7

Vietnam’s Economic Landscape

Vietnam stands at a pivotal junction, characterized by remarkable economic growth in recent years. The nation’s GDP, climbing from $304.47 billion in 2018 to an anticipated $657.28 billion by 2028, illustrates its escalating significance on the global stage. Factors such as a youthful labor force and enhanced global connectivity have solidified Vietnam’s status as a frontline destination for foreign direct investment (FDI).

The Call for Skills

Dr. Santiago Velasquez, MBA associate program manager at RMIT University Vietnam, emphasizes that FDI companies consistently seek to minimize risks. This necessitates a workforce equipped with skills that enhance productivity, transparency, and financial security. In essence, the assurance of locally available talent can heavily influence foreign investment decisions.

Nguyen Bich Hong, general director at HR2B, reiterates this sentiment. She asserts that aligning skill sets within the labor force to meet business strategies is crucial. The more assured investors are about a robust skill base, the more inclined they are to commit to Vietnam.

A Shift in Workforce Dynamics

The rapid evolution of the modern workplace demands that companies innovate their workforce strategies. Dr. Jung Woo Han, senior program manager at RMIT, notes that technological disruption requires comprehensive systems to adapt. However, a concerning challenge exists: a significant skills gap among the Vietnamese workforce.

Despite improvements in analytical and digital skills, a Talentnet survey highlights that 61% of companies struggle to find suitable candidates at the right moment. This shortage becomes evident when organizations reach out for specific high-skilled roles post-implementation of change programs.

The Outsourcing Dilemma

Due to the scarcity of readily available skilled talent, many companies resort to outsourcing as a necessary measure. While effective in the short term, outsourcing can incur substantial costs and lead to slower learning curves for local employees, as pointed out by Dr. Velasquez.

Industry-Specific Challenges

Technology and AI Sectors

The demand for talent is particularly pronounced in tech-driven fields like artificial intelligence and digital transformation. Tran Thu Thao, talent acquisition executive at Navigos Group, indicates that these sectors will continue to witness talent shortages, necessitating a stronger focus on recruiting high-quality human resources.

Hospitality and Tourism

The hospitality sector also grapples with significant hiring challenges. A noticeable decline in student enrollment in tourism courses has made it difficult to fulfill the industry’s skill requirements despite efforts to recruit from other professions.

Manufacturing and Healthcare

These sectors face similar hurdles. The disconnection between educational outputs and the demands of the global economy exacerbates the skills gap. This discord lends to a growing need for targeted educational reforms.

Language Proficiency Challenges

Language skills also play a critical role in the evolving job landscape. Despite its young demographic, only a fraction of the workforce is fluent in English, with an even smaller number proficient in other languages such as Japanese, Chinese, and Korean. As Vietnam attracts a diverse array of businesses, bridging this linguistic gap is essential.

The Golden Age of Workforce

Vietnam’s population, with a median age of 32.5 years, presents a vibrant labor force that is appealing to investors. However, harnessing this potential necessitates significant investment in education, vocational training, and workforce development initiatives.

Upskilling and Reskilling Opportunities

Initiatives aimed at upskilling and reskilling the workforce in critical areas such as digital skills and cybersecurity should be prioritized. Such programs not only enhance individual employability but also equip the labor market to cater to growing industry demands.

Emphasizing Authentic Learning Experiences

Dr. Jung Woo Han advocates for project-based and work-integrated learning as essential components. These methodologies can foster crucial soft skills like communication and resilience, which are vital in a technology-driven economy.

Collaboration for a Skilled Future

Addressing the skills gap requires collaborative efforts among various stakeholders, including educational institutions, governmental agencies, and private sectors. By working together, these entities can identify specific competencies that industries require, tailoring training programs accordingly.

The evolving job market in Vietnam signals both opportunity and challenge. Understanding and addressing the skills gap is imperative not just for attracting foreign investments but also for ensuring that the local workforce can thrive in a digital economy.