Downsized laborers not ready to take new jobs

By Le Tuyet   December 7, 2022 | 02:27 am PT
HCMC factories are facing obstacles recruiting workers who have lost their jobs.

Shortly after Taiwanese shoemaker Ty Hung Co. laid off 1,185 workers at its HCMC factory in November due to falling orders, Thuan Phuong Embroideries Garments Co. reached out to those workers and offered them new jobs at its factory.

Thuan Phuong, located in HCMC, was in need of 100 workers, and announced that it would accept applications until February 2022. The company promised to train unskilled workers and offered them a monthly salary of VND7-15 million ($290-625).

Staff from Thuan Phuong visited Ty Hung Co. and the worker dormitory to recruit staff, but the garment firm has yet to receive any applications.

"No one applied for a job," said Bui Van Duy, a human resources officer at Thuan Phuong.

Workers at Ty Hung Co. Ltd in Ho Chi Minh City’s Binh Tan District leave their factory after a working day in November, 2022. Photo by VnExpress/Le Tuyet

Workers at Ty Hung Co. Ltd in Ho Chi Minh City’s Binh Tan District leave their factory after a working day in November, 2022. Photo by VnExpress/Le Tuyet

The district’s Department of Labor, Invalids and Social Affairs then contacted other factories in the area to see if they had a need for workers and to help those that had just lost their jobs.

"Though many of the workers applied, only a few came to take new jobs at companies we have recommended," said Tran Thanh Tho, an official at the department.

Shin Dong Garment Co. said as many as 300 workers applied for jobs, and that most passed the interview, but so far, only nine have come to work. South Korean garment firm Wooyang Vina 2 Co. told the same story, saying that 180 workers showed up for the interview, but that just five agreed to accept a job.

Tho said there are two reasons why workers that have been laid off recently do not want to take new jobs around this time of the year.

First, when losing their jobs at a company, laborers will receive at least three months of severance pay. Second, as it is just more than one month until the Lunar New Year, if workers decide to take a new job now, their Tet bonus for the following year will be negligible and they will have to abide by the Tet holiday schedule as decided by the new employers.

Therefore, most laborers will opt for seasonal jobs at this time of the year and will wait until after the Tet holiday is over to start working again, said Tho.

Bui Van Duy, a human resources officer at Thuan Phuong Embroideries Garments Co.shared the same observation.

Duy said through many interviews he has found that many workers now only want to take seasonal jobs and wait until being unemployed for one year so that they could make the one-time withdrawal of their social insurance.

In Vietnam, workers with labor contracts of at least a year will be subject to compulsory social insurance payments. Their employers will extract their monthly salaries to pay the social insurance.As per existing law, contracted laborers must pay social insurance for 20 years to get a pension when they retire. However, they have the right to withdraw all of it as long as they can prove they have been unemployed for at least one year. Such a withdrawal means they will have nothing left in the future for their retirement pension.

Duy said another reason making it difficult for firms to recruit unemployedworkers is that not many of them are willing to switch to a new skill, which means they have to start from the beginning and be retrained.

For example, he said, those who lost jobs at Ty Hung were trained to make shoes but that it will take an effort for them to learn how to make clothes.

Tran Minh Ngoc, director of job recruitment site vieclamtot, said that the group of workers that has just lost jobs is mainly in the manufacturing sector, while businesses have a demand for those in the retail, trade and service sectors.

The working environment and the skill and experience requirements of those sectors are very different, she said.

According to a report by the HCMC Center of Forecasting Manpower Needs and Labor Market Information, the city has to fill 23,000-25,000 new jobs in December, with the trade and service sector accounting for 68% of the total demand and the industry-construction group accounting for 32%.

Nguyen Duc Loc, director of the Social Life Research Institute, said workers who have been laid off during this period will not want to find new jobs because they want to go home for Tet, the most important holiday and the biggest occasion for family reunions of the Vietnamese people.

He said workers will choose to work seasonally at this time of the year so that they are not required to return to work too soon after the holiday and so can stay in their hometowns as long as they wish.

"Instead of trying to connect those workers with new employers at this stage, the Labor Department needs to focus on finding solutions for next year," he suggested.

After Tet, the unemployment benefits will run out and there will not be many job opportunities in the hometowns of workers, forcing them to return to HCMC and neighboring Dong Nai and Binh Duong provinces, which are all industrial hubs.

By that time, authorities will have to accurately forecast the market and have plans to support workers, said Loc.

He also proposed that the government develop long-term solutions to support the group of workers over the age of 40 as they could no longer compete with the younger workforce and their retirement age was still far away.

"That is the group that really needs help because they can't transform themselves," he said.

Citing the story of South Korea in the 1970s, the social scientist said that at that time, the government had set up a labor fund to support people over the age of 40.

Vietnam can help workers adjust to changing job market conditions by encouraging investment in supporting industries that are suitable to the health conditions, experience, and skills of workers over 40. He said further that the government can use the unemployment insurance fund to provide vocational training to help older workers learn new skills.

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