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A strategic shift in people strategy
Consistent with previous years’ results, High Tech, Life Sciences, and Chemicals industry will remain some of the strongest-performing within the Vietnamese market, with their base salary increase rate forecasted to be at 9.1%,9.1%, and 9.0% respectively in 2019.
Similarly, thanks to the strong local and regional potential as well as their performance, the Banking/Financial Service industry’s variable bonus rate led the market, at 25.4% in 2018. This shows high potential for expansion in this particular market.
This year, there is an observable strategic shift in the remuneration budget. At higher levels: Head of organisation, and Executive, and Management levels have had their bonus rates increased higher than all other levels (at 21.3%, 19%, and 17.1% respectively). This is understandable – as key drivers of business profit and performance, managerial and leadership positions are motivated through variable bonus. On the other hand, para-professional and professional individuals prefer a more stable salary rate to ensure their secure daily life.
Contrary to previous year, where Low pay competitiveness stood secondary, in 2018, there is a balance in need between Career progression and Pay competitiveness (47%). This proves that employee demand is quickly shifting towards a balanced need between a stable career progression and equitable compensation for their effort.
“In the digital age where businesses are predominantly occupied by millennials, behaviours and expectations of employees are rapidly diversifying. Other than career progression, employees feel the need to see the fruits of their efforts, and see that effort reciprocated equitably. As such, appropriate remuneration schemes and flexible training and development options are pivotal.” Commented Ms. Nguyen Thi Thanh Huong, Deputy CEO of Talentnet, Head of Human Capital Solutions and Mercer Salary Survey Department.
To conclude, 2019 is forecasted to be a promising year with businesses quickly adapting to the digital age. It is evident that businesses are slowly shifting towards a more methodised and sustainable people strategy approach. Nonetheless, in order to make timely and accurate decisions regarding their employees, leaders must grasp the overall market picture through reliable data reference points, identify long term goals for the business, and organise business strategy in order to invest in the right people and right place.