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POST SURVEY

SEMINAR
th
Ha Noi – 11 October 2018
th
Ho Chi Minh - 12 October 2018
Ms. Hoa Nguyen
Senior Director, Talentnet

CONFIDENTIAL
The content of this material is intellectual property of Talentnet-Mercer and is intended to be sent to participants of Talentnet-Mercer's
Total Remuneration Survey
© Copyright 2018. All rights reserved 1 Talentnet in association with Mercer
only. Distribution of this material in any form without written consent from Talentnet-Mercer is strictly prohibited.
CONTENT

Economic
Overview
Compensatio
n & Benefits
Trends

Other Trends
© Copyright 2018. All rights reserved Talentnet in association with
Mercer
VIETNAM ECONOMIC AND POLITICAL OVERVIEW
2018 Estimated: GDP 6.9%, Inflation 4.0%
2019 Forecast: GDP 6.8%, Inflation 4.5%

Policy has been focused on further economic


liberalization and strengthening the banking sector
in order to foster a more transparent investment
environment

The Government committed to pushing on reforms


to the SOE sector, intellectual property rights, e-
commerce and the digital economy

FDI continues to be the long-term growth driver.


Currently, Vietnam has 10 free trade agreements
(FTAs) in force which play an important role in
boosting FDI inflow and Vietnamese trade
© Copyright 2018. All rights reserved 3 Talentnet in association with
Mercer
VIETNAM WORKFORCE OVERVIEW
Vietnam holds strong as a low-cost manufacturing
hub, thanks to cost-competitive but increasingly
skilled workforce

The country young, well-educated workforce


continues to grow as more young people enter the
labour market

Both local companies and MNCs are investing


heavily in aggressive talent acquisition, talent
development, and talent
retention programs

To improve labor productivity and prepare for the


future, the Government plans to strengthen the
education system, foster partnership with
enterprises to improve the match of labour
demand-supply

© Copyright 2018. All rights reserved 4 Talentnet in association with


Mercer
CONTENT
Economic Overview

Compensation &
Benefits Trends

Other Trends
© Copyright 2018. All rights reserved Talentnet in association with
Mercer
SURVEY DEMOGRAPHICS - 2018 VN TRS © Copyright 2018. All rights
reserved

602 2
Organizations Databases
(MNC & Local Co.)

16 2,651
Benchmarking
Industries positions
(by Job & PC range)
531 MNC &
71 Local Co.

314,273
Employees’ data

Talentnet in association with Mercer


2018 PARTICIPANTS’ PROFILE - MNC
Total 16 Industries
Agriculture, Big
13 Industries
Various
Manufacturing, 57
Chemicals, 55
Transportation &
Logistics, 26

Trading, 39
Consumer Goods, 80
Retail, 8
No. of
MNC Companies
Real Estate, 17
Other Industries, 24 531 Education, 10
Financial Services -
Banking, 18
Oil & Mining, 13
Financial Services -
Insurance, 19
Life Sciences, Financial Services - Non Banking,
53 13
High Tech,
86

© Copyright 2018. All rights reserved 7 Talentnet in association with


Mercer
2018 PARTICIPANTS’ PROFILE - LOCAL
2 Local Industries with good number of participants
Big
Industries
Various Manufacturing, Agriculture, 2
6 Chemicals, 1
Transportation &
Logistics, 2
Trading, 2 Consumer
Goods, 13
Retail, 7

No. of
Local Education
Companies ,3
Real Estate, 7 71

Financial Services - Banki


Other Industries, 3

Life Sciences, 3 Financial Services - Insurance,


High Tech,
4 Financial Services - Non Banking, 6

© Copyright 2018. All rights reserved 8 Talentnet in association with


Mercer
COMPENSATION &
BENEFITS TRENDS

I SALARY TRENDS

II INCENTIVES UPDATES

III
WORKFORCE PLANNING

IV
BENEFITS TRENDS
© Copyright 2018. All rights reserved 9 Talentnet in association with
Mercer
QUESTION

What are the


SALARY INCREASES
in
2018 & 2019?
© Copyright 2018. All rights reserved 10 Talentnet in association with
Mercer
SALARY INCREASE TREND (ACTUAL VS FORECAST) - MNC

10.6%
2015
9.4%

Foreca
9.6% st
2016
8.9% Actual

9.2%
2017
8.5%
© Copyright 2018. All rights reserved 11 Talentnet in association with
Mercer
SALARY INCREASE TREND (ACTUAL VS FORECAST) - LOCAL

10.9%
2015
9.7%

Foreca
10.2% st
2016
9.3% Actual

9.6%
2017
8.9%
© Copyright 2018. All rights reserved 12 Talentnet in association with
Mercer
SALARY INCREASE IN 2018

FORECAST from ACTUAL


TRS 2017 from
TRS 2018

MNC 8.7% 8.6%

LOCAL 8.8% 9.0%


© Copyright 2018. All rights reserved 13 Talentnet in association with
Mercer
SALARY INCREASE TREND
Inflation GDP Growth MNC Local

9.9% 9.7%
9.0%
8.7% 8.6% 8.6%
9.4%
9.0% 8.6% 8.5% 8.6% 8.7%

6.7% 6.8% 6.9% 6.8%


6.0% 6.2%
4.5%
4.0%
4.1% 3.5%
2.7%
2.1%

2015 2016 2017 2018 2019 (forecast)

Source: #Asian Development Bank;


#General Statistics Office
© Copyright 2018. All rights reserved 14 Talentnet in association with
Mercer
2018 SALARY INCREASE TREND - TOP 3 & BOTTOM 3 - MNC

TOP 3 INDUSTRIES BOTTOM 3 INDUSTRIES

1 High Tech 9.7% 3 Education 7.1%

2 Life Sciences 9.1% 2 FS – Banking 6.5%

3 Chemicals 9.0% 1 Oil & Mining 5.8%


© Copyright 2018. All rights reserved 15 Talentnet in association with
Mercer
MARKET MOVEMENT - SAME COMPANIES - MNC
Annual Base Salary (COMP 1)
Unit: ’000
2,000,00 VND
0
June- +8
18 Management
1,500,00 June-
%
0 17 +4%

1,000,00
0 Profession
al
+7
%
Para-
500,000 professional
+12%

0
5
40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 7
Position Class

© Copyright 2018. All rights reserved 16 Talentnet in association with


Mercer
MARKET MOVEMENT - SAME COMPANIES - LOCAL
Annual Base Salary (COMP 1)
Unit: ’000
2,000,00 VND
0
June-
18 Manageme
1,500,00 June- +13% nt
0 17
+13%
1,000,00
0
Professional
+13
%
Para-
500,000 professional
+12%

0
5
40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 7
Position Class

© Copyright 2018. All rights reserved 17 Talentnet in association with


Mercer
AVERAGE INDIVIDUAL PROMOTION SALARY INCREASE - 2018
23.0%
22.1%
20.0%
18.8%

15.0% 15.0%

MNC
Local

P25 P50 P75


© Copyright 2018. All rights reserved 18 Talentnet in association with
Mercer
SALARY PREMIUM FOR RECRUITING STAFF

How much more (as % of salary) has


your firm paid to Outside Talents to join
your +9%+15%
firm at the Same Level of Job?

How much more (as % of salary) has


your firm paid to Outside Talents to join your +14% +20%
firm at Higher Level of Job?
Source: 2018 Mercer Vietnam Pulse Survey
© Copyright 2018. All rights reserved 19 Talentnet in association with
Mercer
QUESTION

How much is the


PAY DIFFERENCE
between
MNC & LOCAL?
© Copyright 2018. All rights reserved 20 Talentnet in association with
Mercer
PAY DIFFERENCE BETWEEN LOCAL COMPANIES AND MNCs
Annual Base Salary (COMP 1)
2,500,00 Unit: ’000 VND
0

2,000,00 Managem
0 MNC -25% ent
Loca
l -34%
1,500,00
0

1,000,00 Profession
al
0
-26%
Para-
professional
500,000
-14%

0
40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57

Position Class
© Copyright 2018. All rights reserved 21 Talentnet in association with
Mercer
PAY DIFFERENCE BETWEEN LOCAL COMPANIES AND MNCs
Annual Total Cash (COMP 3 Actual)
2,500,00 Unit: ’000 VND
0
Managem
ent
2,000,00 MNC -31%
0 Loca -20%
l
1,500,00
0
Profession
al
1,000,00 -21%
0
Para-
professional
500,000
-7%

0
40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57

Position Class
© Copyright 2018. All rights reserved 22 Talentnet in association with
Mercer
QUESTION

What are the


INDUSTRIES that
pay premium and
vice versa?
© Copyright 2018. All rights reserved 23 Talentnet in association with
Mercer
PAY DIFFERENCE BY INDUSTRY - MNC
Percentage Deviation from All Percentage Deviation from All
Industries Industries
(Annual Guaranteed Cash - COMP (Annual Total Cash Actual - COMP 3 Actual)
2) 70
Oil & Mining %
68% Chemicals 9%
9% High Tech 3%
8% Life Sciences 10%
4% Consumer Goods 3%
3% Trading 4%
2% FS – Banking 0%
0% FS – Insurance -2%
0% Education -9%
-2% FS – Non Banking -3%
-7% Real Estate -4%
-8% Transportation &
-8% Logistics -13%
-14% Various
-17% Manufacturing -16%
-28% Agriculture -17%
Retail -30%
All Industries Regressed Median
All Industries Regressed Median
© Copyright 2018. All rights reserved 24 Talentnet in association with
Mercer
PAY DIFFERENCE BY INDUSTRY -
LOCAL Percentage Deviation from All
Industries
Percentage Deviation from All Industries
(Annual Total Cash Actual - COMP 3
(Annual Guaranteed Cash - COMP 2)
Actual)

19
17% Real Estate %

6% Consumer Goods -1%

FS – Banking -4%
-7%
Various
-8% Manufacturing -5%

-8% Retail -13%

-13% FS – Non Banking 2%

All Industries Regressed Median All Industries Regressed Median


© Copyright 2018. All rights reserved 25 Talentnet in association with
Mercer
QUESTION

What are
the FUNCTIONS
that get
premium paid
and vise versa?
© Copyright 2018. All rights reserved 26 Talentnet in association with
Mercer
PAY BY FUNCTIONS - TOP 3 & BOTTOM 3 – MNC - MANAGEMENT

TOP 3 BOTTOM 3

1
Gov / Public 3 Administration
Relation

Sales & Customer


2 Marketing 2 Service

Quality
3 Legal / Audit 1 Management
© Copyright 2018. All rights reserved 27 Talentnet in association with
Mercer
PAY BY FUNCTIONS - TOP 3 & BOTTOM 3 – MNC - PROFESSIONAL

TOP 3 BOTTOM 3
1 IT, Telecom & Internet 3 Customer Service

2 Engineering
2 Quality Management

3 Legal / Audit 1 Production


© Copyright 2018. All rights reserved 28 Talentnet in association with
Mercer
COMPENSATION &
BENEFITS TRENDS

I SALARY TRENDS

II INCENTIVES UPDATES

III
WORKFORCE PLANNING

IV
BENEFITS TRENDS
© Copyright 2018. All rights reserved 29 Talentnet in association with
Mercer
VARIABLE BONUS & SALES INCENTIVES
% Co have
% Co have VB % Co have SI BOTH*

MNC 86% 49% 18%

LOCAL 93% 70% 54%

*BOTH: Variable Bonus & Sales Incentive for Sales employees


© Copyright 2018. All rights reserved 30 Talentnet in association with
Mercer
QUESTION

Compared to 2017, do you


think VARIABLE BONUS
for 2018 will:
a. Increase
b. Decrease
c. Remain the same
© Copyright 2018. All rights reserved 31 Talentnet in association with
Mercer
VARIABLE BONUS TREND
VARIABLE BONUS AS % OF BASE SALARY
25% MNC
22.4%
20.4% 20.9% 20.9% Loc
19.9% al
20%

15% 16.6%
15.9% 16.1% 16.2%
15.2%

10%

5%

0%
2014 2015 2016 2017 (Actual) 2018 (Target)
© Copyright 2018. All rights reserved 32 Talentnet in association with
Mercer
TARGET 2018 VARIABLE BONUS - TOP 3 & BOTTOM 3 - MNC

TOP 3 INDUSTRIES BOTTOM 3 INDUSTRIES

FS – Non 14.2
1 Banking 25.2% 3 Retail %
13.2
2 FS – Banking 22.2% 2 Logistics %

3 FS – Insurance 21.0% 1 Education 9.0%


© Copyright 2018. All rights reserved 33 Talentnet in association with
Mercer
COMPENSATION MIX TARGET FOR 2018 - MNC
Guarantee Variable
Cash Pay
Executive 24%
76%
Management - Sales 25%
75%
Management - Non Sales 17%
83%
Professional - Sales 29
71% %

Professional - Non Sales


86% 14%

Para Professional 88% 12


%
© Copyright 2018. All rights reserved 34 Talentnet in association with
Mercer
COMPENSATION MIX TARGET FOR 2018 - LOCAL
Guarantee Variable
Cash Pay
Executive 24%
76%
Management - Sales 30
70% %

Management - Non Sales


78% 22%

Professional - Sales
70% 30%
Professional - Non Sales
82% 18%

Para Professional 77% 23%


© Copyright 2018. All rights reserved 35 Talentnet in association with
Mercer
TYPICAL FIXED ALLOWANCES PROVIDED IN THE MARKET

36%

44 Transportation
%

Phone
41
%

Meal
430,000 VND 200,000 VND 750,000 VND

700,000 VND

© Copyright 2018. All rights reserved 36 Talentnet in association with


Mercer
COMPENSATION &
BENEFITS TRENDS

I SALARY TRENDS

II INCENTIVES UPDATES

III
WORKFORCE PLANNING

IV
BENEFITS TRENDS
© Copyright 2018. All rights reserved 37 Talentnet in association with
Mercer
QUESTION

Compared to previous year, do


you think the VOLUNTARY
STAFF TURNOVER rate will:
a. Increase
b. Decrease
c. Remain the same
© Copyright 2018. All rights reserved 38 Talentnet in association with
Mercer
VOLUNTARY STAFF TURNOVER TREND
25%
20.2%
20%
17.8%
17.2% 17.0% 17.5% MNC
Loc
15% al
15.6%
13.7% 14.2% 15.1%
12.7%
10% 10.1%
H1-
2018
7.8%

5%

0%
2014 2015 2016 2017 2018 (Forecast)
© Copyright 2018. All rights reserved 39 Talentnet in association with
Mercer
VOLUNTARY STAFF TURNOVER - TOP 3 & BOTTOM 3 - MNC

TOP 3 INDUSTRIES BOTTOM 3 INDUSTRIES

1 Retail 37.6% 11.1


3 Trading %
2 FS - Banking 19.6%
2 Chemicals 9.6%
3 Real Estate 18.9%
1 Oil & Mining 3.7%
© Copyright 2018. All rights reserved 40 Talentnet in association with
Mercer
TOP 3 HOT JOBS IN 2018 - MNC

DIFFICULT TO
ATTRACT

SALES - Professional
SALES - Management
TOP 3 DIFFICULT
ENGINEERING - Professional HOT JOBS
TO RETAIN
SALES -
Professional
SALES - Management
ENGINEERING - Professional

© Copyright 2018. All rights reserved 41 Talentnet in association with


Mercer
HIRING INTENTIONS FOR 2018 - MNC

70%
63%
59%
60% 55% 55%
49%
50% Add
40% Staff
40%

30%

20%

10%

0%
2014 2015 2016 2017 2018 2019
© Copyright 2018. All rights reserved 42 Talentnet in association with
Mercer
COMPENSATION &
BENEFITS TRENDS

I SALARY TRENDS

II INCENTIVES UPDATES

III
WORKFORCE PLANNING

IV
BENEFITS TRENDS
© Copyright 2018. All rights reserved 43 Talentnet in association with
Mercer
BENEFITS SURVEY
Participant Profile

Mobility-Related Benefits
Insurances related
•Telecommuting
•AD&D Insurance
•Business Travel
•Medical Insurance
•Relocation
•Supplementary retirement
421 •Housing Benefits

PARTICIPANT
Other Benefits
Leaves related S
•Training & Development
•Working Hours & Overtime
•Leaves & Holidays
12 •Referral Programs
•Long Service Awards
•Congratulation &
INDUSTRIES
•Flexible Benefits
Condolences
•Perquisites and Loans
•Dependent Care Support
•Vehicle policies
•Termination & Redundancy
•Allowances (transport, meal, acting,
…)
© Copyright 2018. All rights reserved 44 Talentnet in association with
Mercer
TYPICAL BENEFITS
Percentage of companies provide

PRIVATE HEALTH
ACCIDENT INSURANCE
INSURANCE LIFE INSURANCE
94%
92% 61%

COMPANY CAR LOAN


44% 11%

Source: 2018 Vietnam Benefits Survey


© Copyright 2018. All rights reserved 45 Talentnet in association with
Mercer
CONTENT
Economic Overview

Compensatio
n & Benefits
Trends

Other Trends
© Copyright 2018. All rights reserved Talentnet in association with
Mercer
HR BUDGET ALLOCATION FOR 2018
Items for which HR Budget Allocation may change in 2018 compared to 2017
Base salary increase
(N=104) 50% 4% 46%

Recruitment (N=99) 34% 8% 56% 2%


Training & development
(N=100) 28% 9% 60% 3%

Health care benefits (N=98) 27% 1% 69% 3%


Short-term incentives
(N=96) 20% 7% 64% 9%
Work life balance program 19
(N=94) 17% 2% 62% %
37
Long-term incentives (N=93) 12% 2% 49% %

Would likely increase the


proportion Would likely reduce the proportion
Would likely be unchanged Not applicable
Source: 2018 Mercer Vietnam
Pulse Survey
Talentnet in association with
© Copyright 2018. All rights reserved 47 Mercer
QUESTION

How much is the


PAY DIFFERENCE
between
LOCATIONS?
© Copyright 2018. All rights reserved 48 Talentnet in association with
Mercer
PAY DIFFERENCE BY LOCATIONS – MNC – CONSUMER GOODS

Ho Chi Minh
6% City

- Ha
2% Noi

- North
5% Region

- South
7% Region

- Centre
10% Region
© Copyright 2018. All rights reserved 49 Talentnet in association with
Mercer
QUESTION

CHANGES IN
LABOUR
REGULATIONS
© Copyright 2018. All rights reserved 50 Talentnet in association with
Mercer
KEY CHANGES IN LABOUR REGULATIONS
Regional Minimum Wage

st st
From 1 From 1 %
Region
January, 2018 January, 2019 increase

Zone 1 3,980,000 4,180,000 ~5.0%


Zone 2 3,530,000 3,710,000 ~5.1%
Zone 3 3,090,000 3,250,000 ~5.2%

Zone 4 2,760,000 2,920,000 ~5.8%

As a result, the maximum insurable earning which is


capped at 20 times regional minimum wage (in
contribution to unemployment insurance) will increase
5.0% - 5.8% since 01 January 2019.
© Copyright 2018. All rights reserved 51 Talentnet in association with
Mercer
KEY CHANGES IN LABOUR REGULATIONS
Common Minimum Wage

New Common Minimum Wage

Increase 6.9% from 1,300,000


VND/month to 1,390,000 VND/month
since 01 July 2018

As a result, the maximum insurable


earning which is equal to 20 times
the common minimum wage (in
contribution to social insurance and
health insurance) was increased
6.9% from 26,000,000 VND/month to
27,800,000 VND/month since 01 July
2018
© Copyright 2018. All rights reserved 52 Talentnet in association with
Mercer
HAPPY ANNUAL SALARY REVIEW
THANK YOU
& SEE YOU NEXT YEAR
© Copyright 2018. All rights reserved 53 Talentnet in association with
Mercer