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Human Resources in Vietnam: Ultimate Guide 2024

Vietnam’s human resources landscape is undergoing significant transformation as the country integrates more into the global economy. With rapid economic growth, companies are increasingly focused on strategic HR management to align with both local and international standards. 

In a competitive job market, businesses are using advanced recruitment methods and data-driven strategies to attract and retain talent. HR departments are also enhancing compensation packages to include competitive salaries, bonuses, and health benefits, while ensuring adherence to mandatory social insurance contributions covering health, unemployment, and retirement.

Furthermore, investment in employee development is rising, with a focus on training programs and career advancement to address skill gaps and improve performance. Additionally, there is a growing emphasis on creating diverse and inclusive workplaces, with HR playing a crucial role in fostering an inclusive corporate culture.

With all of this in mind, this article looks at the key human resources related factors foreign firms should be aware of when operating in Vietnam.

Vietnam’s Labour Code

Vietnam’s Labor Code (2019) is the primary legal framework governing employment relationships in the country. It establishes comprehensive regulations to protect the rights and obligations of both employers and employees. The Labor Code outlines provisions related to labour contracts, working conditions, wages, working hours, rest periods, and termination procedures. It sets standards for employment agreements, including mandatory details like job descriptions, salary, and working hours.

The Code also regulates important aspects such as probationary periods, social insurance contributions, occupational safety, and dispute resolution mechanisms. It aims to ensure fair labour practices, improve working conditions, and address issues like wage discrepancies and unfair dismissal. Additionally, the Labor Code provides guidelines for collective bargaining, employee representation, and the handling of workplace disputes.

Overall, the Labor Code serves to create a balanced and fair labour market, promote social justice, and support economic stability by setting clear standards for employment practices in Vietnam.

See also: Vietnam’s Labour Code for Foreign Firms

Labour Contracts in Vietnam

A labour contract in Vietnam formalises the employment relationship between an employer and an employee, outlining key details such as job description, work location, salary, working hours, and contract duration. It ensures legal protection by specifying the rights and obligations of both parties, including wages, benefits, and termination procedures, in compliance with the Labor Code (2019). 

The contract defines the terms of any probationary period, specifying its duration and performance evaluation criteria, and ensures the employee receives at least 85 percent of the agreed salary during this time. It also regulates the procedures for termination, including notice periods and severance pay, and includes provisions for mandatory social insurance contributions, such as health, unemployment, and retirement insurance. Overall, the labour contract is crucial for protecting both parties’ interests and ensuring legal compliance.

See also: Labour Contracts in Vietnam

Average Salary in Vietnam

The average wage in Vietnam provides a general indicator of the typical earnings across various sectors and regions, reflecting the overall economic conditions and living standards in the country. Unlike the minimum wage, which sets a legal floor for earnings, the average wage represents a broader measure of compensation, including salaries across different job roles, industries, and levels of experience.

The average wage helps gauge economic health, income distribution, and the standard of living. It is used by businesses, policymakers, and researchers to analyse wage trends, make informed decisions about salary adjustments, and evaluate the impact of economic policies. Additionally, it can influence labour market dynamics by shaping expectations for compensation and affecting employee retention and recruitment strategies.

Overall, while the minimum wage ensures a basic standard of living, the average wage offers insights into the broader economic landscape and earning potentials within the country.

See also: Average Salary in Vietnam

Minimum Wage in Vietnam

The minimum wage in Vietnam establishes the lowest legally permissible amount that employers must pay their employees for their work. Set by the government, the minimum wage aims to ensure a basic standard of living for workers and address income inequality. It applies across various sectors and is intended to cover the essential needs of employees, including food, housing, and transportation.

The minimum wage is periodically updated to reflect changes in the cost of living and economic conditions. It is determined based on geographic regions, with different rates set for different areas to account for varying living costs. This ensures that wages are appropriate to local economic conditions.

Employers must adhere to these minimum wage standards, and any payment below this threshold is illegal. The minimum wage also serves as a baseline for negotiating wages and benefits, contributing to fair labour practices and economic stability.

See also: Minimum Wage in Vietnam

Public Holidays in Vietnam

Public holidays in Vietnam provide official days off from work, allowing employees to rest and celebrate significant national and cultural events. These holidays are established by the government and vary each year based on the lunar calendar and fixed dates. They serve to honour important events such as the Lunar New Year (Tet), National Day, and Victory Day, reflecting the country’s history and traditions.

Public holidays ensure that workers have time to spend with family, participate in cultural festivities, and recharge, contributing to overall well-being and work-life balance. Employers are required to grant these days off and typically provide additional compensation for work performed on public holidays. The observance of public holidays also promotes national identity and unity by celebrating shared values and historical milestones. Overall, public holidays in Vietnam play a crucial role in maintaining cultural heritage and ensuring employee welfare.

See also: Public Holidays in Vietnam

What’s next?

Vietnam’s human resources landscape is undergoing significant transformation as the country integrates more into the global economy. With rapid economic growth, companies are increasingly focused on strategic HR management to align with both local and international standards.

And it is in line with the dynamic nature of human resources in Vietnam that key rules and regulations can change quickly. With this in mind, foreign firms looking to keep abreast of changes in the industry can best do so by making sure to subscribe to the-shiv.

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