Human Resources Management Strategies of Taiwan-based Enterprises in Vietnam

2.2.2 Human Capital Issu
es
A. 
 
Employee Recruitment
 

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According to the recently result of Provincial Competitiveness Index (PCI) 
reported by Vietnam Chamber of Commerce and Industry in 2017 showed that 69% of 
FDI enterprise in Vietnam assumed that they have difficulty in recruiting skilled staffs 
to serve their production and activities of company (Ngoc Ha, 2018). Beside, FDI 
enterprises also face difficulties in finding human resources with high skilled positions 
such as mangers, supervisor, chief executive officer (CEO) and chief financial officer 
(CFO) as well. Based on the statistics of PCI in 2017, 36% of FDI enterprises said that 
they face with difficult to recruit the group of managers and supervisors, only 31% of 
FDI enterprises assessed the quality of Vietnamese labor to meet their required (Ngoc 
Ha, 2018). Thereby, FDI enterprises, in order to maximize the benefit of business as 
well as improve employees performance, they are not only continues to rely on the 
advantages of cheap labor cost, but also needs to improve the quality of labor through 
spending more for training new employees. 
Lack of language and technical skills also a problem when recruit employees 
form Vietnam (Faro Talent professional article, 2018). Although English has been 
taught as a mandatory subject since elementary school, but most of Vietnamese is only 
capable of using the basic English proficiency. It is seen as a roadblock of both 
Vietnamese staffs and foreigner managers within a multicultural workplace. 
Furthermore, the skills gap between urban employees and rural employees bring about 
a significant difficulty for FDI enterprises in which factories set up in rural area. The 

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problem of employee recruitment of FDI enterprises occur not only in Vietnam, but 
also in other countries. Depending on the difference of working environment and 
culture of each country, the organization should find out the proper solutions for 
employee recruitment policy. As Segalla, & Turati (2011) outlined that the cultural 
impacts to employee recruitment policy, the organization based on different countries 
to have different policy that able to fit with local culture as well as company culture.
Table 3: Existing problems for hiring employees in Vietnam 
Source from: 
http://www.farorecruitment.com.vn/existing-problems-for-hiring-
employees-in-viet-nam-t_1/366
B. Labor Productivity 
Labor productivity reflects the capacity to create wealth, the performance of 
labor in the production process, it is measured by the number of products or amount of 
value that a worker complete in the standard time allowed (Nguyen, 2019). In case of 
labor productivity in Vietnam, according to the General Statistics Office (GSO), 

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Vietnam’s labor productivity has improved significantly in recent 
years; nevertheless, it 
is still very low compared with many countries in the ASEAN region (Nguyen, 2019). 
In tem of purchasing rate equivalent to 2011, Vietnam’s labor productivity in 2016 
reached USD 9,894 which only equal 7% of Singapore, 17.6% of Malaysia, 36.5% of 
Thailand, 42.3% of Indonesia, 56.7% of Philippines and 87.4% of Laos, according to 
GSO. Undoubtedly, the current situation of labor productivity of Vietnam makes for 
FDI enterprise concerned about production efficiency and benefits of business as well. 
Thus, the role of HR department is great importance in recruiting, training and 
develop
ing employees to enhance the employee’s skills, high production capacity 
as 
well as contribute to improve business development.