Truong Gia Binh (L), Chairman of FPT Corp., Vietnam’s largest listed telecommunications company, and FPT co-founder and chief executive officer Bui Quang Ngoc. Before Ngoc was appointed as CEO in July this year, Binh had had to fill in the post since Truong Dinh Anh resigned the post in September 2012 over “differences” with the board.
In Vietnam it is very difficult for firms to find candidates for CEO jobs because of the shortage of managerial experience.
Many have to hire expats even if they prefer Vietnamese, who would have a better understanding of the country’s culture, business environment, and legal system, managing director of recruitment firm Navigos Search Nguyen Thi Van Anh tells Vietweek.
Vietweek: How do you assess the executive recruitment market?
Nguyen Thi Van Anh: The economic slowdown has affected demand for mid-level and senior staff, which include those in the position of deputy director upwards, and experienced engineers. Amid the high production costs, high inventories of goods, and lower demand, firms cannot expand their business. They have to find ways to cut costs, including on personnel.
The pressure to cut costs is higher in some fields with high personnel costs like services. A wave of personnel cuts has occurred since 2011. But the middle- and senior-level markets have not seen a mass reduction because there are only a few positions for mid-level and senior employees in each company, and it is very difficult for companies to find talent.
Some other firms even take advantage of the current dull recruitment market to scour for talents for top positions though it is costly. It is easier for them to recruit employees now as they can have more options and time to assess candidates. It will be too late if firms leave executive search and recruitment until the economy recovers and their production and business bounce back.
It is very difficult to find executive talent, especially CEOs, in Vietnam. FPT has not been able to find a CEO for a long time.
In the field of information and technology, many Vietnamese and foreign firms wish to set up software development centers in the country, but they cannot find enough engineers to meet their demand because of the supply shortage. The qualifications of local engineers are not enough to meet the requirements of employers.
Many of our engineers do not know foreign languages, and are not updated on the developments in their fields.
Candidates for CEO jobs lack managerial experience and strategic vision. So many firms still have to recruit expats for the position though they prefer Vietnamese, who have better understanding of the country’s culture, business environment, and legal system.
FDI flows have increased this year. Have they impacted the executive recruitment market?
Registered capital is not important, only disbursed capital. Investors have demand for executive talent only when they execute their projects in Vietnam. We see an increase in demand for senior employees in some Japanese invested enterprises, but it is not a sharp rise.
In what sectors do firms face the most difficulty in executive search and recruitment?
It is difficult find CEOs in all sectors. Vietnamese can meet the requirements for middle-level positions. Most deputy directors and directors in firms are local people.
It used to be difficult 5-7 years ago for employers to find local people for even the director’s position in their companies, so they used to employ expats.
Now Vietnamese people have learned managerial skills, so directors in most companies are locals. I hope Vietnamese people’s qualifications improve in the next few years, and CEO recruitment will become easier.
Many multinational companies rotate employees between countries for staff training. They could move their employees in Thailand, Singapore, or Indonesia to Vietnam and vice versa. This way they are also training Vietnamese employees, helping improve the qualifications of local workers.
How do you assess the attractiveness of the Vietnamese market to foreign employees?
Many candidates from Japan, Hong Kong, Singapore have applied for jobs we advertise on our website. Some expats are willing to work in Vietnam because of political stability, high development potential, and acceptable income.
But senior candidates will not want to work in Vietnam because they want to develop their capacity in developed and competitive markets like the US and Japan. The Vietnamese market is very small, so the size of firms is also small.
Does Vietnam have a true executive recruitment market?
Not yet. Vietnam opened up for foreign direct investment over 20 years ago, and workers need more time to meet the requirements of firms. Firms’ needs in terms of both quantity and qualification have not been met yet.
The shortage of senior employees will be even more serious when the economy recovers and labor demand bounces back. The number of university graduates is very large, but their capabilities cannot meet firms’ requirements.
Hasn’t it been too long? After all Vietnam opened its doors more than 20 years ago?
Yes, it has been too slow. The changes in our educational system have not caught up with economic development, failing to meet the requirements of employers. FPT has even had to start a university to serve need for employees. Vietnam will become less competitive in attracting FDI unless the government carefully reconsiders the issue.
We would have to compete with other countries in attracting FDI by increasing workers’ productivity, not by offering low wages. The productivity of Vietnamese workers is low compared to that of those from China, Thailand, and Malaysia.
How are the salaries offered to executives?
The highest salaries are often seen in the financial and banking sector. CEO of banks could get hundreds of thousands of dollars a year, or even $1 million. CEOs in the manufacturing sector could get $200,000-300,000 a year.
Expats often get higher salaries than local employees in the same positions, maybe because of employers’ higher expectations.
|In the first half of 2013 moderate growth was reported across a broad array of sectors including industry and services, showing positive signs for business revival. The demand for executive staff has remained steady through the economic downturn, according to job website vietnamworks.com. The increase in FDI flows into Vietnam in the first six months of 2013 could also help boost demand for executive talent, as new investors look for senior managerial talent to head their enterprises.
VietnamWorks’ report says that demand for director/CEO positions increased by 20 percent in the first half of this year compared to a year earlier.
The industries with the biggest increase in demand included manufacturing with 66 percent, retail/wholesale trading with 64 percent, technology/engineering with 39 percent, and medical services/healthcare with 36 percent.
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By Bao Van, Thanh Nien News (The story can be found in the August 16 issue of our print edition, Vietweek)