Salaries at foreign firms 31% higher than Vietnamese peers

The average basic salaries at multinational corporations (MNCs) in Vietnam is 31% higher than those of domestic companies, according to HR consulting firms Talentnet and Mercer.

According to the duo's Total Remuneration Survey (TRS) 2022, which collected feedback from 483,000 employees in 3,300 job positions from over 600 organizations, the gaps are 18%, 29%, and 36% for job positions of para-professional, professional, and management, respectively.

However, the difference in total incomes is only 22%. The survey clarified that Vietnamese firms focus more on sales incentive schemes or performance bonuses.

The survey added that for the first time, graduates from Vietnamese universities enjoy the same starting wages as foreign universities, at VND10.6 million ($442 per month).

In line with the country’s post-pandemic economic recovery, only 2% of firms plan to streamline their workforce, while 45% reported they would hire more staff. Besides, 35% will neither hire nor dismiss personnel, and 18% have yet to decide on the issue.

The report showed that the turnover rates were 11.9% for local firms and 8% for MNCs, indicating that Vietnam still experience “The Great Resignation”. The sectors with the highest turnover rates among MNCs are retail with 15.6%, real estate 12.7%, and various manufacturing 10.1%, due to the impacts of the pandemic, low pay, and the diversified workforce.

The lowest rates are for industries of oil and mining, renewable energy, and chemicals, which are more invulnerable to the pandemic and offer competitive payments for high demand on expertise.

The report also pointed out salary growth moves in tandem with economic growth. The GDP growth was between 6.2% and 7% in 2016-2019, then dropped to 2.9% and 2.6% in the next two years and is expected to rebound to 6% in 2022 and 7.2% in 2023.

The salary growth was high between 8% and 8.8% in 2016-2019, fell to 6.5%-7.2% in the next two years, and is expected to recover to 6.8%-7.1% in 2022 and 2023.

Vietnam's unemployment rate dropped 1.7 percentage points year-on-year to 2.28% in the third quarter, the lowest since 2020, according to the General Statistics Office.