Last year's global economic unrest led to a decrease in employment demand worldwide that was coupled with a marked rise in production and business costs. Vietnam witnessed a significant impact due to the downturn experienced in two major sectors, the real estate market and corporate bonds. The challenges these sectors face have led to reduced capital absorption by businesses and an escalating trend in bad debts, among other difficulties.

Within the first 10 months of 2023, the country had witnessed the establishment and return to operation of more than 183,500 new businesses, marking an almost 3 per cent increase on-year. However, the number of businesses withdrawing from the market was over 146,500, seeing a rise of 20 per cent.

Despite the challenges, Vietnam’s economy is on a positive trajectory, supported by a series of measures from the government. According to the assessment from the Ministry of Planning and Investment, all three drivers - investment, exports, and consumption - show promising growth potential in the year ahead. Exports in particular are gradually gaining momentum since the end of last year. Retail and consumption are approaching double-digit growth, and the investment sector shows favourable opportunities in state and private investment, as well as from overseas, especially in emerging areas like renewable energy and semiconductors.

Adecco Vietnam’s survey reveals caution, however, with 74 per cent of businesses expecting limited-to-modest growth in 2024. In addition to the 37 per cent that plan to maintain their workforce size, a further 35 per cent intend to increase headcount by less than 25 per cent. Businesses in retail, education, and IT have plans to increase recruitment more significantly.

Nevertheless, 18 per cent of firms surveyed plan to cut down their workforce, an 8 per cent increase compared to the start of 2023, primarily in manufacturing and real estate.

The top priority for recruiters is candidates with change management and leadership skills, as chosen by 47 per cent of surveyed employers, with technological and digital skills also highly valued.

From the perspective of employees, the unpredictable job market has increased caution in searching for new opportunities. According to the survey, 29 per cent have no intention of changing jobs, while 36 per cent are open to new opportunities but not actively seeking new employment in the next 12 months.

Compared to last year's survey, where salary was chosen as the most important factor by a significant margin, it was opportunities for development, along with welfare benefits, listed as most prized by employees.

While analysing the top factors contributing to the movement of talent across the Asia-Pacific region, compensation and benefits also emerged as the most significant factor, with 67 per cent choosing it as their primary consideration when switching roles. In comparison to other countries within the region, Vietnam, at 57 per cent, lags more expensive locations, such as Hong Kong (88 per cent), Singapore (82 per cent), and South Korea (78 per cent).

Consequently, salary expectations across Asia-Pacific are high. In reality, Vietnam leads with 23 per cent of respondents, followed by India at 21 per cent, receiving a salary increase of over 20 per cent in their current roles. In contrast, when changing employers, a significant 46 per cent in Vietnam and 91 per cent in India expect a base salary increase of over 20 per cent.

Given such high salary expectations, organisations need to relook their pay strategies for 2024. Aligning employee salaries with market demands will be crucial to enticing and retaining top talent.