Bridging the skills gap in high-demand sectors to lure more foreign investment to Vietnam: RMIT expert

By Divya Juneja
Wed, March 6, 2024 | 8:06 am GMT+7

Collective efforts are required to fill the skills gap in human resources, thereby attracting more foreign investors in future, writes Dr. Divya Juneja, RMIT lecturer in human resource management. Photo courtesy of RMIT.

Dr. Divya Juneja, RMIT lecturer in human resource management. Photo courtesy of RMIT.

Dr. Divya Juneja, RMIT lecturer in human resource management. Photo courtesy of RMIT.

Over the past few years, Vietnam's economy has grown significantly. The GDP of Vietnam is expected to rise from $304.47 billion in 2018 to an estimated $657.28 billion in 2028. Vietnam's youthful, abundant labour population and global connectivity have helped it remain a top destination for foreign direct investment (FDI).  

Dr. Santiago Velasquez, MBA associate program manager at RMIT University Vietnam, said FDI companies are interested in risk minimization. Therefore, they welcome skills which can provide stakeholder relief in productivity enhancement, transparency, and financial security.

High-quality human resources will help Vietnam draw more FDI. Photo courtesy of the government's news portal.

High-quality human resources will help Vietnam draw more FDI. Photo courtesy of the government's news portal.

Nguyen Bich Hong, general director at HR2B, said that it is important that the labour workforce has appropriate skill sets to attract FDIs. The more investors can be assured that the workforce is fully equipped with skill sets aligned with business strategies, the more confident they feel about investing in Vietnam.

Dr. Jung Woo Han, senior program manager for human resource management and entrepreneurship at RMIT University, said that the world of work is changing rapidly. Owing to the disruption caused by technology, companies must create comprehensive and effective workforce strategies. That will be extremely critical in this digital age.

However, the major issues that most employers are facing are related to the skills available in the Vietnamese market.  

The analytical and digital skills of Vietnamese have improved over time. Still, 61% of the companies believe that they are unable to find the right skilled people at the right time, according to a Talentnet survey. There are very few ready-to-hire candidates available in the country. According to the survey, organizations prioritize employing highly skilled staff when rebuilding their workforce following change programs. However, it is astounding to observe how tough it is for businesses to find skilled professionals.

“Outsourcing has been the main option to fill the skilled worker requirements. It is effective, but also costly and offers a slow learning curve for Vietnamese employees,” said Dr. Velasquez.

Tran Thu Thao, talent acquisition and training executive at Navigos Group, said that basing on Navigos Group's 2024 Salary and Labor Market Report, new jobs in the future are inclined towards technology, artificial intelligence, and digital transformation. Therefore, occupational groups related to information technology, engineering, and computer science will continue to have a shortage of human resources in the future, especially high-quality human resources.

The hospitality and tourism industry is also facing the biggest challenge in hiring skilled workers. One of the reasons is the decline in students' registration in the tourism course. This trend was observed before the pandemic, however, still students are not attracted to the tourism industry in Vietnam. People from other industries are recruited to fulfill the demands, but the skills gap remains. It needs highly skilled people at all levels to satisfy customer expectations and serve them better.

Manufacturing and healthcare are the other industries that are facing a skills shortage. One of the primary causes of this skill disparity is that Vietnamese education continues to experience difficulties keeping up with the demands of the modern global economy.

The growing demand for foreign languages is another challenge. Still a small portion of the Vietnamese workforce is fluent in English language.

According to Nguyen Hoang Phuong, head of AIMS International Vietnam, as the country is attracting plenty visitors and businesses from other parts of East Asia, the market needs not only people who are fluent in English but those in other languages like Japanese, Chinese and South Korean.

The nation's population is in its “golden age” with a median age of 32.5 years, which is especially appealing to FDI because of its young and vibrant labour force. However, it is crucial to invest in workforce development initiatives, education programs, and vocational training to bridge the skills gap.  

Initiatives for upskilling and reskilling people in digital skills, programming languages, cyber security, and artificial intelligence offer chances for individuals to improve their employability and make a difference in these growing sectors.

Dr. Jung Woo Han said that applied and authentic training such as project-based and work-integrated learning are essential in the era of AI and advanced robotic technologies. Especially as it can help students shape people skills such as communication and resilience, which could be the most essential skills in future job markets impacted by technology disruptions.

Once that gap is closed, the private sector will have easy access to experts and highly talented human resources in a cost competitive form. Also, educational institutions will have more options for funding and maintaining their researchers and lecturers’ awareness of real-world challenges. By working together, these organizations may precisely identify the competencies that various sectors need, ensuring their training programs meet the demands of the labour market.

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