Difficulty of Hiring Index    11
 
Rigidity of Hours Index    13

Difficulty of Firing Index    40

Rigidity of Employment Index   21

Redundancy cost (weeks of wages)  87 
 
Each index assigns values between 0 and 100, with higher values representing more rigid regulations. The Rigidity of Employment Index is an average of the other three indices.

Deloitte Touche Tomatsu says one of Vietnam’s great attractions for foreign investors has been its inexpensive and relatively high-quality labour force.

“Nevertheless, there is a mismatch between supply and demand for skilled workers,” it says. The population is highly literate, but mostly unskilled.  Around four-fifths of the labour force is considered to be unskilled (meaning they have not received vocational or tertiary education). Employers are increasingly concerned about shortages of skilled workers.

Enterprises in Vietnam are allowed to recruit Vietnamese employees directly or through a delegated recruitment centre. STT Audit and Advisory Partnership in Hanoi advises enterprises to advertise the position in the local and national media before recruiting.

After the employment contract is confirmed, enterprises must arrange the contribution of compulsory social and health insurance for local nationals in any type of employment of more than three months.

Deloitte Touche Tohmatsu says trade unions are a powerful political and economic force in Vietnam. All foreign-investment enterprises (FIEs) are required to recognise a union that represents their employees. The sole recognised trade union, the Vietnam General Confederation of Labour (VGCL), monitors conditions and walkouts.

Since non-compliance with existing labour agreements is a frequent cause of disputes, a consultation with union leaders regarding contract details may go some way towards preventing disputes.

Where highly technical, managerial or other qualifications are required, and no Vietnamese personnel are available, STT Audit and Advisory Partnership says enterprises may recruit expatriates.

A foreign employee working in Vietnam for three months or more must obtain a work permit from the local labour department.

Exemptions include employees hired to deal with emergencies.

Foreign employees hired by domestic enterprises, SOEs and FIEs can be no more than 3 percent of an enterprise’s total number of employees, says Deloitte Touche Tohmatsu. Other employers, including foreign representative and branch offices and foreign contractors, are not subject to this limit, but approval from the chairman of the provincial or municipal People’s Committee is required to employ foreigners.

All employers in Vietnam wishing to recruit foreign employees must advertise in three consecutive issues of a central or local newspaper.

Managers, executives and specialists of service providers who relocate to Vietnam as “intra-corporate transferees” can stay for an initial three years, which may be extended.

Foreigners with a work permit can apply for a temporary resident card, which can be used as a multiple-entry visa to travel in and out of Vietnam.

(Additional sources used on this page:  STT Audit and Advisory Partnership, Deloitte Touche Tohmatsu)