Vietnamese workforce has much to do to prep for AEC

While hopes are high that the coming ASEAN Economic Community (AEC) will bring opportunities to Vietnamese labour, the country's workforce still has a lot of work to do to take advantage of them.

The AEC, which is expected to create 14 million new jobs in the region, would allow the free flow of skilled labours in eight occupations - including architects, engineers, surveyors, medical doctors, dentists, nurses, accountants and tourism professionals.

A recent survey suggests Vietnamese workers may overestimate their own skills.

Photo for illustration: thaiprint.org

Recruitment firm Vietnam Works surveyed 2,500 professionals from companies of all sizes across the country and found that up to 92 percent see the establishment of the AEC as a good opportunity to develop their careers. About 70 percent think Vietnamese professionals have enough skills to compete with foreign counterparts.

Phu Huynh, a labour economist from the Bangkok-based office of the International Labour Organisation (ILO), said Vietnam's perception of its workforce skills had some basis in reality.

"Vietnam's workforce is very dynamic. The country's workers are eager to pursue new job opportunities. They have a very sound basic education, strong literacy and accounting skills," Huynh said.

However, Vietnam faces stiff competition from regional neighbours who may possess better language, technology and professional skills.

In 2014, Vietnam has about 5 million workers, just 10 percent of the country's workforce, who were rated as high-quality manpower, or those who can work directly at positions that can generate the creation, development, dissemination and application of knowledge.

And a report done by the ILO last year revealed Vietnam's productivity was 11 times lower than that of the Republic of Korea, 12 times lower than Japan's, and 18 times lower than in Singapore, the study says.

According to the World Bank, the gross enrollment rate in high school in Vietnam in 2010 was 65 percent while in the Republic of Korea it was 95 percent.

While it's true that free trade provides new prospects for qualified Vietnamese, there might be challenges along with it for those who are not competitive enough.

"Qualified workers can obviously pursue better job opportunities abroad, but there's also a high chance foreign workers would take domestic jobs that require high added-value," said Phung Quang Huy, Director of the Employers' Bureau of the Vietnam Chamber of Commerce and Industry.

Huy's statement is actually not just a prediction of the future, but is taking place now. According to statistics from the General Administration of Tourism, there are some 5,000 hotels ranking from three to five stars in the country, but most of the biggest ones have to hire foreigners for management positions.

"I'm more than willing to hire Vietnamese to work for my company, but for certain management positions in my hotels, I still have to hire foreigners, who have proven to be better at the jobs," said Le Hong Hai, General Director of Dan Chu Tourism and Commercial Jointstock Company.

Nguyen Van Anh, Managing Director of Navigos Search Vietnam, a provider of executive search and management consultancy services, said in 2014 that her company wasn't able to recruit the required number of high qualified engineers and managers for projects by Microsoft Vietnam and Samsung Vietnam.

Nguyen Thuong Lang, a professor at the National Economics University, said there were certain disadvantages in Vietnamese labour that could hinder their readiness for the establishment of the AEC.

Apart from low productivity as stated in the ILO's report, the quality of the Vietnamese workforce was also a weakness, Lang said. The portion of workers who can operate machines or has a good background in technology accounted for only 30 percent of the country's workforce.

"The shortage of necessary skills for Vietnamese workers is much more serious than those from other ASEAN countries," he said.

The ILO's Phu Huynh said the challenges for Vietnam's labour market were real.

A majority of jobs in the country were of poor quality with low earnings and productivity, he said, adding that one in two workers were still employed in agriculture and approximately four in five workers had limited technical qualifications.

"Other huge disadvantages for Vietnamese labourers are being unable to use foreign languages and a lack of discipline," Lang from the NEU said.

"Preparation in terms of languages and workmanship for the AEC among Vietnamese workers are still modest," Lang said.

Tao Bang Huy, Deputy Head of the Employment Department of the Ministry of Labour, Invalids and Social Affairs (MOLISA), said without proper preparations, it's quite possible that Vietnam would miss the opportunities offered by the AEC.

The Ministry of Education and Training was assigned to work with MOLISA to draft a project on the national framework for occupational skills, but hasn't finished it. It is not known when certificates for the eight occupations will be issued.

Meanwhile, preparations by the country's labourers themselves seem not to be any better.

Huy from MOLISA, said whether the AEC brings chances or challenges, it would depend on one's capacity.

"You will have to be able to speak fluent English, to have proper skills including team work and communication if you want to be competitive in the labour market," he said.

"In order not to lose jobs to foreign labours, domestic workers need to equip themselves with what they are lacking right now."

"Besides, it's of crucial importance that we conduct reforms with our education and training programs - which are now only content-based. It should be re-designed to focus on the learner's ability," Huy said, adding that the education curricula should be designed basing on the labour market's demand.

"There should be more time in the programs to train working skills for learners," he said.

While Vietnam boasts its advantage in cheap labour, the risk for an economy depending on cheap labour is high. Cheap labour and manual labour means low quality and a lack of creativity. With such characteristics, Vietnam would not be an attractive destination for projects with high technologies or large scale.

Whether Vietnamese labourers could benefit from the coming AEC, or lose out, they've got to find their own answers about what to do now.