Factories boost salaries to retain workers

Some factories are increasing salaries to support workers amid the Covid-19 pandemic and keep them from leaving following a major migration over the social distancing period.

Starting this month, over 800 employees at electronics manufacturer Datalogic in Ho Chi Minh City have seen their salaries increase by 7.6 percent.

CEO Tran Tien Phat said other post-social-distancing support includes a stipend of VND7.5 million ($325.80), a 13th-month salary and lucky money during upcoming Tet, Vietnam’s biggest holiday that falls in February.

The company has had to make adjustments in its spending to have money for the pay rise, he added.

In Binh Tan District, Saigon Aquatic Products Trading JSC has decided to give its over 400 employees a pay rise of at least 5 percent starting next year.

It already gave them a 10-percent rise in basic salary during the second quarter this year, boosting their average income to nearly VND9 million.

Workers process fish at the factory of Saigon Aquatic Products Trading JSC in Ho Chi Minh City. Photo by VnExpress/An Phuong

CEO Truong Tien Dung said this year has been challenging with the working onsite model and rising costs to fight Covid-19 while productivity fell.

"We are trying to gradually lessen our loss and keep manufacturing stable to find an opportunity to bounce back," he said, adding to accomplish this goal, the company needs to retain its workers.

Without a pay increase, workers will struggle in the upcoming period when inflation rises and they might leave, he added.

Millions of workers left HCMC, Dong Nai and other major southern industrial hubs in the third quarter and October as restrictions to curb the Covid-19 pandemic saw them lose their jobs and run out of cash.

This is why southern factories are struggling to attract enough workers to resume production as many workers remain in their hometown without planning to return.

A recent survey by the Food and Foodstuff Association of HCMC shows that most of its 400 members plan a 5-10 percent pay increase to make up for inflation and share the burden with workers.

The reverse migration of workers to their hometowns has left behind a labor shortage at many factories, said Dung, also deputy chairman of the association.

"We are not short of orders. We are short of workers," he said, adding that giving more bonuses and benefits are some tactics companies employ to retain workers.

Tran Viet Anh, deputy chairman of the HCMC Union of Business Associations, said many factories regularly increase pay to retain high-skilled laborers, and not simply when prompted by the government.

Foreign direct investment companies in the industries of electronics and precise machinery often increase pay by the end of the year when re-evaluating employee contracts.

"To have money for salaries, we have to increase production," he said, adding that he does so by purchasing more equipment or reducing the number of employees with autonomous machinery.

Huynh Van Tuan, chairman of the labor union covering HCMC’s manufacturing zones, said the minimum salary in the city remained unchanged at VND4.42 million a month in 2020 and this year, and would likely do so next year.

This is why companies have been increasing salaries to prevent workers from leaving after Tet, which is common.

A recent survey by a recruitment company involving 54,000 workers shows a third have received a pay increase on an average of 8 percent compared to the year before.