A new wave of manpower transfer from FIEs to SOEs?

Vietnam is witnessing a large wave of manpower transfers with many key staffers leaving foreign investment enterprises (FIEs) for State owned enterprises (SOEs). However, experts say that Vietnamese companies still face a number of challenges.

The post of managing director of Trang Anh Investment and Trade Company, one of the subsidiaries of Trang An Joint Stock Corporation, has been given to an expert who once worked for Unilever Group. The expert received an invitation to work for Trang An by General Director Trinh Sy personally.

Trang An declined to reveal the information about the cost of the deal, but Sy affirmed that the corporation wants a high quality workforce, as this an important part in maintaining a sustainable development strategy in a fiercely competitive market.

The path that Trang An is taking is also the path pursued by many other enterprises, especially large ones. They are now trying to hunt for high-quality labor, especially among the FIEs.

A recent survey released in June 2010, conducted by TowersWatson on 150 FIEs in Vietnam showed that these enterprises are facing a manpower shortfall, especially among medium and high-class personnel.

According to Jessica Lu from Watson Wyatt Worldwide in Vietnam, the polled FIEs all said that the biggest challenge for them is to retain key personnel. In 2008, the percentage of workers leaving FIEs was 14 percent, while the figure rose to nearly 17 percent in 2009.

However, also according to Jessica Lu, the opposite tendency (those people, who once worked for FIEs, then moved to Vietnamese SOEs, but then later decided to return to FIEs) can also be seen. It seems that SOEs’ have a problem “absorbing” and retaining high-quality labor.

When talking with Dau tu newspaper’s reporter at an annual conference of the top 500 Vietnamese companies, Nguyen Van Long, who will take the post as the Human Resources Director for Gemadept in September, stated that if the operation systems of Vietnamese companies is not standardized, it will be a big challenge to recruit medium and high-quality staff.

“Big Vietnamese companies need a breakthrough in the corporate governance structure, as well as in development strategies of companies,” he said.

However, Long stressed that some key people will not be able to change a whole system. In general, Long believes that the most important thing for Vietnamese enterprises to retain top talent is a comprehensive reform of the corporate governance system.

It is necessary to note that Long is one person who moved from FIEs to a Vietnamese company. According to Long, he wanted the opportunity to receive a promotion in his career, but did not see the possibility with a FIEs.

It is clear that Vietnamese enterprises now have a big opportunity to attract a high-quality workforce. However, the problem now lies in the ability of Vietnamese companies to use this high-quality workforce.

Experts have mentioned many problems in the workforce management of Vietnamese enterprises. Tom Chong, Deputy General Director of Ernst & Young Vietnam, said that many Vietnamese companies are seeking short-term instead of long term-benefits, negatively impacting their labor force strategy.

Tags: Vietnam companies, Vietnam enterprises, Vietnam FIEs, Vietnam SOEs