Winning in Vietnam 27 th February 2009, AmCham, Sheraton Singapore Connie Ma
May 20, 2015
Winning in Vietnam 27th February 2009,
AmCham, Sheraton SingaporeConnie Ma
2© 2009 Hay Group. All Rights Reserved
Vietnamese Economy and Inflation one of the highest in Asia ( 2008 )
3© 2009 Hay Group. All Rights Reserved
Rising Salary Increase triggered by Rising Inflation in 2008/09
Source: EIU & PayNet 2008
2009 Inflation forecast average is
about 10%
4© 2009 Hay Group. All Rights Reserved
Salary Movements - Sector
Compensation Challenges
6© 2009 Hay Group. All Rights Reserved
Pay Differentials (Vietnam=1)
Source: Hay Group PayNet, 2008
1.5 1.6
2.0
5.35.5
1.3 1.21.5
3.8
4.3
1.31.1 1.2
2.3
3.2
1.41.1 1.0
1.8
3.0
0.0
1.0
2.0
3.0
4.0
5.0
6.0
China India Malaysia Singapore Hong Kong
Clerical/Production
Junior Management
Middle Management
Senior Management
Ratio of Guaranteed Cash
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Lower job
Higher job
1 Step : „Career Ladder‟ Promotion
“The logical next step”
Lower job
Higher job
2 Steps : Normal/Solid Promotion
16
15
14
13
12
Hay
Group
Level
Lower job
3 Steps : Risky Promotion
Higher job
Why job “steps” matter?
Hay Group Salary Survey 2008 shows that Pay progression from one job to the next inmiddle management is 44% for Vietnam
9© 2009 Hay Group. All Rights Reserved
Pay progression comparison (1 Step Pay Difference)
Source: Hay Group PayNet, 2008
11%
19%
22%
30%
18%
31%
23%
35%
17%15%
24%
30%
33%
40%
44%
28%
20%
12%
22%
27%28%
36%
28%
31%
-10%
0%
10%
20%
30%
40%
50%
60%
Australia Japan Singapore Hong Kong Malaysia China Vietnam India
Pay P
rog
ressio
n a
cro
ss e
ach
man
ag
em
en
t le
vel
Comparison - Base Salary
Junior Management Middle Management Senior Management
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1 step difference – middle management-by Job Families
Source: Hay Group PayNet, 2008
44%
94%
80%
64%
57% 56%53% 52% 52%
42%
29%25% 25%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
All Orgs Legal Corp. Affairs
IT Eng H & E Admin Mkt Sales Prod Logistic HR F&A
All Orgs Legal Corp. Affairs IT Eng H & E Admin Mkt Sales Prod Logistic HR F&A
Average Base Salary
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2 steps difference
China
Internal Pay Grade Structure - Median of Market w ith +/- 25% spread
Base Salary Policy
Benchmarked against China 1st Tiers WOFEs-
Data from 212 companies
November 2007
P90
P75
P25
P10
MD
0
200,000
400,000
600,000
800,000
1,000,000
1,200,000
200 300 400 500 600 700 800 900 1000
Hay Point
CNY
Average 2 Steps Pay
Progression is 83%
HRL16
HRL 15
HRL 17
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2 steps difference – middle management-by Job Families
Source: Hay Group PayNet, 2008
83%
117%113%
99%94%
83%79%
69% 68% 68% 66% 65%
42%38% 36%
0%
20%
40%
60%
80%
100%
120%
140%
All Orgs Sales H & E Cust Svcs
Logistic IT Eng QA HR F&A Prod Mkt Project Mgt
Corp. Affairs
Admin
All Orgs Sales H & E Cust Svcs Logistic IT Eng QA HR F&A Prod Mkt Project Mgt Corp. Affairs Admin
13© 2009 Hay Group. All Rights Reserved
Average age of employees working for MNCs in Vietnam
On average, senior
managers in Vietnam
are 5 years younger
than their Asian
counterparts
14© 2009 Hay Group. All Rights Reserved
Average age of employees working for MNCs – Junior to middle management
15© 2009 Hay Group. All Rights Reserved
Average age of employees working for MNCs – Middle to Senior Management
How are companies coping with Vietnam’s business environment?
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Successful companies managed their compensation practices better
Top 3 differences between high & low performing companies
Source: Hay Group‟s Winning in Vietnam report, 2008
25%
13%
38%
59%
70%
70%
0% 10% 20% 30% 40% 50% 60% 70% 80%
Establish a clear link between individuals‟ compensation and
performance
Develop an effective incentive plan for Managers
Implement the right combination of variable and fixed remuneration
High Performer Low Performer
Largest Gap
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Six Challenges faced in Vietnam
Source: Winning in Vietnam, 2008
49%
84%
72%
79%
73%
71%
54%
46%
44%
65%
55%
54%
0% 90%How well is your firm coping with this issue?
How significant is this to your firm's operation?
Differences in Culture
Shortage of local
management talent
Shortage of skilled
Vietnamese workers
Fierce competition in
Vietnamese market
Protection of Intellectual
Property
Establishment of
government relationships
The biggest challenge is people
management
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Strategies for people management in High Performing companies
63%
70%
57%
13%
13%
13%
0% 20% 40% 60% 80%
Improve skills and competencies of managers
Develop an effective incentive compensation plan for
executives and managers
Match employees to jobs based on required competencies
Low Performing
High Performing
Source: Winning in Vietnam, 2008
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Organizations’ biggest concerns:
The New PIT implemented in January 2009
1. Retaining Top Talent / Critical Skills
2. Maintaining / Affording Competitive Pay
3. Maintaining Employee Engagement / Motivation
4. Career Development / Training
5. Recruiting Top Talent / Critical Skills
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In Closing
Pay attention to your high
performers. These are the
people who build your
business. Your competitors
are eyeing them.
Thank youCảm on