Hanoi And The Labor Shortage Conundrum

Hanoi – a bustling market post-pandemic

As the pandemic shows signs of restraint, and the economy begins to restabilize and revitalize, Hanoi becomes one of the favorite investment destinations of many foreign businesses, attracting 703 million USD in FDI in the first 5 months of 2022. During the same 5 months, the city also witnessed a 6% increase in the number of newly registered businesses compared to the same period last year, reaching 11,500 businesses.

There are two main reasons causing the workforce problem in Hanoi. Firstly, there is a shortage of skilled workers since they tend to move to a different company that provides better salaries and benefits after being trained. The second problem lies within the recruitment of senior-level workers in managing positions. The challenge for HR managers in Hanoi is to compete with the Ho Chi Minh market. With a minimum wage 38% higher than the national minimum and progressive benefits, Ho Chi Minh attracts many more senior-level workers across the country.

Solving the labor shortage conundrum

Businesses in Hanoi are expanding their recruitment pool to nearby cities to tackle the shortage. However, implementing mass recruitment can lead to some inadequacies such as a long recruitment process, difficulty to check the candidate’s background, or regional cultural differences leading to poor performance, etc.

Ms. Nguyen Thi Thanh Huong, Deputy CEO of Talentnet shared: “With the efforts of the government and FDI resources, the Hanoi market is showing positive signs. However, to effectively take on the root problem of recruiting and retaining talent, Hanoi businesses must focus more on building engaging benefits, gaining competitive advantages to attract talents from other markets.”

Also, Ms. Thanh Huong suggested four strategic and long-term initiatives to avoid the “talent drain” as follows:

Changing the working mindset: Progressive businesses are trying to improve and create a better way to organize tasks. Starting by changing the mindsets, from having a skillful individual deal with one specific task to providing more skills for one individual thereby increasing productivity. With this mindset, businesses can attract progressive employees, and at the same time expand a pool with diverse skills employees.

Investing and focusing on business and employee needs: Restructure and be more flexible, invest in new technology, improve the overall health of employees, or build a human-centered culture should be taken into consideration. This will create a competitive edge for Hanoi businesses to attract and retain talents, as well as avoid the “talent drain”.

Building an agile and flexible structure: Transform your business structure from a ‘machine-like’ with top-down directive leadership to a team that shares the same responsibility for the whole project. The manager’s job now is to provide direction and facilitate enforcement only.

Prepare for unexpected variables: Going through the pandemic with many new technologies and unexpected matters such as AI, Blockchain, climate change, etc and many more are yet to come. Being prepared for any scenario not only helps to reassure employees but also helps businesses prepare sustainable human capital initials.

Source: Nhịp Cầu Đầu Tư