Digital era altering management of the labour market

Digital era altering management of the labour market, illustration photo

According to the Skills Revolution Reboot 2021 research released by ManpowerGroup Vietnam and the Institute of Labour and Social Sciences under the Ministry of Labour, Invalids and Social Affairs (MoLISA), Vietnam is catching up with the trends with up to 94 per cent of foreign-invested enterprises devising clear directions in enhancing the application of new technologies in manufacturing activities in the coming three years.

“Under the impact of Industry 4.0 and the pandemic, employers today take a more important role than ever in providing sustainable employment, and the human resources department should consider adopting the people-first approach in their business strategy,” said Simon Matthews, regional manager for ManpowerGroup Vietnam, Thailand, and the Middle East.

The research findings show that the top priorities of human resource professionals today include employee’s health and wellbeing (63 per cent), new work models (37 per cent), and more upskilling, learning, and development for employees (30 per cent)

According to the World Bank, the number of new jobs created by digital transformation will be seven times more than the number of jobs lost. By 2045, an estimated 10 million new jobs will be created, mainly in modern services, and a smaller number of new jobs in the manufacturing sector.

The current boom in the application of digital technology, smart devices, and robots for production is also posing many challenges to the Vietnamese labour market, with abundant and cheap labour no longer being a factor in creating competitive advantages and attracting foreign investment.

Vietnam may also be under pressure in job creation and will face an increase in unemployment or underemployment because of its large population and low quality of labour. Some 46 million untrained Vietnamese workers will face the risk of not having the opportunity to participate in high-income jobs, being replaced by robot labour and smart technology equipment, ManpowerGroup said.

Vietnam is a country with a labour force in its golden age. In 2020, the national labour force was about 54.8 million people; the labour force participation rate was 74.4 per cent. Securing jobs and enhancing skills for workers in the context of digital transformation is one of the important goals of every country, especially a developing country with a large workforce like Vietnam.

Le VanThanh, Deputy Minister of MoLISA, said the pandemic has forced the labour and employment sector to be more prepared, to change most of the way it operates in the direction of modernity and digitalisation.

“MoLISA and its units in recent years have focused on implementing many solutions, including the application of technology and digitalisation in connecting labour supply and demand, strengthening the consulting and job introduction activities of employment service centres across the country, as well as giving priority to improving vocational skills for workers to meet new requirements,” Thanh said.

In recent years, the government has also made efforts to adopt national-level initiatives and policies to facilitate digital transformation, including Decision No.749/QD-TTG dated June 2020 on the National Digital Transformation programme to 2025, with orientation to 2030. In February, the prime minister issued Decision No.176/QD-TTg on the programme to support the development of the labour market until 2030.

In addition, Vietnam is also implementing a project to apply IT in managing the labour market and connecting workers with suitable jobs. The project aims to apply IT to improve the capacity and efficiency of state management, forming a unified national database of employees connected to the Vietnam Social Security and national population databases, contributing to the development of the labour market and formation of an e-government.

Vietnam’s labour market has shown positive signs in recent years. The rate of workers with degrees and certificates from elementary level and higher has continuously increased over the years, and is currently at 26.1 per cent.

Vietnam’s workforce increased from 50.4 million in 2010 to 56.2 million in 2020 and the rate of trained employees rose from 40 per cent in 2010 to about 65 per cent last year. High-calibre human resources have been developed considerably as several sectors, such as health, mechanics, technology, and construction, have reached regional and international standards.