Navigos Group, the leading company in Vietnam’s recruitment industry, operator of job portal VietnamWorks and executive search firm Navigos Search, today announces the industry report titled “The Labor Market in Manufacturing – Opportunities & Challenges in the 4.0 Era”. Over 3.200 candidates currently working or seeking jobs in the sector, along with over 200 employers recorded on VietnamWorks and Navigos Search’s database were surveyed for the purpose of this report.

Professional skills are the top prerequisite for successful recruitment

With 73% candidate respondents’ agreement, professional skills remain the most essential criteria for recruitment in the manufacturing industry. From the perspective of employers, 67% would refuse to take into consideration candidates who do not possess relevant technical knowledge or skills. Problem-solving skills and high discipline follow in the rank of importance with 42% and 39% respectively.

Despite employees’ tendency not to change jobs frequently, manufacturers still struggle with manpower shortage in both quantity and quality

“Stability” is the top priority for jobseekers, reported by 41% of candidate participants. This is consistent with the opinion of 57% of employers who agree that providing “a stable job” plays a substantial role in retention. The report shows a clear tendency of manufacturing workforce to commit long-term with their firms, as 73% of employers have turnover rates below 20%. Asking candidates, 40% answered they have stayed with the current firm for over 5 years.
Nevertheless, an alarming rate of 55% employees reported their firms experienced manpower shortage, which created a surge in the workload of current staff. 35% of employers responded they lacked a qualified workforce, while low rate of application remained a challenge (14%).

Remote workplaces and pollution are among the top 5 reasons for changing job

Despite having a stronger commitment, manufacturing staff are found to change job for various reasons related to the nature of the industry. On top of unsatisfactory salary, compensation and benefits, the location of suburban workplaces far from city centers and polluted working environment (air, noise,…) are among the top 5 reasons for quitting. The two are also considered biggest challenges of working in manufacturing, claimed by respectively 36% and 26% of candidates. At the same time, 39% of employers agreed that remote workplaces restricted their recruitment results.

Job opportunities in manufacturing are unattractive to young jobseekers

Manufacturing firms struggle to attract young candidates in the labor market, for several reasons including “career trends of young candidates” (42%) and “weak employer brand” (29%). In response, 32% of firms shared the plan to strengthen their employer brands to remedy the situation.

Vocational schools are most preferable for training collaboration

To alleviate manpower shortage in both quantity and quality, manufacturing firms have engaged in various forms of collaboration. Partnering with training facilities to improve (22%) or customize (21%) the curriculum to meet recruitment needs is common. More notably, vocational schools (49%) ranked highest on the list of training facilities preferred by employers for sourcing services, followed by universities (42%) and junior colleges (24%).

Online training and soft-skills training are uncommon

Traditional training methods such as on-the-job training, in-house training or in-service training for subordinates are common in manufacturing businesses, reported by over 43% of candidates and 83% of employers. On the other hand, online training is rare, as only 5% of employers and 4% of staff confirmed its application in their workplaces.
In terms of training agenda, 64% of firms stated their priorities were hard skills, compared to soft skills (17%) and foreign language (5%). What’s common is for employers to recruit people with relevant background knowledge and then provide training to improve their technical skills. Simultaneously, employees evaluated the staff at their current firms to lack proactiveness (72%), learning attitudes (45%), technical knowledge (36%) and discipline (36%).

The manufacturing sector in transit to Automation

46% of firms are automating up to 30% of all manufacturing processes and 32% have achieved 30%-up to 70% automation. These notable numbers recognized the current technological transition, made possible by manufacturing businesses who “invest in machinery” (65%), “invest in database” (41%), “adjust management and operations” (44%), “modify training” (39%) as well as “modify recruitment” (21%).
Employees also showed their active attitude towards change, by strengthening technical knowledge and skills (53%) and language competency (47%). While recognizing technological transition would have the gravest impact on blue-collars, both groups shared the opinion that “automation is inevitable in manufacturing”.

Suggestions from Mr. Gaku Echizenya, CEO of Navigos Group Vietnam: “The manufacturing sector in Vietnam has remained a leading industry with high potential for economic growth. However, unless actions are taken to accelerate the technological transition, we risk losing our attractive profile in the eyes of foreign investors to other developing countries in the area. All in all, efforts made by businesses to invest in machinery and tools must be solidified by improving the quality of manpower.”