Salaries in Vietnam are forecast to increase an average of 9.2% in 2015, down a fraction from 2014, before inflation is taken into account. After inflation is built in, it is set for a 3.1% increase, making Vietnam one of the leading countries in East Asia for salary increases in 2015, according to the recent APAC Salary Budget Planning Report.
According to recently released findings by Tower Watson Vietnam in its Total Rewards Survey highlighted an average salary increase of 9.6% in 2014, down from 11.7% last year. The general industry average staff turnover rate is reported at 12.7%, higher than the median of 11%.
By sector, the pharmaceutical industry is highest in terms of overall salary increases with 11.2%, but at the same time, it has the highest staff turnover rate at 15.9%. The insurance industry is lowest in pay increases with only 7.2% yet ranked high in turnover rate with 13.9%, followed by financial services at 13.6%.
Trang Vu, Global Data Services practice manager, Vietnam at Towers Watson said, “The average salaries increases at 9.6% is mainly driven by the pharmaceutical and manufacturing industries. There is a slight change in projected salary increases in 2015, down 0.4% compared to this year’s record.”
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“As the salary-increase budgets stabilize, companies need to carefully evaluate where to spend their limited funds for the next year. Differentiating between your crucial skill talent, high potentials and average performers is becoming more essential than ever to ensure the best use of your budget.”
“We’re seeing a pick-up in economic growth in Asia Pacific in the coming year against a backdrop of declining unemployment, which will create inflationary pressures,” said Huynh Thu Huong, General Director, Tower Watson Vietnam.
“The challenge for companies in Vietnam is to keep employees engaged, and staff turnover down, while not getting caught up in a pay-inflation spiral. From our Global Workforce Study, we know that, whatever people say, base salary is the number one driver for attracting and retaining highly skilled staff, so a fine balance needs to be found,” Thu Huong added.
“We believe that a well-defined employee value proposition (EVP) is increasingly important as cost pressures and talent shortages become more acute. This EVP should articulate how an employer is unique, offers a great workplace, and why the company attracts and retains great people.”
Also read: Where are the Most Satisfied Workforces in Asia?
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