Characteristics of popular workforce models in Vietnam
There are currently three main workforce models in the manufacturing industry, each of which affects business performance and talent retention. Traditional businesses are increasingly at a disadvantage. In contrast, modern businesses are more productive and retain talent better, thereby gaining hiring process vietnam advantage.
1. Traditional labor-intensive model
This old method still prevails in places where automation is limited and keeping costs low is a driving factor in decisions. These businesses rely heavily on manual labor from labor market vietnam with basic skills, often trained on the job rather than through formal training.
The biggest problem is the constant turnover of employees. “It is not uncommon for 15-20% of employees to quit within the first year of working at factories in the South,” said Nguyen Thang, Vice Chairman of EuroCham Vietnam. This has a negative impact on production and quality.
Compensation is mainly base salary, with few opportunities for advancement. Training is informal. Businesses adopting this model have difficulty retaining and attracting young workers who want more attractive and technology-based jobs.
Employee experience key to Vietnam’s HR growth
2. Transition model
Many Vietnamese manufacturers are operating in this transitional phase, recognizing the need for change but slowly implementing improvements. These businesses are starting to automate some specific tasks — textile companies currently automate about 10% of their work and plan to automate 25-28% in the near future.
According to surveys, 45-46% of these businesses cannot find enough skilled workers, clearly showing the training gap. However, they often only react to emerging problems rather than proactively preparing for future needs. Businesses are still struggling to retain employee onboarding vietnam, even though employee termination vietnam law in the manufacturing industry remains at 20-30% annually, according to Vietnam News.
These businesses manage a multigenerational workforce — Gen Z and Millennials make up 54% of the total workforce but have different expectations regarding work-life balance and career development than previous generations. Understanding the challenges of managing a multigenerational workforce becomes critical to operational success.
3. Industry 4.0 Adaptation Model
Sophisticated domestic companies and many foreign-invested enterprises are adopting this advanced approach, creating a foundation for long-term success. These businesses strategically deploy automation, robotics and data throughout their operations. VinFast’s smart factory uses about 1,200 welding robots, or Samsung Vietnam also invests heavily in technology.
These companies are focused on developing a highly skilled workforce of technicians, engineers, and digital experts. Samsung Vietnam has trained around 6,500 students and teachers through its Innovation Campus program. VinFast has built a dedicated training center to produce workers capable of operating Industry 4.0 facilities.
These companies continuously invest in upgrading the skills of their employees through specialized training centers or partnerships with schools. They create clear career paths — Schneider Electric Vietnam allows technical experts to advance without leaving their technical roles. They use data to plan human resource needs, manage talent, and improve efficiency, while building a strong employer brand to attract top talent.
4. Key factors driving the change in human resource models
Four major changes are forcing Vietnamese manufacturers to reconsider their human resource characteristics, each creating both immediate challenges and long-term opportunities to gain competitive advantage.
The breakthrough of Industry 4.0 fundamentally changes job requirements. The World Economic Forum predicts that 50% of manufacturing jobs will require new skills and techniques by 2025. Skills shortages are a major competitive issue.
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The challenge of skills shortages has become a major obstacle. McKinsey & Company points out “structural challenges” in Vietnam’s manufacturing industry, especially in terms of labor quality and technology application. Without systemic action, Vietnam could face 2.1 million unfilled manufacturing jobs by 2030 due to a widening skills gap.
High turnover disrupts production and impacts quality. This instability increases recruitment costs and reduces operational efficiency.
Changing expectations of generations of workers add to the complexity. Ms. Tieu Yen Trinh, CEO of Talentnet, stressed that “an effective transformation strategy must be rooted in the company’s purpose and needs… it is essential to maintain consistency in purpose but be flexible in approach.” With 70% of Gen Z workers likely to avoid traditional manufacturing jobs, businesses must adapt their work culture and career opportunities to attract young talent.
The future of success belongs to businesses that see people as their core assets, investing smartly in skills, engagement, and adaptability.
Start by assessing your current workforce model against industry requirements and business goals. From there, identify key areas for investment: employment agency vietnam, targeted training, employee-empowering technology, and more efficient talent management processes. Explore workforce ecosystem management strategies to navigate these complex changes. Contact us to know more about it!
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