Update: 08:31 | 18/10/2020
Average wages at multinationals and domestic enterprises in Vietnam respectively rose 6.5 percent and 5.2 percent this year, the lowest levels in a decade.
Over the past 10 years, average salaries in both groups had risen at least 8 percent a year, according to a report by human resources solutions firm Talentnet Vietnam and American human resources consulting firm Mercer.
Workers at a garment factory in Hanoi.
The report surveyed 600 businesses in 16 different industries including technology, consumer goods, pharmaceuticals and manufacturing. Average wages were calculated off the firms’ total salary budget for each year.
According to the report, 14 percent of multinationals surveyed said there will be no increase in employee salaries this year, and 34 percent of domestic firms said the same. Six percent of multinationals and 3 percent of domestic enterprises also said they will continue to implement the same "austere" approach in wage policies next year.
In 2020, the sectors with the highest wage growth have been insurance with 8.7 percent, hi-tech with 8.5 percent, and pharmaceuticals with 8.4 percent. These are sectors least affected by the Covid-19 pandemic, Talentnet said.
Meanwhile, the oil and gas industry recorded the lowest salary growth rate at 2.1 percent, followed by banking with 5.6 percent, and processing with 6.5 percent.
Although almost all companies said they were tightening their purse strings, many said they are willing to give special bonuses to employees who play a key role in their business. As many as 69 percent of companies surveyed said they will pay such bonuses in a lump sum by year-end, while 13 percent said they were doing this quarterly, and another 13 percent were doing it monthly.
Due to specific industry characteristics, businesses surveyed in the financial sector including banks, consumer lending companies and fund management companies were handing out the highest performance-based rewards, with bonuses ranging between 20-20.4 percent of annual basic salary, the report said.
As of last year, Vietnam had one of the lowest average wages in the Asia-Pacific Region. An average Vietnamese worker earned $242 per month in 2019, compared to the regional average of $1,801, according to recruitment firm ManpowerGroup’s annual Total Workforce Index 2019.