Wages fail to keep up with inflation

VietNamNet Bridge – Salary increases this year might not keep pace with inflation, although the latter is estimated to average less than 10 per cent, according to the human resource services provider Navigos Group.

Salary increases this year might not keep pace with inflation.

In a statement released last week, Navigos Group says it has updated its September 2008 projection that expected salary increases this year to be in double digits.

The group’s previous report, the Supplementary Report 2008, released in April had studied key elements "that could potentially affect compensation and benefit trends in the Viet Nam labour market, such as Foreign Direct Investment (FDI), Gross Domestic Product (GDP), inflation and unemployment rates.

Winnie Lam, director of the group’s HR Advisory Services, suggested that in the developing situation, employers aim at higher returns from their manpower budgets by moving away from "continuing to increase the already high base salary ratio… towards more variable pay elements that tie to performances."

The group also announced the results of its Trend Survey 2009, conducted in March among 91 companies, of which 58 per cent are 100 per cent foreign-owned companies from various industries. Manufacturing & IT/telecom companies had "the highest respondents."

"A lot of the companies are doing quarter to quarter budgets while some go as far as doing month to month budgets for 2009. The market has become so volatile in the past few months and surely will continue for months to come," said Lam.

The survey found 59 per cent of surveyed companies had increased salaries between the fourth quarter of 2008 and the first quarter of 2009 despite the global economic downturn. Nearly 40 per cent of respondents also said they had kept 2009 benefits and allowance systems at the same level as last year.

While there was a slight decrease in recruitment, 67 per cent of the surveyed said they still planned to hire new staff over the next six months.

The group’s statement said since its launch in late April 2009, the Viet Nam Salary Survey 2009 has attracted more than 120 participants so far in 18 industries including manufacturing, IT/Telecom, construction/engineering, trading/wholesales/retails, real estate, and pharmaceutical/healthcare.

VietNamNet/Viet Nam News