Rapid retail growth leaves employers scrambling to find staff in Vietnam

By Ngan Anh   October 28, 2017 | 08:29 pm PT
Rapid retail growth leaves employers scrambling to find staff in Vietnam
Amid the retail boom in Vietnam, the human resource has not met demand of industry expansion. Photo by VnExpress
Low salaries and more attractive opportunities have left the booming retail sector in an employment crisis.

At a recent job fair in Hanoi, Le Thu Trang spent several hours intently searching - not for a job, but for staff.

Trang, who's head of human resources for a Thai-invested snack distributor and retailer in Hanoi, had 20 openings for salespeople that she hoped to fill at the event. However, she acknowledged: “There is a plenty of competition for workers in the retail sector [at the moment]."

With Vietnam's retail boom in full swing, there simply aren't enough to meet the demands of industry expansion, and the problem has worsened in recent years, Trang said.

In the second quarter of 2017, the consumer goods and retail sector, especially the apparel, food and beverage categories, came second in terms of recruitment demand with 17 percent of the total.

“Companies are fighting hard to attract and retain employees. Small retailers like us never have enough workers,” she added.

Low wages in the local retail sector may also make it harder to fill positions, said industry insiders.

In addition, the rise of the gig economy and alternative jobs such as driving for Uber or Grab is shrinking the youth talent pool.

In their online recruitment adverts, retailers, including clothing, sports goods and department stores, often offer a monthly wage for entry-level sales personnel of $200-300. Meanwhile, many Uber and Grab drivers said they can earn $400-600 per month.

According to a recent survey on the retail sector by recruitment firm Navigos Search, 22 percent of respondents said they had quit retail enterprises because of salary and promotion problems.

Trinh Lan Phuong, CEO of Bibo Mart, a chain of shops that supplies products for mothers and babies, said finding and keeping qualified staff is one of their biggest business challenges. College graduates want office jobs with high incomes, not PR or sales positions in the retail sector.

Meanwhile, there are no schools in Vietnam that focus on training personnel for the sector, she added.

Echoing Phuong, CEO of retailer Tiki Tran Ngoc Thai Son said that big retailers like Lazada and Tiki are also finding it hard to recruit employees.

“The number of staff has not kept pace with growth,” he said. “Retailers can solve difficulties related to technology and management, but not for staff recruitment.”

It is forecast that in the next four years the number of supermarkets will nearly double to 1,300 and shopping malls to 300. Photo by Reuters/Kham

In the next four years the number of supermarkets will nearly double to 1,300 and shopping malls to 300 in Vietnam. Photo by Reuters/Kham

Rosy picture for retail job seekers likely to dim?

And it's not simply problems attracting new workers; holding on to existing staff is proving to be an issue too.

According to the Navigos Group survey, 28 percent of employers said a lack of commitment and high turn-over of staff are their biggest challenges, while 49 percent of employers said that candidates are easily lured by other companies in the same sector. This sentiment was shared by employees, with 60 percent saying they stayed in the same job for an average of just 2-3 years.

As one way of addressing the labor shortage, employers are becoming more proactive in their hunt for workers by attending job fairs, posting positions on social media and hiring recruitment firms.

Barriers are cleared and suitable applicants are offered jobs on the spot at job fairs. Nguyen Thu Ha, 28, received a job as a promotion girl at supermarket chain SunMart in Hanoi just like that.

Ha said it has not been difficult for her to find a job. “I came to Hanoi from Nam Dinh. I arrived on a Monday and got the job by Wednesday.”

“We are in a job-seeker’s retail market,” said an industry insider. “Job seekers are finding it easier to secure employment, and employers are in a position of needing to compete with other employers for qualified candidates.”

There is the question of whether this rosy picture for retail job seekers will dim. Some industry insiders said it would probably be a long time coming because of the expected high growth in retail sector and unchanged personnel sources.

Official statistics show Vietnam now has about 9,000 traditional markets, 800 supermarkets, 160 department stores and shopping malls, and more than a million family-run retail shops.

It is forecast that in the next four years the number of supermarkets will nearly double to 1,300 and shopping malls to 300, according to the government’s development plan for the retail sector.

While waiting for better staff to come along, Trang’s company has realized that it needs to offer something extra, she said.

Spending at supermarkets, convenience stores and shopping malls is expected to rise to 45 percent of total consumer spending by 2020, up from 25 percent now, according to the Vietnam Retail Association.

Vietnam’s retail sales rose 10.5 percent to around $99.3 billion in the first nine months of this year, latest data from the General Statistics Office showed.

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