Gen Z's labor aversion worsens industry workforce crisis

Oasis Garment Co. Ltd, a Korean-owned jackets and coats producer in Ho Chi Minh City, has received many new orders since the Lunar New Year ended in February.

The company now needs to recruit more staff to manage its orders. Candidates require English communication skills to work directly with foreigners. But the firm is hiring inexperienced new graduates, with a starting salary of VND13-14 million (US$511-550) per month, due to lack of better applicants.

The company is trying to reach out by offering more benefits to new employees, including shuttle services to the factory from the city center, and dormitories on the outskirts near the facility.

Oasis has posted recruitment adds on job websites and social networks in several southern provinces, but the company is in trouble to recruit new effective employees.

According to a representative from the company, the situation has persisted for several years.

It's been challenging to find new staff from the available workforce-ready Generation Z market – people born from late 1990s to early 2010s.

Knowing that Gen Z differs from previous generations, the factory has introduced many welfare programs, relaxed dress codes, and made clear promotion paths for two years, but it still lacks appropriate candidates in the age group.

"Manufacturing plants are in dire need of young staff to supplement and replace retiring workers," the representative said.

Thanh Nguyen, CEO of HCMC-based recruitment firm Anphabe, said: "It’s not that manufacturing firms are having issues, the problem here is that GenZ is not interested in this industry."

A job preference survey conducted by Anphabe of more than 14,000 members of Gen Z, colloquially known as Zoomers, late last year revealed their favorite industries are food and hospitality, financial services, and retail, wholesale and commerce.

Labor, industry and factory list were low priorities.

"Industrial production falls out of the top 10 favorite industries and careers chosen by Gen Z," said Thanh.

Bui Van Duy, who has managed human resources for a private multi-industry group in HCMC for 15 years, believes there are many reasons why the industrial manufacturing sector and Gen Z are not finding common ground.

He said factory employees, even office staff, must adhere to strict working hours and shifts. They must uphold the principles and discipline of assembly line work, where there is not the leeway they desire.

Most factories work on Saturdays, and urgent orders require overtime to meet schedules.

"Weighing against commercial services, the manufacturing sector is entirely at a disadvantage because Gen Z prefers more flexible working hours," Duy said.

Duy believes the industrial manufacturing sector must innovate to increase productivity and consistently develop competitive pricing. Therefore, business owners want stable personnel for development. However, young workers' loyalty to companies, he said, "is too low."

Factories operate in shifts, adhere to strict regulations, and offer stable salaries that gradually increase over the years. But the pay simply does not compete with what the services sectors offer.

Moreover, working in the service sector is more appealing thanks to its "glamorous" appearance, which makes it even more difficult for manufacturing to attract young labor.

Duy’s observations coincide with the Anphabe survey, where over 70% of Gen Z respondents said they prioritize a "work-life balance," and desire comfortable and interesting jobs with friendly colleagues.

Most importantly, their top goal is income sufficient for both a high quality of life and saving amid rising inflation. However, Gen Z's average tenure with an employer is only 2.2 years, the survey found.

Nguyen Duc Loc, head of the Social Life Research Institute, believes the contradictions between the industrial manufacturing sector and Gen Z's needs and desires are backing factories into a corner unprecedented with previous generations.

Citing a report from the General Statistics Office, Loc said the number of Gen Z in the working age group (from 15 to 24 years old) in 2019 was about 13 million people. By 2025, this generation will contribute 1/3 of the workforce in Vietnam. Gen Z will thus significantly impact the domestic labor market and gradually replace the current workforce.

Meanwhile, the industrial and construction sector still plays a key in Vietnam's economy as a whole.

The government aims for the industrial and construction sector to account for 43-44% of national economic growth by 2025, and 40-41% by 2035. The value of high-tech industrial products and high-tech applications is expected to reach about 45% of total GDP by 2025, and over 50% after 2025.

"There needs to be a training and career orientation strategies to attract young labor to the industrial manufacturing sector. This can contribute to ensuring economic goals are achieved," Loc said.

But Anphabe CEO Thanh Nguyen noted that Gen Z's characteristics have already been formed, especially in their valuing of flexibility, personal needs, progressive spirit, and open-mindedness.

Therefore, instead of trying to change Gen Z, manufacturing plants should "loosen" regulations and increase benefits to compensate for its rigid standards that cannot be changed, she argued.

Nguyen suggested that factories could still operate in shifts and assembly lines while also offering jobs that can be done remotely, not requiring exact arrival times, or being present at the company for required amounts of time. Managers only need to set new job requirements and ensure tasks get completed, she advised.

As stated above, manufacturing plants often provide shuttle services and dormitories, which are suitable for young workers who do not have homes in the city. Therefore, HR should target this group, according to Nguyen.

"To find people, especially talented ones, employers must make an effort because Gen Z are not strangers; they are the children of previous generations...[they are] gradually being shaped," she said.