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Vietnam - Youth struggle to find jobs in slow economy

30 December 2013

Many companies reportedly struggle to find skilled labourers. The country's transformation into a successful middle-income status cannot be guaranteed without increasing the skills of the workforce to meet new demands.

According to the General Statistics Office, there were at least 1 million unemployed people during the first nine months of 2013. Nationwide, young people (15-24 years old) accounted for 6%, though youth unemployment in urban areas reached 10.8%.

Viet Nam News talked to a group of experts about these issues:

  • Nguyen Van Chien, Centre for Forecasting Manpower Needs and Labour Market Information, Viet Nam Institute of Educational Sciences
  • Christian Bodewig, chief author of the World Bank's Viet Nam Development Report 2014, comments on preparing the workforce for a modern market economy
  • Tran Thi Tuyet, lecturer, University of Languages and International Studies, Viet Nam National University, Ha Noi
  • Jonah Levey, founder and chairman of Vietnamworks

Many Vietnamese degree-holders reportedly can't find jobs these days due to economic woes, but also lack skills for available jobs. How can you assess this problem?

Nguyen Van Chien: The difference between rural and urban areas lies in the fact that temporary jobs are more readily available in rural areas, since there are more options for people to choose, for example by engaging in family businesses, such as farming or planting. In addition, the youth in urban areas tend to be quite "picky" in choosing a job. They are less likely to take jobs that are not "highly valued", such as manual labour, even at the risk of being unemployed.

Because of the economic woes, unemployment is seen almost everywhere and it's a risk to every individual. Plus, there has been a surplus of graduates of university level or above in certain sectors, especially in educational and social science sectors. Many university graduates fail to find a job, so they continue to study further to get higher degrees, hoping to raise the chance of getting a job upon graduation.

Such decisions are easy to understand, as Vietnamese people tend to think highly of academic certificates and they often think having a good academic profile will be an advantage in finding a job. But the problem lies in a failure in career orientations.

Christian Bodewig : Youth unemployment is a global phenomenon and there are many countries around the world, including emerging economies, where youth unemployment is a much more alarming problem than in Viet Nam. Take southern Europe, for example, where more than half of all young people are without jobs. In Viet Nam, the situation is much better.

But it is not perfect, either. We can increasingly observe a duality associated with educational attainment and location.

While well-educated workers are taking advantage of expanding opportunities in the private sector, especially in urban areas, less educated workers, and particularly those in rural areas, are having more difficulties. Less educated workers and youths from rural areas have more difficulties transitioning into the expanding private sector, and are often left in the agricultural sector or in informal employment. That, surprisingly, includes higher education graduates in rural areas, some of whom end up working on farms.

Tran Thi Tuyet: Both the employment market and Vietnamese higher education are in transitional phases of the economy, from the centrally planned to the market-driven economy. In that transitional period, poor communications and a lack of understanding between the two create more frustration for recent graduates, who seek ways to enter the employment market. These young people, who receive little information about the employment market during their university time, are wobbling around to find ways to enter the labour force.

Stories of corruption, luck, of poor skills they possess, together with the desire to maintain face for the whole family, earn money right after graduation, and find work and stay in the big cities, adds much more nervousness for recent graduates. Yet, the under-employment and unemployment of recent graduates does not seem be the result of only the poor quality of training in higher education.

While companies struggle to recruit enough low-skilled workers, many young Vietnamese feel that if they can't find jobs, they should continue their studies. How can we address this imbalance?

Chien: Not all sectors and companies need workers with a Master's degree. They are simply looking for those with the skills they need. People should think of what the labour market needs to choose their career path wisely. Pursuing a master's or doctorate degree is not always the best option for someone hoping to find a job at present.

Sometimes, having a higher degree may be a disadvantage, if you apply to work for a position that does not require such high degrees. In such a case, the employer might not need someone with a high degree and is incapable of providing a higher salary just because someone is overqualified in terms of their academic background.

This all leads to the importance of career orientation, which should be paid attention to since high school. Each person should consider carefully which profession is suitable for them, in terms of personal preference and strengths, as well as the actual market demands. In moving towards successful career orientation, the involvement of families, society and sectors is needed. Research and forecasting work for human resources demands in different sectors is also important to help training institutes consider and set suitable enrolment quotas, thereby preventing the waste of time and money spent on those pursuing unsuitable professions or professions that are not in great demand.

Bodewig: First of all, the Vietnamese labour market offers lots of opportunities. Unlike many countries around the world today, Viet Nam does not suffer from a low labour demand; its employers are seeking workers, but they cannot find workers that match their skill needs. Employers in urban areas told us that they do not have enough applications for jobs in blue collar occupations, such as machine operators, while those graduates that apply for white collar occupations often do not bring the skills that employers want.

For example, they mention practical, job-related technical skills and other skills, such as critical thinking and good team and communication skills. Employers feel that the education system today turns out graduates without these skills. This is where reforms are needed.

But let me be clear: it is still a very good decision to enrol in higher education. Higher education graduates command much higher wages than graduates from lower levels of education and, some reports about graduate unemployment notwithstanding, many graduates have great job opportunities.

However, it's also clear from our research that not just any higher education degree from any university will guarantee success. Students should be very choosy and learn much about the quality of universities and programmes, and job prospects upon graduation.

Levey: Based on our survey of 200 employers, the most important thing that hiring managers care about when considering an application is working experience relevant to the vacancy. None of the employers surveyed chose "relevant education" as the most important criteria to evaluate a candidate.

Vietnamese job seekers, regardless of having studied overseas, should focus on developing transferable skills and working experience that is required for their dream jobs. Simply having a degree from a good university will not be enough to attract recruiters.

The best job seekers have to be able to explain in their CV why they are the correct person for the job, and how their achievements and experience will support them to contribute to the success of the company they are applying to.

There is no question about the importance of a good quality education. It is, however, just one of the key factors that employers consider in hiring applicants for their respective organisations. There are costing, job fit, and experience, among many others, that are also carefully considered by hiring managers. These factors differ on a case to case basis, based upon the recruitment demands and strategies that each company requires.

As the country enters a new era of development, do we need to approach youth unemployment and skill training differently?

Tuyet: The Vietnamese Government has also recognised the mismatch between higher education training and the employment market. It has been stipulated in numerous documents, policies, plans and resolutions which aim to increase the training quality in universities and reinforce the central mission of higher education, which is to provide a high-skilled workforce for the development of the country.

It is suggested that not only universities, students and their families, but also employers, need to make greater efforts to bridge the divide between higher education and the labour market. Universities cannot ‘bring the market' into their curriculum and shorten the learning curve in the transition for their students if employers do not cooperate and participate. The collaboration between universities and employers will bring mutual benefit.

A higher education-employer interactive module should be developed. Students will be sent to enterprises for six to eight months (a semester) for internships. In this module, enterprises will be given incentives when they become involved in the process of enhancing graduate employability by claiming tax reductions for the time and training they provide students.

By engaging with enterprises, universities can also learn more day-to-day lessons from the industry to develop more practical curriculum for their students. They can receive more input from enterprises, can invite guest speakers, or invite enterprises' leaders to be involved in creating more practical activities for their students.

Bodewig: Our assessment of adult literacy confirms that Vietnamese workers are well prepared with the basic foundational skills needed to succeed in jobs in industry and services. In fact, Viet Nam's widespread literacy has helped with enabling workers to leave agriculture for work in the more productive industrial and service sectors - one of the key drivers of the countries' remarkable growth performance over the last 25 years.

But, looking ahead, it is equally clear that Vietnamese workers in a successful middle income economy will not just have to be good readers, but also good problem solvers, critical thinkers, team workers and communicators. Employers are telling us that these skills are already high in demand today, but also in short supply.

Workers in professional occupations today tell us that their jobs involve plenty of problem-solving and communications. The future is already here. That is why we're encouraged that the Vietnamese government is taking steps to address these issues, for example, through reforming the general education curriculum and through granting more autonomy to universities to let them make their own decisions on how to best respond to employer needs.

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