HR paramount for developing logistics

Nguyen Tuong, deputy secretary general of the Vietnam Logistics Business Association

Vietnam’s logistics sector is working to achieve the goals set in the prime minister’s Decision No.200/QD-TTg issued in 2017, approving the action plan to increase the competitiveness and development of logistics by 2025.

Accordingly, the country aims to increase the logistics sector’s GDP contribution to 8-10 per cent by 2025, with a growth of logistics services at 15-20 per cent, logistics outsourcing at 50-60 per cent, and to reduce logistics fees to 16-20 per cent of GDP, among others. To obtain the goals amid the wide influence of Industry 4.0, the logistics sector needs to boost sci-tech application such as transport, warehouse, and forwarding management systems, as well as CargoWise One, blockchain, cloud logistics, big data, and AI. Moreover, a strong focus should be on training and development of qualified human resources in terms of skills, professionalism, and English proficiency.

HR training – urgent task

Vietnam’s logistics sector has around 4,000 firms providing international and domestic services. Of them, over 90 per cent are small- and medium-sized enterprises (SMEs), providing all kinds of services, including third-party and fourth-party logistics. However, they still have limited capacities, as well as lack advanced management skills and qualified manpower.

According to a survey by the Vietnam Logistics Business Association (VLA) conducted in 2016, to meet HR demands among logistics businesses, they need to train around 250,000 new personnel by 2030.

As shown in the VLA’s White Book 2018, regarding the qualifications and skills of staff working at Vietnamese logistics companies, over 45 per cent have qualifications and experience assessed at “good”. However, logistics businesses are still facing a challenge in attracting highly-qualified staff.

A recent survey on IT professionalism and foreign language proficiency shows that only 29 per cent of staff are assessed at “good”, and over 41 per cent are ranked “fair”. Various soft skills are required in the logistics sector, including negotiation and signing of contracts, document texting, teamwork, as well as conflict resolution, and others.

It is forecast that the demand for labour recruitment among logistics service providers in the next five years will continue to increase.

The survey shows that 44.5 per cent of businesses plan to recruit an additional 11-50 employees in the next five years, or an average number of around 10 a year, while 26.4 per cent will recruit less than 10 people in the next five years per business, or averagely around two annually.

Only 16.9 per cent of surveyed businesses need to recruit an additional 51-100 people in the next five years, or over 10 a year on average. Meanwhile, 5 per cent plan to recruit an additional 100-200 headcounts.

Future solutions

To meet the sector’s development demands, the training of high-quality HR should focus on four main issues. The first is that the subjects of training should be classified to not only help domestic demands but also enable people to work abroad, especially in the ASEAN Economic Community.

Second, the training should concentrate on professionalism at universities and vocational training schools; boost co-operation between domestic training establishments and logistics businesses with international training partners; and strengthen co-operation between training establishments and businesses.

Third, logistics training programmes should be applied in line with those of the International Federation of Freight Forwarders Association, which includes 14 modules, in combination with training programmes of the ASEAN Federation of Forwarders Association, and other training programmes. Training methods should combine training at schools, and universities with on site-training, integrating logistics-related sci-tech training programmes into the university curriculum.

In this view, the VLA has so far signed co-operation agreements on training with 12 universities and academies. Moreover, it signed collective agreements between 11 training schools and 18 logistics businesses to discuss the training requirements and the number of needed labourers.

In order to create more favourable conditions for universities in logistics training, the Ministry of Education and Training (MoET) should regulate the logistics training code, instead of including it in the code of industrial management as ruled in Circular No.24/2017/TT-BGDDT and Circular No.25/2017/TT-BGDDT, both from 2017, on level-four classification of education and training for university/college degree and master and doctor’s degrees.

At present, the government spends a certain amount of state budget on HR training for SMEs. The government should consider setting aside a sum annually for university training in logistics to facilitate HR training. There should be close co-ordination between the MoET, the Ministry of Science and Technology, and the VLA in training of highly-qualified HR, while increasing public awareness.

The country should also pay more attention to developing an e-platform for logistics training. Meanwhile, logistics businesses should have plans to use highly-qualified HR in a more effective manner, while developing formal training programmes and creating jobs for graduates.