The headquarters of Vietnamworks, a leading recruitment company in Vietnam. En-Japan said last month it bought 89.8 percent of the Ho Chi Minh City-based company.
Although a stagnant economy has many businesses scaling down and even shutting down, leading global recruitment agencies continue to open up shop in Vietnam.
Japan-based En-Japan Inc announced last month that it is buying stakes in Vietnam's leading recruitment company Navigos Group, which runs the two biggest jobs websites in Vietnam, vietnamworks.com and navigossearch.com.
Navigos has declined to reveal the deal's value, but En-Japan said it bought 89.8 percent of the Ho Chi Minh City-based company, or around 9.98 million shares worth US$22.11 million.
Reuters earlier quoted En-Japan, which has operations in China, Singapore, Hong Kong, Australia, and Korea, as saying that it would acquire the remaining 10.2 percent by March 2016.
En-Japan has entered Vietnam just after US online employment giant CareerBuilder opened an office here in February. The US company announced its investment in Vietnam with a deal to buy out DFJ VinaCapital, the main shareholder of Vietnam Online Network (VON), which owns job sites HRVietnam.com and kiemviec.com. The value of the deal has not been revealed.
At the same time, Jobstreet.com, the Southeast Asia's largest online employment company - founded in Malaysia - has launched recruitment consultancy programs in Vietnam.
Nguyen Thanh Nam, director of the strategy consulting firm Win-Win, said many foreign investors have been interested in recruitment services here for the past few years.
Revenues from online job service providers will continue increasing because local companies have gotten used to recruiting employees online, he said.
"Now is a good time for foreign firms to buy stakes in local jobs firms. They can negotiate good prices as the economy has not yet rebounded," Nam said.
Like many other companies, job service providers have also faced difficulties sparked by the economic slowdown, he said. Labor demand has decreased as businesses continue shutting down. According to a recent survey conducted by Vietnamworks, 55 out of 58 surveyed industries saw negative growth in online recruitment demand in 2012.
According to a recent report by the Vietnam Chamber of Commerce and Industry (VCCI), the number of businesses that shut down or suspended operations increased by 6.29 percent last year to over 54,200. Most of them were in the finance, banking, and real estate sectors.
However, Nam said this is a temporary difficulty as the demand for labor will increase when the economy rebounds, he said. "There will be many opportunities for online recruitment firms in the coming time."
Talking about the opportunities, Navigos Group's Chief Executive Officer Carlton Pringle said: "2013 commenced with the hangover of late-2012, and general economic malaise, so to return an almost identical quarter year-on-year for the first quarter of 2013 compared with the first quarter of 2012 in terms of online labor demand is quite a solid foundation for a strong 2013."
Vietnam's online recruitment market has a lot of potential for growth, he said.
"With a population of over 90 million, the third largest ASEAN country, and an average age of 28, Vietnam offers an exciting future with enormous potential for economic growth."
"Job search websites are expected to be an important tool along with the economic growth of Vietnam, where the working population is increasing," he said.
While the Internet penetration rate in the country is 36.6 percent, job search sites are likely to play a yet more significant role as the penetration rate rises from now on, Pringle added.
"The driving force behind Vietnam's rapid development is its developing workforce," he said.
"VietnamWorks and Navigos Search have, in the past 11 years, come to be the pre-eminent recruitment partners to companies of all shapes and sizes in fast-growing Vietnam. And we are thrilled to be partnering with En-Japan and En-World for the next phase of our development, confident of the ongoing potential of this very exciting market."
IT, electronics, consulting and retail and wholesale are expected to be promising for online recruitment, he said.
Based on VietnamWorks first quarter of 2013 online employment report, the best industries for job seekers remain in IT. Most notably, job growth in software development in Da Nang has tripled. Electronics (up 28 percent), consulting (up 32 percent), textile and footwear (up 38 percent), pharmaceuticals and bio-tech (up 66 percent), and retail and wholesale (up 105 percent) all proved themselves recession-proof.
Vietnam now houses some 50 online job websites, but vietnamworks.com and kiemviec.com account for 90 percent of the marketshare, according to the DFJ VinaCapital. Thus, the two M&A deals means that the real competition will be between En-Japan and CareerBuilder.
Pringle said his team is ready.
"For example, we are preparing the launch of our nation-wide jobseeker campaign which promises to be extremely useful for new graduates in this June."
Hunter Arnold, president of CareerBuilder Asia-Pacific, said the fact that CareerBuilder has become VON's strategic partner will help accelerate its penetration into the domestic market.
Paul Nguyen, general director of kiemviec.com and HR Vietnam, said his firm needs to accept global competition but that it is very hard for it to survive and compete with global economic giants. To some extent, it had no other choice but to merge with larger partners, he said.
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