Prudent staff retention amid price turbulence

Nguyen Thi Van Anh

With the economy slowing, inflation heating up and on a squeeze on the supply of skilled labour, firms are advised to spotlight nurturing their image as good employers to retain talent. Nguyen Thi Van Anh, managing director of Vietnam’s leading executive recruitment firm Navigos Search (formerly known as Navigos Group) discusses this issue with VIR.

Vietnam-based firms are facing severe difficulties as they did when the economic crisis hit a few years ago, problems like rampaging inflation, tightened credit and a consumption slowdown. Have you observed the labour market is also performing similarly with firms slashing payrolls?

This is not the case. Indeed at Navigos Search we are still receiving increasing orders for us to find senior executives and experienced professionals as employers are still struggling to fill in this recruitment gap, especially in the banking and finance and high-tech industries. Many employers are willing to pay dearly to get those qualified staff - even companies that are also facing the difficulties you mentioned.

Senior personnel are continuing to job-hop among Vietnam-based companies. Do you think the desire for higher pay is the key issue, particularly considering rising inflation?

Seeking a higher income is certainly one of the main causes of senior executives moving between companies, with high inflation contributing to their decision-making. In a dynamic and competitive market like Vietnam, the battle for talent has been there for years and is getting fiercer over time. My observations suggest many companies are attracting talented people by offering higher salaries and bonuses.

However, inflation cannot be treated like long-term problem and it is not prudent for employers to raise salaries every time inflation gets heated. Meanwhile, salary, bonuses or incentives are not the be all and end all of attracting and retaining talent. Instead, employers should have their own strategy for maintaining their talent pool by being able to develop a compelling answer to this question: why would a talented person want to work for my company? Our most recent survey also points out that a good salary, benefits and bonuses system is just one of the major criteria contributing to an employer’s attractiveness.

What are the other criteria?

To understand what experienced professionals in Vietnam perceive as the positive features of “an employer of choice”, Navigos Search conducted a survey entitled Employer Branding from January 24 through March 15, 2011. The survey looked at 4,800 senior-level people working in both locally-invested and multi-national corporations. We believe that by having a good Employment Brand, companies will be in a strong position to attract and retain talents.

The survey found that besides the abovementioned criterion, the most attractive employers should have a good leadership team, a good physical and spiritual working environment, and an ability to support employees’ training and development needs. Among them, a good leadership team is key to building up an attractive employer brand since 76 per cent of participants considered this the top criteria. Obviously, today a good leadership team is not only a driving element of a successful business, but also a principal attribute towards making organisations become an employer of choice.

At the same time, with 75.2 per cent and 71.8 per cent of participants respectively judging that an attractive employer brand should offer a good physical and spiritual working environment and support employees’ training and development, these two criteria serve as the second and third most important roles in building an attractive employer brand. High salaries and bonuses, which many are still believe the most important factor in job-hopping, are only favoured by 66.4 per cent of the respondents.

For a long period, working for the state sector seemed to be job seekers’ top choice in terms of stability while foreign invested enterprises were favoured for their high salaries and dynamic working environment. Have you noticed any big changes on this front?

Yes, the survey has resulted in an interesting observation. Historically, multinational companies in Vietnam have enjoyed a big advantage because local employees viewed them as employers of choice: offering better environment, better pay and better career prospects than domestic companies. However, the survey showed that only 14.3 per cent of participants chose this factor as one of the most important criteria the most attractive employer brand should have.

We think there is a shift in candidates’ attitude. It might be because of the consistent growth of domestic companies, even during the economy downturn. Domestic companies nowadays also pay lots of attention to building their reputation and employment branding to attract talented professionals. They are significantly improving and also offering good career prospects to candidates. In addition, many local senior candidates hit the ceiling at multinational companies and want to shift and contribute to domestic companies.