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Learning to play with a flexible hand
The continuing financial malaise has forced companies worldwide to reshuffle their human resource plans and make huge numbers of employees redundant.
John Haley, president and chief executive officer of Watson Wyatt Worldwide, a leading global consulting firm on people and financial issues, spoke to Vietnam Investment Review’s Hoang Mai about how the crisis has impacted Vietnam’s labour market and how local firms can fight back.
Watson Wyatt has conducted surveys about the impact of the global crisis on human resource (HR) plans of US firms. Will you work on similar surveys in Vietnam since Watson Wyatt Vietnam started operations in January, this year?
We have been conducting surveys on salary trends in Vietnam since 2004. We did a similar but brief and quick survey back in November 2008 and have been using the findings on presentations to business groups in Ho Chi Minh City. At Watson Wyatt, our research on the different markets sets us apart and our research has helped clients a lot. Our clients outside of Vietnam are also very interested in trends in Vietnam and Vietnam will be a regular data source for our research centre, Asia Pacific Innovation and Research Centre.
Watson Wyatt’s recent survey said ‘[the] recession [is] forcing companies to cut executive bonuses and long term incentives’. Do you see similar trends in Vietnam since a lot of companies in the country have also been hit hard by the economic crisis?
I already know of a few companies cutting expatriates’ bonuses, but not yet local Vietnamese managers’. The local Vietnamese management talent shortage is still a concern. Therefore, I do not see this trend happening yet. Will it happen in the future? We will know from the hard data from the survey we are currently conducting. The findings will be released in late April 2009.
Vietnam is suffering from a dire shortage of skilled and professional workers, especially those in managerial positions. Is it a problem that Vietnamese firms have to freeze their staff’s salaries, but worry about staff retention and motivating key positions?
It is always a difficult balance between remuneration costs and staff retention and motivation, not just in Vietnam and not just for Vietnamese firms. The strategy is to provide competitive packages, with the right ratio of fixed pay and various pay, and equip the structure through other integrated HR systems such as orientation, performance management, competency building and career development.
The Vietnamese government has recently decided to provide interest-free loans to firms that have been forced to make workers redundant in the aftermath of the crisis, in order to pay workers’ salaries and job-loss allowances. Do you think the Vietnamese government is doing the right thing in providing a safety net for local workers?
Governments providing fund to help loss-making companies pay off salaries, job-loss allowances and keep the business going through a tough time does not only happen in Vietnam. We see this almost everyday in the news. The intention is good and these actions do help a good number of people for a period of time. The major problem here is the economic slowdown, so the most effective way [to help the largest number of people] is to boost the economy and keep growth up.
The Vietnamese government is trying to improve the competency of the nation’s labour market, including the skills of workers, availability of labour-related information and legal frameworks. As a global HR consulting firm, how would Watson Wyatt advise the Vietnamese government to turn their desires into reality?
Any organisation needs to invest their resources to build and upgrade the current labour market’s competencies and at the same time plan for a succession continuous labour supplier. The key is to identify what competencies are needed to do the current jobs for performance and the future jobs for development. Once this is clear, planning and spending time, effort or capital to obtain the competency upgrade is not difficult. Plenty of formal education, vocational training, public seminars, coaching and publications can be made available in Vietnam.
Foreign employment services and HR consulting firms like US Manpower and Watson Wyatt, are increasingly setting up a strong presence in Vietnam. In your viewpoint, what does this trend suggest?
I think more and more business executives now realize that getting experts to help build a comprehensive HR management system is crucial. Increasingly, companies will understand that it is imperative that they have their management structure established and implemented. Not doing it will cost companies too much. Watson Wyatt Vietnam’s focus is on Human Capital Consulting and we are operating independently of any recruitment activities.
VietNamNet/VIR
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