Manufacturing sector struggles to overcome skills gap The labour challenges facing Vietnam in 2017 are considerable, requiring a massive effort to retrain and upskill workers by the millions, says the Ministry of Labour, Invalids and Social Affairs (Molisa). According to Molisa’s Employment Department, the Make in Vietnam initiative is meant to help create a more solid foundation for the country’s economy by investing heavily in the high-end manufacturing sector, but it is running up against the limited skills of the workforce.  In 2016, says the Department, only 166,000 students graduated from a full-time accredited vocational college while another 1.7 million completed short 3-month skills training programs. The short training essentially makes the graduates unemployable in today’s workforce and does little to nothing to help Vietnam remedy its skills crunch, says the Department. The Department adds that the lack of participation in comprehensive specialized courses mean companies operating in Vietnam must underwrite the cost of training their own people from scratch. Department personnel are quick to point out and emphasize that Vietnam does not have a labour shortage problem— it has a monumental skilled labour shortage challenge to overcome. While Vietnam has thousands of vocational schools, they aren’t producing the calibre of worker required, says the Department. The quality of the manpower when they come out of short 3-moth vocational training programs is not A-grade. The country’s skills gap is not solely unique to its manufacturing sector. Skills training is in short supply across a range of technical fields. Currently only a tiny fraction of Vietnamese workers have received formal vocational skills training, according to the Department, which is backed up by numerous published surveys. Those studies show that the country’s tiny fraction of less than 1% compares with 68% in the UK, 75% in Germany and 96% in the Republic of Korea. What Vietnam is suffering from, notes the Department, is a shortage of specifically-skilled labour—in other words, a mismatch between the skills it has and those it needs. And what it needs most is skilled workers for manufacturing. On the one hand, university students graduating with a degree in science, technology, engineering and math (STEM) fields are overqualified and are not necessarily the most suited for these manufacturing jobs. On the other hand, the untrained population of Vietnam that is only taking 3-month vocational skills training is unable to fill the skilled manufacturing positions the sector needs. Without training in the – middle – Vietnam will lose out to its Southeast Asian neighbours that are absorbing businesses moving out of China as wages in that country rise and the Chinese economy moves up the value chain. One means to solve the problem advocated by many organizations and individuals has been to cast employee vocational training activities as part of corporate social responsibility (CSR) initiatives. Though it may seem a workable solution at first blush, what happens, say industry experts, is that one company spends money to provide their employees vocational training, but after having received it the employee leaves to accept employment at a competitor. As well, it is often the case, that some of the vocational training needed is not directly related to the core business of a specific employer so it unnecessarily adds CSR cost that far too many companies in Vietnam simply cannot afford. Finally, the skill development that is often undertaken by many companies is specifically geared to meeting their own requirements and may not provide any benefit to the employee outside of his or her current job. That type of training leaves the employee overly specialized and not particularly employable by another upon the event that he or she were to move jobs. So in the long run, say the industry experts, CSR it is not a workable solution to the country’s massive skills mismatch problem. VOV