Pick out one most outstanding significant intriguing eye-catching, most profound, most insightful one-sentence quote/phrase from Mr Thang Nguyen in this article: "EuroCham Vice-Chairman Thang Nguyen’s interview 
with VN Express
21 June 2024

Contact information
EuroCham Vietnam
Mr. Dan Martin, Senior Communication Officer 
<PRESIDIO_ANONYMIZED_EMAIL_ADDRESS>

Brief information about the business owner, including: name, position and business information (in which field, how many Vietnamese employees)? What is your experience working in Vietnam?

My name is <PRESIDIO_ANONYMIZED_PERSON> (NOTE: Nguyễn Xuân Thắng for the Vietnamese article). I am the Vice-Chairman of the European Chamber of Commerce (EuroCham) in Vietnam, and I am also General Director of  Schaeffler Vietnam, a German company with a team of around 700 mainly Vietnamese employees. We specialise in manufacturing high-precision bearings for various industries. My career has been primarily based in Vietnam, where I've worked in both Hanoi and Ho Chi Minh City for several international companies.

Some of the recent reports, seminars and conferences of Vietnamese state agencies are pointing out that Vietnamese workers still need to improve at some points: disorganisation, poor working style, poor teamwork, always considering immediate benefits. I would like to ask your perspective on Vietnamese workers. What disadvantages/advantages of Vietnamese workers do you see?

In Vietnam, we have a large workforce- around 56 million people of working age. This is a big pool of potential workers. Yet, only about 11% of people over 25 years old have a university degree.  This creates a competitive environment for companies across all sectors – state-owned, foreign, local, and private – as they compete to attract and hold onto skilled workers.

For foreign companies setting up operations in Vietnam, finding employees with the right skills is important for a smooth transition and good productivity. However, nearly all new hires require additional training to fully meet the demands of their roles. This shows a clear gap between the skills available in the local workforce and the specific needs of foreign companies.

This skills gap is particularly evident in specialised fields like high-precision engineering, where finding workers with the right technical skills can be very challenging. To overcome this, companies often have to create their own training programs, such as two-year apprenticeships, to prepare people for the specific needs of their industry. While the Ministry of Education and Training is actively trying to improve vocational training, Vietnam's newly developed industrial sectors means there are not as many people with the deep technical knowledge these jobs require.

The challenges faced by companies in Vietnam extend beyond technical skills. Many employees promoted to management positions lack the experience and training needed to lead larger, diverse teams effectively. Moving from overseeing a small team of two or three lab specialists  to managing 20 or 30 people with different backgrounds and skill sets requires a different approach altogether.
Without proper leadership training, managers may struggle to effectively lead their teams, resulting in poor management practices that contribute to an unhappy and unproductive workplace, or in other words, overall lack of professionalism. This often leads to high employee turnover, creating a cycle of constant hiring and departures. This instability, particularly among managers, makes it difficult for companies in Vietnam to maintain stability and achieve lasting growth.
The situation is further complicated by the tendency for workers to prioritise short-term rewards over long-term career development. To attract and retain talent, companies often engage in a "bidding war," offering slightly higher salaries than their competitors, especially during the orders fulfilment campaigns. For example, if the average monthly salary for a position is VND6.5 million ($250), a company might offer VND 7.0 million ($270) and post a big sign with this information right at the entrance of the industrial park to catch the eye of potential employees.

Smaller companies also try to tempt employees away from larger corporations by offering them higher salaries and more prestigious job titles, even if those employees do not have the experience to match those positions. This can lead to confusion about what different job titles actually mean and what skills a person truly possesses. For instance, a production supervisor who is normally responsible for one production line who gets a quick promotion to manager level might not have the management experience needed to handle more complex tasks like overseeing the full production process of a factory. 

This focus on short-term rewards can be problematic. This lack of stability hurts companies and limits opportunities for workers to learn and grow in their careers.

On a positive note, the Vietnamese workforce in general has a clear advantage: they are quick learners and very willing to learn new things. With the right training, coaching, and development programs in place, Vietnam has strong potential to build a robust, high-quality workforce to support the country's economic growth ambition. Over time, the more developed, more established generations will become role models for the newer generation to learn from, then the Vietnamese workforce will be progressively more professional. 

An example of learning from difficult experiences with workers in Vietnam

One of the biggest challenges we have faced is the high turnover rate among factory workers in southern provinces like Dong Nai and Binh Duong. In these areas, it is not uncommon to see 15-20% of employees leave within their first year. This is largely because about 80% of the workforce in this “major economic triangle” are people who have moved there from other provinces, hoping to find better jobs and earn more money.

This strong desire for improvement means that many workers see changing jobs frequently as a way to get ahead. It is common to see resumes in the southern provinces with a lot of job changes in a short amount of time. These workers, often from other parts of Vietnam, are mainly looking for higher salaries. This constant movement of workers disrupts production and can affect the quality of the products being made.

For example, my company initially partnered with a supplier located near our factory in Dong Nai. We experienced significant problems with on-time delivery due to their high employee turnover rate, which disrupted their production lines. Despite our repeated efforts to work with them, the delays continued, and eventually, the supplier admitted they were unable to fulfil our order.

Following this setback, we partnered with a similar supplier in the north. Within just three months, this new supplier was fully operational and consistently delivering on time.

While the salary difference between northern and southern Vietnam is generally small, the turnover rate in the south is much higher. In the north, factory work is often seen as a desirable career path, offering stability and advancement opportunities compared to traditional farming. Additionally, many northern factories foster a close-knit, family-like atmosphere, promoting employee loyalty and reducing turnover. Northern workers often prioritise job security and the convenience of working near their families and communities, making them more likely to stay with a company long-term even with slightly lower wages. 

Understanding of these regional differences would help companies develop specific regional strategies to retain and develop the good talents in this challenging labour market. 
What year did Schaeffler cooperate with a supplier in Dong Nai?


The cooperation began before COVID-19 but continued afterward. The delays occurred after COVID-19 when we resumed ramping up production. Our new plant had just opened a few months before the COVID-19 pandemic started.


At least how many times does the partner delay delivery? What are your efforts to improve the situation?


Multiple times. They repeatedly told us they had a huge backlog from many key customers that needed to be cleared first. As we were new and the orders were not large, we were low priority. Only after a few months did they admit they could not retain enough technicians who had received technical training from us.


Because they did not initially disclose the real problem, we kept requesting more review meetings and providing additional technical training. We even sent our experts to help them plan production more efficiently, but as we didn't understand the root cause, they continued to struggle. After several missed deadlines and minimum quantity deliveries, we knew we had to develop alternative sources.


What is the most serious impact of this situation on your company?
The most serious impact was the delay of a newly installed production line. When setting up a new line, we must simultaneously develop the supply strategy for parts, tools, materials, and consumables. We must meticulously control and manage these "moving targets" to near-perfect schedules to run the production line on time and on budget. Out of hundreds of components, no matter how big or small, technically sophisticated or simply a screw, if one doesn't arrive on time, everything else must wait.


Besides serious financial implications, the delay meant damaging our reputation with our customer right from the beginning. This could make them reluctant to develop new products with us in the future. Internally, within the Group, we appeared incapable of managing complex tasks like setting up a new production line while simultaneously developing a harmonious supply chain. This could cost us dearly in our efforts to attract further investment from the Group to Vietnam.

To make Vietnamese workers suitable for your business in particular and foreign businesses in general, do you have any advice or suggestions? 

Investing in education and training is a very important solution to the skills gap. However, these programs should not solely focus on technical skills. It is equally important to teach students how modern businesses operate as a whole.

In my experience, a significant portion of workplace issues arise from employees not fully understanding the bigger picture of how their company operates. They may excel in their individual roles but lack knowledge of how their work fits into the overall operation. For example, many employees misunderstand the roles of other departments, leading to frustration and conflict. This issue is not limited to entry-level workers. It is often prevalent among managers and senior staff as well.

Improving education programs to include broader business knowledge would be a big step forward. Employees would better understand how their individual tasks contribute to the company's goals and success. This can lead to less conflict between departments, increased teamwork, and a stronger sense of shared purpose.

Hands-on training opportunities like internships and apprenticeships are also extremely important. They allow students to experience real business situations, helping them apply what they've learned in school to actual work scenarios. This is invaluable for bridging the gap between theory and reality.

These training initiatives can significantly improve the quality and the professionalism of the Vietnamese workforce, making them more attractive to both local and foreign businesses. A skilled and knowledgeable workforce is essential for Vietnam to increase its productivity and compete globally. Investing in better education today will pay off in the future with a stronger economy and greater opportunities for everyone."