Human Resource Management in Vietnam toward Industry 4.

1. Definition of Industry 4.0

It is the Industry 4.0 that is regarded as “a name for the current trend
of automation and data exchange in manufacturing technologies. It
includes cyber-physical systems, the Internet of things, cloud
computing and cognitive computing”. In other words, it refers to the 4th industrial
revolution, coming after the earlier waves of mechanization of production using
steam power, mass production powered by electric motors and digital revolution
with electronics and IT used to further automate production.

2. Human resources as a key driver

According to a press conference held in Hanoi from 26 to 28 April 2017 to

introduce the Viet Nam Manufacturing Expo 2017 (VNM), human resources will
be a fundamental driver in manufacturing enterprises becoming Industry 4.0
players. Moreover, Isara Burintramart, managing director of Thailand’s Reed
Tradex Co., said that other drivers of the Industry 4.0 trend will be “government
support, data analytics and economic management”. Indeed, he believes that the
industrial workforce is one of the elements making Vietnam a destination of great
potential to foreign investors and ready to learn, step into the Industry 4.0 era. He
stated “The best way to approach the 4.0 revolution is to do it in small steps,
starting with a strategy or a pilot project”.

Apparently, the most important task for local manufacturers to be taken is

investing in human resources. By executing this task, it will help to take advantage
of and keep updated about the fourth industrial revolution or industry 4, enhance
technical innovation and strengthen co-operation among businesses in order to
maximize efficiency and avoid overlapping investments. In fact, Nguyễn Văn Thụ,
Chairman of the Viet Nam Association of Mechanical Industry, stated that a
number of Vietnamese businesses, especially those in the automobile, agricultural
machinery and design industries, have moving to Industry 4.0 with efficient
investments in technological innovation. For instance, Trường Hải Auto Corp has
developed a comprehensive business plan in constructing the Chu Lai-Trường Hải
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Automoile Mechanical Industrial Zone which will be open or begin operations in
2018. It is the company that has expanded investments in laser welding technology
and the latest paint technology, expecting its annual capacity to reach 100,000 cars,
100,000 trucks and 5,000 buses.

Many experts contend that firms need valuable labors with professional skills,
especially those developing and designing products, to boost their productivity.
This fact will certainly create big opportunities for Vietnamese institutes. One
particular example of co-operation between enterprises and training institutes is the
partnership between the Vietbay Company, specializing in software distribution
and information and technology professional services, Siemens Industry product
lifecycle management and three universities - Military Technical Academy of Viet
Nam, School of Mechanical Engineering under Hanoi’s University of Science and
Technology and University of Transport Technology. According to Võ Hồng Kỳ,
director of Siemens Industry product lifecycle management, the collaboration aims
to upgrade competency, quality of graduates and offer them post-graduate job
opportunities and to improve lecturers’ abilities. In fact, this co-operation is
expected to provide high-quality human resources for the engineering sector.

As a result, managers in general should focus on finding more effective ways to

retain their most helpful employees with long- lasting loyalty. It is suggested that
human resource managers should make reasonable personnel policies, provide
motivation with attractive rewards and create a comfortable and united working
environment for all members of their organizations.

3. Challenges towards human resource management in Vietnamese businesses

Undoubtedly, the management of human resources is always considered as an

important part of any group and enterprise because it has a crucial impact on the
survival and development of the organizations. It is the management that has been
planned specifically on various theories. Nevertheless, when going into practice,
human resources management has to confront many challenges. Actually, there are
many ways to classify challenges depending on each individual. In this paper,
writer divided challenges into 3 main groups relating to external, organizational
and individual elements.

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Initially, as regards of external factors, three classical elements including
globalization, scientific, technical progress and environment are having a
widespread and profound influence on human resource management (HRM) field
in Vietnam. For instance, many multinational enterprises having headquarters in
Vietnam like KFC, Lotteria, Coca-cola, Starbucks and Pepsi face disputes in
managing human resources due to geographic distance and culture differences.
Expatriate managers may find it is actually not easy to apply Western countries’
management plans in Vietnam since they will need a long time to comprehend
thoroughly the customs, and working styles of employees of this country. They are
advice to “think global, act local” for succeeding in a totally new environment.

Secondly, scientific and technological progress is the next factor affecting the
management of people in Vietnam. Along with this trend, new science and modern
technology have created challenges for companies. For the survival and
development, firms have to catch up with and invest in modern facilities.
Therefore, the managers are suggested to be extremely careful in selecting right
employees who are capable of adapting to new science, advanced technology and
new ambiance, as well as retraining their work forces. 
Lastly, environment is the last external factor. As our society flourishes, more and
more attention are attracted from the environmental issues. HRM becomes more
complicated due to the complexity of the environment. Vietnam is a developing
countries, therefore, the industry is concentrated the most. Accordingly, industrial
enterprise has negative impacts on the environment. The most one is the pollution.
Hence, enterprises will have to upgrade and invest in environment-friendly
facilities which always require special skills to operate. The impact of environment
element in some ways is similar to that of scientific and technological progress
because HRM has to confront both factors with the ability to rotate or retrain the
employees in order to adapt to the change in new modern equipment.
In terms of organizational element, as being mentioned above, competent staff who
are considered as the most valuable treasure of any company will have to be kept
by managers having good leadership skill.
On the subject of the challenge relating to individual, productivity and brain drain
are two typical elements. Vietnam is acknowledged as a nation that has abundant
work force. However, their skills are not high enough, especially in design and
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creativity field of engineering sector which plays a crucial role in the development
of support industries. It is proved that productivities in the Vietnam work force are
still quite low. Owing to this fact, managers should have the competence of
rotating, recruiting outstanding people with high practical skills from the labor
force in Vietnam that used to be considered as a low yield labor market.
4. Conclusion
In conclusion, although the human resources of Vietnam are plentiful in quantity,
they still need to be reinforced in quality. Indeed, Nguyen Van Thu believes that to
have a feasible engineering industry development policy in the era of Industry 4.0,
Vietnam are in need of taking various measures simultaneously. Specifically, it
should decentralize the approval of state-funded projects designed to build new
mechanical manufacturing facilities and upgrade existing ones. The partial
privatization of state-owned engineering businesses is suggested to be enhanced.
Furthermore, engineering businesses particularly should be stimulated to invest in
new technologies to create quality products at reasonable costs to substitute for
imported products. Last but not least, enterprises should be encouraged to pay
greater attention to human resources training to obtain more high skilled staffs.

References:
1, Dr Ehambaranathan, E, Samie, A, Murugasu, S 2014, ‘The Recent Challenges of
Globalization and the Role of Employee Engagement – The Case of Vietnam’,
International Journal of Human Resource Studies, vol. 5, no. 1, pp.5-6.
2, Vietnam Economic News 2017, Is Vietnam’s workforce ready for Industry 4.0
era?, viewed 21 July 2017, <http://ven.vn/is-vietnams-workforce-ready-for-
industry-40-era-26389.html>.
3, Vietnam news 2017, Human resources to drive Industry 4.0, viewed 21 July
2017,<http://vietnamnews.vn/economy/373429/human-resources-to-drive-
industry-40.html#YW1Xr72z7QBfVakB.97>.