Market Report: Vietnam
One of BMI's favourite recruitment markets due to its consistent, steady growth and strong economic forecasts.
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Market Report: Vietnam
One of BMI's favourite recruitment markets due to its consistent, steady growth and strong economic forecasts.
As with many emerging markets, Vietnam is rife with opportunities as well as challenges.
Its declining youth population poses a threat to productivity and economic growth in the long run. Meanwhile, the government is busy enacting wide ranging reforms across various sectors of education to improve the quality of education at home and better prepare graduates for the work force. This presents a variety of opportunities for foreign entities to partner or invest in Vietnam to support change, especially as the country breaks down barriers to foreign investment.
Indeed, the mentality of both the government and its people is increasingly open, as also evidenced by outbound travel and tourism and social media behavioural trends.
Read on to learn more about important developments in Vietnam covering a period of roughly 2015 to 2020. Since Covid-19, the country has recovered well, as detailed in the relevant section below. Please don’t hesitate to contact us for help or advice when recruiting in Southeast Asia.
As indicated in the first section of this report, Vietnam’s working age population is set to decline in the coming decades and in turn, overall labour productivity is likely to decline. As a result, this will “probably be a drag on per capita growth between 2020 and 2050,” according to an IMF blog post.
The World Health Organization now considers Vietnam to have one of the world’s fastest ageing populations in the world.
Added to this, Vietnam has a low retirement age (currently 60 for men and 55 for women), and now has the second-highest life expectancy in Southeast Asia (75 years).
In a move towards decentralisation, the government seeks to shift from a highly specialised centrally planned system to a more autonomous system of multi-disciplinary universities.
Tran Anh Tuan, deputy director of MOET’s University Education Department, said Vietnam endeavours to change four issues related to higher education:
Circle back to the Education in Vietnam report section for a refresher on the country’s education landscape.
The following statistics come from official government reports:
One of the key objectives included in the government’s reform plan for higher education is to improve the teaching quality of academics employed in higher education. A goal set by the government is that all academics will hold masters and preferably doctoral degrees by 2020.
Saigon Online reported in January 2019 that the Prime Minister approved a project to improve lecturer quality. The country aims to attract 1,500 scientists and holders of master’s degrees working abroad or in international units to lecture in local educational institutions. They are particularly looking for professors the field of art and sport, and the government will pay more for those who have published articles in prestigious journals.
One of Vietnam’s strategies to achieve further economic growth is the modernisation of its education system, which is considered to be lagging behind other Southeast Asian countries by outside observers. Education features prominently in Vietnam’s current “Socio-Economic Development Strategy for 2011-2020”, which seeks to advance human capital development, boost enrolments in higher education, and modernise education to meet the needs of the country’s industrialisation in a global environment.
The goals of several of the current education reforms were already laid down in a government directive from 2005 on the “Comprehensive Reform of Higher Education in Vietnam, 2006–2020”. Among the bold reforms currently enacted are the establishment of new accreditation and quality assurance mechanisms, the creation of a national qualifications framework, and a drastic increase in higher education enrolments by 125%, from 200 students per 10,000 people in 2010 to 450 students per 10,000 people by 2020.
Labour force development is being prioritised with large-scale investments in applied, employment-geared training: 70-80% of the student population should be enrolled in applied programmes by 2020.
A skills gap is emerging as an obstacle to both FDI absorption and to business in general. In its Global Competitiveness Report 2017–2018, the World Economic Forum cited an “inadequately educated workforce” as the second biggest constraint on doing business in Vietnam.
Similarly, a World Bank survey of employers found that filling vacancies for jobs that require higher skills was a major challenge for most firms, with 70–80% of managerial and technical applicants reported as being underqualified.
According to the Asian Development Bank, Vietnam needs to prioritise three sets of initiatives toward strengthening its universities and its technical and vocational education and training (TVET) system:
Progress in these area can lead to coordinated strategies toward achieving national policy targets and to adopting jointly agreed standards and responsibilities among training providers.
As much as the Vietnamese economy is growing, it is not yet doing so on the strength of its university graduates.
Between 2003 and 2006, the percentage of firms that reported difficulty in recruiting workers…
The World Bank released a detailed report in 2018 entitled “Vietnam’s Future Jobs: Leveraging mega-trends for greater prosperity” which identifies the challenges and opportunities for better quality and more inclusive jobs in Vietnam and shares policy reforms that could be a catalyst to create these jobs. The report outlines recommendations drawing from macroeconomics, agriculture and rural development, business environment and exports, labour force participation and mobility, employment, trade policy, gender, education and skills training, and demographics.
In December 2018 Saigon Online reported that the Asian Development Bank (ADB) approved a USD 78 million financing package to help Vietnam’s labour force meet market demands by improving the quality of National Technical and Vocational Education and Training (TVET) institutions.
The Skills and Knowledge for Inclusive Economic Growth Project, supported by a USD 75 million loan from ADB, will provide advanced training equipment to 16 national TVET institutes. In collaboration with the business community, these upgrades will enhance the quality of training programmes for advanced skills in key growth areas, such as electronics, mechanics, biotechnology, automation, and automotive.
In addition, a USD 3 million grant financed by the government of Japan will complement these activities by strengthening the quality of the soft skills and developing demand-driven short-term skills programmes for women and youth in disadvantaged communities.
“With more than 60% of the population under age 35, Vietnam has the potential to help deliver high and sustainable economic growth,” said ADB Senior Social Sector Specialist Ms. Sakiko Tanaka. “To help realise this potential, this project aims to help ensure Vietnam’s labour force has the skills and knowledge necessary to increase their competitiveness and productivity for the global market.”
Vietnam is currently facing a shortage of skilled labour, and its labour productivity is lower than its neighbours in Southeast Asia (e.g., 7.5% of Singapore’s and 17% of Malaysia’s in 2015). Moreover, a recent survey by Vietnam’s Chamber of Commerce and Industry said TVET graduates lack industry-specific skills and other soft skills.
The project is expected to benefit about 75,000 students as a result of an improved teaching and learning environment. At least 2,500 adults and out-of-school youths are expected to take part in short-term skills training courses to help them find better-paying jobs or start their own businesses.
The rise in outbound student numbers corresponds with outbound travel habits from globally curious Vietnamese consumers.
In 2018, Visa released its Global Travel Intentions (GTI) Study which analysed international travel trends and the behaviour of more than 15,000 global travellers from more than 27 countries and territories. The report shows that Vietnamese travellers are expected to take on average nearly five trips abroad in the next two years, up from 3.5 trips in the last two years.
Vietnamese travellers are also expected to spend more on their trips overseas. Each traveller is expected to spend an average of USD 1,100 per trip, up from USD 880.
The average time spent overseas by Vietnamese travellers was four nights per trip over the past two years, much lower than the Asia-Pacific average of seven nights. They also chose destinations that were, on average, 4.5 hours travel time away.
Thailand, South Korea, Japan and Singapore were the most visited countries. Intra-region travel dominated, with 91% of Vietnamese travellers visiting destinations in Asia in the past two years.
They are likely to continue to be well patronised over the next two years, with the U.S emerging in the top five.
Meanwhile, Mastercard Advisors forecast that some 7.5 million Vietnamese travellers will venture outside the country in 2021, increasing from only 4.8 million in 2016.
About 6.5 million Vietnamese tourists travelled abroad in 2016, an increase of 15% from 2015, according to the national Vietnam Tourism Association.
Annually, Vietnamese spent over USD 3.491 billion a year on travel and accommodation – and that’s just via ecommerce – an increase of 16% in the last year.
Vietnam has been hailed as one of the success stories in the wake of the Covid-19 pandemic owing to the government’s swift, decisive action which led to a low infection rate. The country’s recovery has also been buoyed by two key economic measures introduced in 2020:
In sharp contrast to Western countries, Vietnam experienced GDP growth of 2.9% in 2020. Despite Covid-19, the country beat predictions from Goldman Sachs which forecasted 2.7% growth and beat the Asian Development Bank’s forecast of 1.8%.
Looking ahead, Vietnam’s GDP growth is predicted to reach an incredible 6.6% in 2021. Further growth will continue to come from:
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BMI's biannual student recruitment fairs in Indonesia, Thailand and Vietnam draw in thousands of academically-oriented students and their parents to bring them in direct contact with institutions from around the world. BMI also takes a limited number of accredited institutions on chauffeured visits to top-rated private high schools in Bangkok, Hanoi, HCMC and Jakarta and to meet top high school counsellors at the Internation School Workshop & Forum in Indonesia & Vietnam.
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Learn more »Ho Chi Minh City - High School Visits - 2 Day
Mar 05 - Mar 06
Bangkok - High School Visits - 2 Days
Mar 13 - Mar 14
Young Southeast Asians are heading overseas in growing numbers, and this event is where it all starts. Meet the principals and high school counsellors who inspire and encourage students in their final years of secondary school, and spend 2 days solidifying relationships with influencers from the best private and international schools in the region.
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Learn more »Ho Chi Minh City
One Delegate/ One Meeting Schedule
Mar 07 - Mar 08
Ho Chi Minh City
Two people/One Meeting Schedule
Mar 07 - Mar 08
Ho Chi Minh City
Two people/Two Meeting Schedules
Mar 07 - Mar 08
Internet, mobile and social media trends in Vietnam
Fast facts – from a January 2019 Global Digital Report by We Are Social and Hootsuite
Mobile trends