Job market reflects cautious sentiment among businesses in 2024

Employers in Vietnam remain cautious about hiring new staff in 2024, with about one-third of companies surveyed saying they will maintain their current employee numbers, write Adecco analysts in their newly-released Vietnam salary guide 2024.

Promising opportunities for investment, exports, and consumption

During 2023, global economic unrest led to a decrease in demand worldwide, coupled with a significant rise in production and business costs. In particular, Vietnam witnessed a significant impact due to the downturns experienced in the real estate market and corporate bonds.

Domestically, these sectors faced challenges, leading to reduced capital absorption by businesses and escalating bad debts, among other difficulties. Within the first 10 months, the country witnessed the establishment and return to operation of 183,600 businesses, marking a 2.9% increase compared to the same period the previous year.

However, the number of businesses withdrawing from the market rose 20%, reaching 146,600. Themes of business dissolution, workforce reduction, and cautious recruitment continue to dominate headlines.

Despite these challenges, Vietnam’s economy is on a positive trajectory, supported by a series of measures taken by the government. According to an assessment from the Ministry of Planning and Investment, all three drivers - investment, exports, and consumption - have promising growth opportunities in 2024.

Exports, in particular, gradually started gaining momentum in late 2023. Retail and consumption are approaching double-digit growth, and the investment sector has shown favourable opportunities in state investment, FDI, and private investment, especially in emerging areas like renewable energy and semiconductors.

37% of businesses plan to maintain workforce size in 2024

Looking ahead at 2024, the job market reflects a cautious sentiment among businesses. Adecco Vietnam’s survey reveals that 74% of businesses expect limited to modest growth in 2024.

Additionally, 37% plan to maintain their workforce size, while 35% intend to increase their headcount by less than 25%. The technology, retail, wholesale, consumer goods, and education sectors have plans to increase recruitment.

Conversely, 18% plan to cut their workforce, an 8% increase compared to the previous year, primarily in the manufacturing and property sectors. This is a focal point highlighting the ongoing challenges in the recruitment market expected for the upcoming year.

In this ever-changing period, the top priority for recruiters is seeking candidates with change management and leadership skills (chosen by 47% of surveyed employers). Technological and digital skills are also highly valued.

From the perspective of employees, the unpredictable job market has increased caution in searching for new opportunities. According to the survey, 29% have no intention of changing jobs, while 36% are open to new opportunities but not actively seeking new employment in the next 12 months.

While analyzing the top factors contributing to movement of talent across the APAC region, compensation and benefits also emerged as the most significant factor, with a total of 67% choosing it as their primary consideration when moving roles. In comparison with other countries and territories within the region, Vietnam, at 57%, lags behind locations that are relatively more expensive, such as Hong Kong with 88%, Singapore (82%), and South Korea (78%).

Consequently, salary expectations across APAC are high. In reality, Vietnam leads with 23% of respondents, followed by India at 21%, receiving a salary increase of over 20% in their current roles. In contrast, when changing employers, a significant 46% in Vietnam and 91% in India expect a base salary increase of over 20%.

Given the high salary expectations, organisations need to rethink their payment strategies in 2024. Aligning employee salaries with market demands will be crucial to attracting and retaining top talent.

The research was carried out in Vietnam and eight other countries in the Asia-Pacific region, with advice from experts for employers and employees.

Established in Vietnam in 2011, Adecco Vietnam, a member of Adecco Group, is a leading payroll, recruitment and outsourcing agency in Vietnam. Adecco Group has over 39,000 employees in over 5,000 branches across 60 countries and territories worldwide.