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The true costs of a cash-driven workforce
With the Salary Survey 2008 by Navigos Group, the leading and largest recruiting and integrated human resource solutions provider, now ready for employers and policymakers' consumption, the group's director of human resource advisory services, Winnie Lam, talks about the implications of the findings.
Could you outline the Salary Survey 2008's findings?
One of the most meaningful findings we can underline is the average salary level, which rose by around 19.5 per cent between April 2007 and March 2008, the highest increment within the last five years. We are also seeing a certain number of companies which have done ad hoc salary reviews more than once over the course of the same period, mainly to address retention issues and rising inflation.
Also, right now, the atmosphere is that it’s all very cash-driven - most companies react and respond to the issue by raising salaries. The potential of other benefits and incentives that are not cash-based is still not maximised in this market.
It remains to be seen when companies will go more in that direction as an alternative to just raising salaries.
Like we often say, a trend is always based on a couple of factors and companies must look at different issues at hand. Definitely external factors like macroeconomic performance affect companies. Some of the companies in the survey shared that they have done more than one salary review mainly in response to rising inflation to keep their people.
Based on the survey results, how can we look at pay levels in Vietnam compared with regional countries?
If you look at professional levels, it seems to be getting competitive. However, it is important to point out that at the same professional level, it is the quality that poses the biggest challenge and not the pay level. At the same pay level, Vietnam is definitely behind on quality on professional positions and many overseas companies still find a skills vacuum when they recruit in Vietnam.
Will there be any differences between the survey’s findings and the reality when companies conduct their own annual salary reviews by the year’s end?
When we did the survey for 2007, it came out that the most common period for salary reviews in a given year is March-April. That was the reason why we changed the cycle of this year’s report to do data collection within April 2007 to March 2008 so that we get the data after the salary reviews. The report’s release in September will be in time for companies to have some basis when planning their salary reviews. As for reality changes, it is speculative at this time to comment on any differences that may happen. We will be coming out with an aged report by December anyway to update changes in the market, if any.
What significant information else can end-users expect from your formal presentations of the Salary Survey 2008 later this month?
Participants at the seminars to be held in Ho Chi Minh City on September 23 and Hanoi on September 25 will be able to find the industries that are the highest and lowest payers, and ones that are most dynamic in pay rises.
As employees increasingly demand higher pay, stock options and better remuneration packages, how should employers respond to stay afloat in a competitive labour market?
Acquiring good incomes to sustain a good living is quite a legitimate purpose and candidates have the right and reasons to ask for higher compensation and benefit packages. For companies, the main imperative is to end up with more talented people than competitors, and keep them.
This becomes more an exigent requisition for businesses especially in a slow-footed period of the economy. How to balance resources while keeping a company’s human resources policy stable is hard to resolve.
Increasing salaries is not the best way to keep qualified staff although companies should stay competitive in the salary market by using salary surveys and to make changes at the right time to prevent employees from leaving. This means that those who have enough information and are one-step ahead in the labour market will be advantageous in attracting and retaining talent.
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