Employment in Vietnam - Facts & Statistics in 2024

Entering 2024, Vietnam is undergoing a vibrant and challenging period of development in the employment sector. With a rapidly growing economy and increasingly active participation in the global economy, understanding Employment in Vietnam  is becoming more crucial than ever. As a comprehensive overview of opportunities and challenges, this article will delve deeper into the employment in Vietnam and the factors driving its development.

Businesses need to understand the employment in Vietnam thoroughly

Overview of Employment in Vietnam

Vietnam is one of the rapidly developing economies in the Southeast Asian region and is experiencing a period full of challenges and opportunities in the labor market. With a population nearing the 100 million mark and a labor force participation rate reaching 76% (updated 2023), employment in Vietnam is witnessing diversity and strong momentum from the young workforce. Vietnam is going through a demographic golden period, with about two-thirds of the population in the working-age group (14-60 years old). However, the significant increase in the elderly population raises questions about the stability and sustainability of the labor force in the future.

Previously, the labor force in Vietnam was mainly concentrated in sectors such as agriculture and services, along with a small number in the industrial sector. This is changing due to digitization and the development of industries, which are the main drivers of Vietnam's economic growth. However, challenges remain in finding skilled labor and balancing employment between urban and rural areas.

The government needs to address and overcome these challenges by improving the education and training system, creating new job opportunities for workers, and attracting and retaining highly skilled labor. Social welfare policies and labor laws are also gradually being adjusted to ensure the rights and reasonable working conditions for workers. Shaping and promoting the sustainable development of the labor market will play a crucial role in shaping the future of the country and its people in Vietnam.

Employment in Vietnam presents both challenges and opportunities amidst its rapid economic development

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Economic Market Indicators in 2024

Here are some key indicators of the economic situation in Vietnam in the first half of 2024. These indicators will help businesses gain a better understanding of Vietnam's current economic situation and formulate appropriate development strategies.

GDP Growth

In the first quarter of 2024, Vietnam's GDP showed promising growth, with an estimated increase of 5.66% compared to the same period last year. This growth was primarily driven by the service sector, contributing 52.23%, followed by the industrial and construction sector at 41.68%, and agriculture, forestry, and fisheries at 6.09%.

Industrial Production

Industrial production witnessed significant growth, with the value-added across all sectors increasing by 6.18% in the first quarter of 2024. Particularly, the manufacturing sector saw a robust growth rate of 6.98%, indicating its significant contribution to the overall economic growth.

Business Activities

Despite fluctuations, the business landscape in Vietnam saw notable trends in the first quarter of 2024. While the number of newly established enterprises surged by 64.3%, reaching approximately 14.1 thousand, there was a considerable decline in the number of businesses resuming operations, indicating a more cautious approach. Additionally, the number of enterprises temporarily suspending business decreased by 19.6%, reflecting efforts towards operational stability.

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Service Sector

The service sector demonstrated resilience and growth during this period. Retail sales of goods and consumer service revenue surged by 8.2% compared to the previous year, reaching 1,537.6 trillion VND. Notably, transportation services and telecommunications activities experienced notable growth rates, further contributing to the sector's performance.

Investment

Investment activities remained robust in the first quarter of 2024, with the total social investment reaching 613.9 trillion VND, reflecting a 5.2% increase from the previous year. Foreign direct investment (FDI) into Vietnam also showed a positive trend, reaching nearly 6.17 billion USD, indicating sustained confidence from international investors.

The Vietnamese economy has experienced positive changes during the period from 2023 to 2024

Labor Force Statistics

The workforce is a crucial component of a developing economy, playing a decisive role in the growth and stability of a nation. Despite some positive advancements, Labor Force Statistics in Vietnam still face numerous challenges that require robust and sustainable development strategies for the future.

Labor Force participation rate over 15 years old

In Q1/2024, Vietnam's labor force (aged 15 and above) reached approximately 52.4 million people, slightly decreasing compared to the previous quarter but increasing by 175.8 thousand people compared to the same period last year. Although the labor force participation rate decreased slightly to 68.5%, it still remained high. Specifically:

• The labor force participation rate for males was 74.7%, higher than females at 62.6%.

• Urban areas had a participation rate of 66.1%, 3.9 percentage points lower than rural areas.

• The age groups of 15-24 years old and 55 years old and above showed the largest disparity between urban and rural areas.

Rate of Labor Force with and without qualifications

As of Q1/2024, the rate of labor force with vocational qualifications had increased to 27.8%, up by 0.2 percentage points compared to the previous quarter and 1.4 percentage points compared to the same period last year. There were a total of 37.8 million workers without vocational training. This poses a significant challenge in improving the vocational skills of the labor force.

Unemployment rate within the labor force age group

Although the unemployment rate decreased compared to the previous quarter, it still increased compared to the same period last year, reaching 2.24%. The unemployment rate among youth (15-24 years old) showed signs of increase, especially in rural areas. Meanwhile, the job shortage rate in the labor force age group increased compared to the previous quarter and the same period last year, especially after the Tet holiday.

Employment situation

The employment landscape in Vietnam is characterized by dynamism and positive development, with fluctuations observed across various sectors.

Popular Industries

In the first quarter of 2024, the industrial sector in Vietnam experienced positive developments, especially in some sectors considered 'hot' and attracting the attention of investors and laborers. According to the Ministry of Labor - Invalids and Social Affairs, notable growth was observed in certain industries:

• Food processing industry: Increased by 1.8% compared to the previous quarter, particularly notable given the stable demand for food consumption.

• Electrical equipment manufacturing, leather production, and related products: Increased by 1.6% compared to the previous quarter, indicating the recovery of the manufacturing industry.

Recruitment sources in Hanoi are relatively large and diverse across many sectors and fields, primarily focusing on commerce, services, manufacturing, textile, footwear, information technology, e-commerce, finance, banking, and insurance. In Ho Chi Minh City, labor in key sectors predominantly falls within the commerce-service and industrial-construction sectors.

Labor primarily in Ho Chi Minh city focuses on commerce-service and industrial-construction sectors.

Trends in Informal Employment

The trend of non-traditional employment, commonly known as freelancing, is increasingly becoming a popular choice among the workforce. According to a survey conducted by a comprehensive talent brand and community-powered workforce solutions company in Vietnam, as of early 2022, up to 53% of knowledge-based labor force participates in the sharing economy, including freelancing. This includes 14% full-time freelancers, 26% part-time freelancers and 13% engaging in both.

Freelancing offers high flexibility in terms of work hours and locations. Although freelancing jobs may not offer stability, they provide significant opportunities for increased income. Freelancers can engage in various fields, including writing, graphic design, programming, marketing, translation, and many others. This provides ample opportunities for individuals to pursue their passions and talents.

However, freelancing also comes with its drawbacks, such as job instability, fierce competition and the need for high self-management skills. Additionally, freelancers need to take care of their own insurance and social welfare as they do not have a company providing these benefits.

Freelancing is becoming a trend among young workers in Vietnam

Impact of COVID-19 pandemic on industries

COVID-19 pandemic has brought about significant disruptions and challenges to the employment in Vietnam, but it has also created opportunities for innovation and development in the future. Initially, it caused a downturn and significant job losses as many businesses had to temporarily halt operations or reduce production scales. However, subsequently, due to flexible and effective pandemic prevention measures along with the implementation of economic stimulus packages, employment in Vietnam began to recover.

• Some industries such as hospitality and food services, tourism and entertainment, real estate, transportation, and logistics continued to face challenges due to the prolonged effects of the pandemic. However, industries such as manufacturing, agriculture, and online services such as education and information technology experienced rapid recovery.

• For workers, the pandemic has led to an increase in unemployment rates, especially among temporary workers or those employed in sectors that were closed or restricted. Many workers have also transitioned from permanent jobs to freelancing to earn income during this challenging period.

The Vietnamese economy has recovered rapidly after the COVID-19 pandemic

Average income of workers

Vietnam's employment costs are lower compared to many developed countries, making it an attractive destination for businesses seeking cost-effective labor. However, as Vietnam's economy develops and competition for skilled workers increases, labor costs are gradually rising.

• Income disparity between Urban and Rural areas: The disparity in income between urban and rural regions remains stark. Urban workers earn an average monthly income of 9.6 million VND, whereas rural workers lag behind at 7.6 million VND. This glaring gap presents an ongoing obstacle to achieving balanced and sustainable labor market growth.

• Technical skills and training: While 27.8% of the workforce hold degrees or vocational certificates, a concerning 37.8 million workers lack formal training. This underscores the pressing need to invest in enhancing technical skills and providing training opportunities to bolster productivity and income levels across the board.

• Dominance of the service sector: The service industry commands the largest share of employment at 40.0%. However, despite its prominence, workers in this sector earn a modest average monthly income of 7.3 million VND. In contrast, the industrial and construction sectors offer significantly higher average incomes, standing at 8.4 million VND. This disparity highlights the income variation across different economic sectors.

Income inequality across regions, sectors, and skills gaps persist in Vietnam

Labor Market Policies in Vietnam

Labor market policies in Vietnam encompass various aspects aimed at protecting and supporting workers.

Social Insurance and Unemployment Insurance

These policies include Social Insurance and Unemployment Insurance. Social Insurance entitlements comprise sick leave, maternity benefits, occupational accident coverage, retirement benefits and survivor benefits. Additionally, workers have the right to withdraw Social Insurance contributions once if they choose not to continue paying premiums. Regarding Unemployment Insurance, workers are entitled to benefits when unemployed, provided with job-seeking assistance, and participate in vocational training programs. These policies aim to safeguard and assist workers in challenging situations, ensuring they maintain stable livelihoods.

Skills training programs

The training policies for labor in Vietnam ensure that officials and employees receive adequate training to fulfill their duties effectively and are provided with necessary equipment and working conditions. Workers have the right to choose their jobs, workplace, and profession freely without discrimination or harassment. They also receive appropriate wages based on their skills and enjoy labor protection, safety, and hygiene conditions, along with various leave and collective welfare benefits.

Labor Export Contract

Vietnamese laborers going abroad under contract have the following rights:

• Provided with information about the laws and policies of both Vietnam and the receiving country.

• Advised and assisted in exercising their rights and obligations under the labor contract.

• Entitled to benefits such as salary, healthcare, social insurance, and other contract-related provisions.

• Protected and defended legally during their time working abroad.

• Able to terminate the contract if facing mistreatment, forced labor, or direct threats to life, health, or sexual harassment.

• Eligible for support policies from the Overseas Employment Support Fund as per legal regulations.

• Exempted from double social insurance or personal income tax in both Vietnam and the receiving country if corresponding agreements exist.

• Have the right to file complaints, reports, or lawsuits for legal violations in the labor field.

• Provided with counseling and assistance upon returning to Vietnam, including job creation or entrepreneurship, and voluntary access to social-psychological counseling services.

>>> See more: Vietnam Labour Law

Vietnamese migrant workers have rights to legal protection, financial benefits and support services

General forecast for the Vietnam employment next year

Employment in Vietnam is expected to be dynamic, with an average of 310,000 - 330,000 new jobs annually from 2022 to 2025, mainly in trained labor sectors. Trends point towards the rise of IT, artificial intelligence, healthcare, renewable energy, education, business management, and arts/entertainment industries. The workforce is projected to reach 43 million by 2025, with potential growth opportunities due to ASEAN integration and increased job creation. However, challenges like unemployment and labor shortages persist, prompting the need for strategic workforce planning and skill development initiatives.

Aniday - Employment solution Vietnam

In the context of Vietnam's rapidly developing and competitive job market, companies are increasingly seeking effective solutions to attract and recruit talent. Headhunter agencies like Aniday play a crucial role in providing a platform to connect job seekers and employers through direct chat systems. This helps reduce the distance and time between submitting resumes and being invited for interviews, thereby increasing opportunities for candidates and alleviating the recruitment burden for businesses.

In the future, with the development of technology and intensifying competition in talent acquisition, Aniday is forecasted to play an increasingly important role in optimizing the recruitment process and helping businesses access quality candidates quickly and efficiently. Additionally, Aniday may also contribute to creating a professional work environment and attracting talent to businesses, thereby contributing to the sustainable development of the economy.

Aniday is in the top 10 headhunters in Vietnam

In conclusion, understanding employment in Vietnam is crucial for businesses to thrive amidst its dynamic growth. Aniday's efficient headhunting solutions offer a bridge between employers and job seekers, promising a bright future for talent acquisition in Vietnam. Embrace innovation with Aniday to unlock the full potential of the country's workforce. Partner with us today for optimized recruitment and sustained success!

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