Labor Market In Vietnam: Best Things To Know in 2023

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Vietnam has experienced remarkable economic growth and development over the past few decades. The country’s GDP has been consistently increasing, driven by robust exports, foreign direct investment, and a growing middle class. As Vietnam continues to position itself as an attractive destination for businesses and investors, it becomes crucial to delve into the dynamics of its labor market.

This article aims to provide a detailed and insightful exploration of the labor market in Vietnam. By examining key aspects such as labor force demographics, employment trends, education and skill development, employment regulations, recruitment practices, job market dynamics, and challenges and opportunities, readers will gain a comprehensive understanding of Vietnam’s labor market landscape. 

Labor market in vietnam

Overview of Vietnam’s Labor Market

The labor market in Vietnam is characterized by a large and diverse workforce. As of 2023, Vietnam is set to reach a population of 100 million people, making it the 15th most populous country in the world. The population demographics play a significant role in shaping the labor market. The median age of the Vietnamese workforce is 32.5 years, indicating a relatively young and dynamic labor force. This youthful demographic offers both opportunities and challenges, as it requires adequate skill development and employment opportunities to harness their potential.

Vietnam’s labor market is closely aligned with its key industries and sectors, which have been instrumental in driving the country’s economic growth. The manufacturing sector is one of the primary contributors, employing approximately 16% of the workforce. Industries such as textiles, electronics, and automotive manufacturing provide significant employment opportunities. Additionally, agriculture, construction, services, and tourism sectors also play vital roles in providing jobs and contributing to the economy.

Foreign investment and global trade have played a crucial role in shaping Vietnam’s labor market. Vietnam has attracted significant foreign direct investment (FDI) over the years. In 2020 alone, FDI inflows reached $15.27 billion, demonstrating the country’s attractiveness to foreign investors. This influx of FDI has led to the establishment of numerous manufacturing facilities, creating job opportunities for the local workforce. Moreover, Vietnam’s participation in global trade agreements, such as the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) and the EU-Vietnam Free Trade Agreement (EVFTA), has further expanded trade opportunities and stimulated job growth in various sectors.

Labor Force and Employment Trends

Total labor force statistics

The labor market in Vietnam boasts a significant labor force, contributing to its economic growth. As of 2020, the total labor force in Vietnam stood at approximately 56 million individuals, making it one of the largest in the region. This abundant labor force provides ample opportunities for businesses and industries to meet their workforce needs and drive productivity.

Employment rates and patterns

The employment rate in Vietnam has shown positive trends, with around 76.9% of the working-age population being employed and unemployment rates dropping 2.25% in 2023. The country has witnessed a shift from predominantly agricultural employment to non-agricultural sectors, such as manufacturing, services, and construction. This transformation reflects the ongoing structural changes in the Vietnamese economy, with an increasing focus on industrialization and urbanization.

Gender and age distribution in the labor market

The labor market in Vietnam exhibits distinct patterns in terms of gender and age distribution. Women make up a significant portion of the workforce, accounting for approximately 48% of the total labor force. However, gender disparities persist, particularly in terms of occupational segregation and wage gaps. Efforts are being made to promote gender equality and empower women in the workforce through various policies and initiatives.

Additionally, the labor market in Vietnam reflects a relatively young demographic, with a significant proportion of the workforce falling within the age range of 25 to 54 years. In 2020, the youth unemployment rate (15-24 years) was approximately 7.6%, highlighting the need for targeted measures to address youth employment challenges. 

Education and Skill Development

Overview of education system and enrollment rates

The country has made significant progress in expanding access to education, which overall adds value to the labor market in Vietnam. The education system comprises various levels, including pre-primary, primary, secondary, and tertiary education. As of the latest available data, the gross enrollment rate for primary education in Vietnam was 118%, reflecting widespread access to foundational education. Furthermore, the gross enrollment rate for tertiary education was 35%, indicating an increasing number of individuals pursuing higher education.

Vocational training and technical education initiatives

Vietnam recognizes the importance of vocational training and technical education in preparing its workforce for the evolving labor market. The government has implemented initiatives to promote vocational training programs and partnerships with industries. As of 2023, there are thousands of vocational training programs offering training in fields such as mechanics, electronics, hospitality, and information technology. These initiatives aim to enhance the employability of individuals and bridge the gap between industry demands and the skills of the workforce.

Skill gaps and challenges in the labor market

Despite progress in education and skill development, skill gaps and challenges persist in the labor market in Vietnam. Rapid economic transformation and advancements in technology have created a demand for new and specialized skills. Employers often report difficulties in finding skilled workers to fill positions in sectors such as information technology, engineering, and digital marketing. Additionally, soft skills such as problem-solving, communication, and teamwork are increasingly valued by employers. Bridging the skill gaps requires continuous efforts from both the government and private sector, including targeted training programs, collaboration with educational institutions, and industry-led initiatives.

Employment Regulations and Policies

Labor laws and regulations

Vietnam has established a comprehensive legal framework to regulate employment relationships and protect the rights of workers. The Labor Code of Vietnam governs various aspects of employment, including recruitment, wages, working conditions, occupational safety, and social insurance. It provides guidelines for employers and employees, ensuring fair treatment and promoting a harmonious work environment. The Labor Code has undergone revisions to align with international labor standards and address emerging labor market challenges.

Employment contracts and working hours

Employment contracts serve as the foundation for employment relationships in the labor market in Vietnam. They outline the rights and obligations of both employers and employees. Full-time employees typically enter into indefinite-term contracts, while fixed-term and seasonal contracts are common for specific projects or temporary employment. The standard working hours in Vietnam are 48 hours per week, with a maximum of 8 hours per day. Overtime work is regulated, and employees are entitled to additional compensation for overtime hours.

Minimum wage and social security benefits

Vietnam has a minimum wage policy in place to ensure a basic standard of living for workers. The minimum wage is determined annually and varies based on geographical regions. As of 2022, the minimum wage in Vietnam is around 4680 VND per month, the equivalent of 199 USD. In addition to the minimum wage, employees are entitled to social security benefits, including health insurance, maternity leave, sick leave, and retirement benefits. The social security system aims to provide protection and support to workers throughout their employment and after retirement.

Foreign Workforce and Expatriates

Policies and regulations for hiring foreign workers

Vietnam has policies and regulations in place to govern the hiring of foreign workers. The government aims to strike a balance between attracting foreign talent and protecting the interests of the local workforce. Employers intending to hire foreign workers must comply with specific procedures and obtain work permits and relevant visas. The regulations outline requirements such as the need to demonstrate skills not readily available among local workers, adherence to labor laws, and participation in social insurance programs.

Attracting expatriates and foreign professionals

Vietnam actively seeks to attract expatriates and foreign professionals to contribute to its economic growth and development. The country offers various incentives and initiatives to make it an attractive destination for skilled individuals. Cities like Ho Chi Minh City and Hanoi are hubs for multinational companies, startups, and international organizations, providing opportunities for expatriates to work in diverse sectors. The favorable business environment, competitive salaries, cultural richness, and lifestyle options make Vietnam an appealing choice for foreign professionals.

Opportunities and challenges in employing expatriates

Employing expatriates in the labor market in Vietnam brings both opportunities and challenges. Expatriates often bring valuable expertise, international perspectives, and technical knowledge to contribute to the local workforce. They play a significant role in transferring skills and technology to Vietnamese employees. However, challenges can arise in terms of cultural adaptation, language barriers, and understanding local business practices. Employers need to provide appropriate support and resources to facilitate the integration of expatriates into the local work environment.

vietnam labor market

Recruitment and Hiring Practices

Traditional recruitment methods

Traditional recruitment methods have long been prevalent in the labor market in Vietnam. These include job advertisements in newspapers, industry-specific publications, and offline networking events. Employers often rely on recruitment agencies and personal referrals to source candidates. Additionally, universities and educational institutions play a vital role in connecting students with job opportunities through career fairs and campus recruitment drives. Traditional recruitment methods continue to be used, especially for certain industries and positions. NNRoad can also offer assistance in hiring employees globally. 

Online platforms and digital recruitment

With the advancement of technology, online platforms and digital recruitment have gained popularity in Vietnam. Job seekers and employers increasingly turn to online job portals, professional networking sites, and social media platforms to connect and find suitable opportunities. These digital platforms offer greater convenience, wider reach, and faster response times compared to traditional methods. Employers can access a larger pool of candidates and utilize various tools for screening, interviewing, and assessing candidates’ qualifications.

Employer branding and talent retention strategies

In a competitive labor market, employer branding has become crucial for attracting and retaining top talent in Vietnam. Employers are investing in building a strong employer brand by highlighting their company culture, values, and opportunities for growth. They focus on providing a positive employee experience, including competitive compensation packages, flexible work arrangements, professional development programs, and a supportive work environment. Employee engagement initiatives, recognition programs, and career advancement opportunities are also implemented to foster talent retention and loyalty.

Job Market and Salary Trends

In-demand occupations and emerging sectors

The labor market in Vietnam is witnessing shifts in demand for certain occupations and the emergence of new sectors. Industries such as information technology, e-commerce, digital marketing, renewable energy, and healthcare are experiencing significant growth and driving job creation. In-demand occupations include software developers, data analysts, digital marketers, renewable energy engineers, and healthcare professionals. These sectors offer promising career opportunities for individuals with the relevant skills and expertise.

Salary levels and compensation packages

Salary levels in Vietnam vary depending on factors such as industry, occupation, experience, and location. Generally, salaries have been increasing over the years due to economic growth and rising labor market competitiveness. Average salaries are around 6.5 million VND per month as of 2022 or approximately $275 USD/month, with higher wages observed in major urban areas like Ho Chi Minh City and Hanoi. Compensation packages often include additional benefits such as health insurance, bonuses, allowances, and opportunities for career development.

Factors influencing job market dynamics

Several factors contribute to the dynamics of the labor market in Vietnam. Economic conditions, industry trends, technological advancements, and government policies all play a role. Vietnam’s economic growth and increasing foreign investment create employment opportunities and shape the demand for different skills. Technological advancements and digital transformation are reshaping industries and driving the need for specialized skills. Government initiatives and policies aimed at promoting certain sectors or attracting investment also influence job market dynamics.

Challenges and Opportunities in the Labor Market

Skill shortages and workforce development needs

The labor market in Vietnam faces challenges related to skill shortages and workforce development. As industries evolve and new technologies emerge, there is a growing demand for specialized skills that may not be readily available in the market. This highlights the importance of investing in workforce development programs, vocational training, and education initiatives to bridge the skill gap. Collaborations between educational institutions, government agencies, and industries can help address these challenges and ensure a skilled workforce aligned with market demands.

Increasing demand for digital and tech skills

The digital transformation and technological advancements in Vietnam have created a significant demand for digital and tech skills. Industries such as information technology, e-commerce, software development, and data analytics are experiencing rapid growth and require a workforce equipped with digital literacy and technical expertise. Upskilling and reskilling initiatives focusing on digital skills, programming languages, cybersecurity, and artificial intelligence present opportunities for individuals to enhance their employability and contribute to these expanding sectors.

Opportunities for entrepreneurship and startups

Vietnam’s dynamic business environment presents opportunities for entrepreneurship and startups. The country has witnessed a surge in startup activity, particularly in sectors like technology, e-commerce, and fintech. The government has introduced initiatives to support entrepreneurship, including tax incentives, funding programs, and incubation hubs. These initiatives encourage innovation, creativity, and job creation. As the startup ecosystem continues to evolve, individuals with entrepreneurial aspirations have the opportunity to contribute to the country’s economic growth and harness their business ideas.

How is the labor market in vietnam?


In this article, we explored the labor market in Vietnam, examining various aspects that provide insights into its dynamics and trends. We discussed the country’s economic growth, population demographics, key industries, employment regulations, education system, recruitment practices, and challenges and opportunities in the labor market.The labor market in Vietnam presents a dynamic landscape of opportunities and challenges. Keeping up with its trends, skill requirements, and industry shifts is essential for success. By staying informed about the labor market in Vietnam, individuals and organizations can adapt, thrive, and contribute to the country’s sustainable economic growth. If you are interested in delving deeper into the labor market in Vietnam, we encourage you to explore our website for the latest information.

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