With the rapid economic growth in Southeast Asia, Vietnam has become a key market in the expansion strategies of many multinational corporations. Attracting and retaining top local talent is crucial for success in this dynamic market. To compete in Vietnam, businesses must have a deep understanding of the local compensation and benefits system and develop effective human resources strategies. This guide provides a comprehensive analysis of Vietnam’s salary structures, benefits systems, industry salary overviews, and the culture of working hours and overtime, helping multinational companies successfully recruit and manage talent in Vietnam.
Vietnam’s Compensation and Benefits System
Vietnam’s compensation and benefits system is evolving and improving to meet the needs of domestic and foreign enterprises and international standards. Here’s a more detailed introduction to Vietnam’s compensation and benefits system:
Salary Structure
Base Salary: This is the basic part of an employee’s salary, usually paid monthly. The determination of the base salary considers the job level, work experience, educational background, and industry standards.
Allowances and Subsidies: To compensate employees for specific needs and working conditions, Vietnamese companies usually offer various allowances, such as transportation, meal, and housing subsidies. These are intended to help employees cope with additional work-related expenses.
Overtime Pay: According to Vietnamese labor laws, overtime work generally requires extra pay. Overtime pay is calculated based on the base salary and varies according to the working time (weekday, weekend, or holiday).
Performance Bonuses: Many businesses implement performance evaluation systems to award quarterly or annual bonuses based on employee performance. These bonuses aim to motivate employees to achieve goals and improve performance.
Year-End Bonuses: In Vietnam, the year-end bonus (or “thirteenth salary”) is an important part of employees’ income, usually based on company performance and individual contributions.
Benefits System
Social Insurance: Vietnamese law requires employers and employees to contribute to social insurance, including pension, sickness and medical insurance, unemployment insurance, etc., providing a basic social safety net for employees.
Health Insurance: In addition to medical coverage under the social insurance system, many companies offer additional commercial health insurance to employees, covering a wider range of medical services and higher-quality medical institutions.
Retirement Plans: Vietnamese businesses may offer additional retirement or savings plans beyond the statutory social insurance requirements, helping employees better prepare for retirement.
Paid Leave: In addition to statutory annual leave, businesses may also offer additional paid time off, including sick leave, marriage leave, maternity leave, and bereavement leave.
Employee Training and Development: An increasing number of Vietnamese companies are investing in employees’ professional training and personal development, including internal training courses, external seminars, and international exchange opportunities, to enhance employee skills and professionalism.
Employee Health and Welfare Programs: To improve overall employee well-being, businesses may offer benefits such as workplace fitness facilities, regular health check-ups, mental health support, and employee relaxation areas.
Work Environment and Culture: A positive work environment and corporate culture are also valued by Vietnamese companies. By creating an inclusive, diverse, and supportive atmosphere, businesses can increase employee satisfaction and loyalty.
Industry Salary Overview
Technology and IT Industry: The technology and IT industry is one of the most watched fields in Vietnam, due to its rapid development and high demand for tech talent. The annual salary for a junior software engineer typically ranges from 500 million to 700 million Vietnamese dong. With increased technical skills and project experience, senior engineers or specialists (e.g., those with expertise in artificial intelligence, big data analytics) can earn over 1.5 billion dong annually. The fast pace of technological innovation means a continuous increase in demand for skilled IT professionals, driving up salary levels.
Manufacturing Industry: Vietnam’s manufacturing industry plays a significant role in the global supply chain, especially in textiles, garments, and electronics. The starting salary for manufacturing engineers is roughly between 300 million and 500 million dong, while experienced senior engineers or managers can earn over 1 billion dong annually. The manufacturing industry’s high demands for technological innovation and quality management drive the need for skilled talent, thereby increasing salary levels.
Healthcare Industry: Vietnam’s healthcare industry has seen rapid development in recent years, with an increasing demand for general practitioners and specialists. A general practitioner’s annual salary generally ranges from 1 billion to 1.5 billion dong, while specialists, especially in high-demand areas (such as surgery, internal medicine, pediatrics), can earn up to 3 billion dong or more. With the improvement of Vietnam’s medical service level and the increase of private medical institutions, the salary level of medical professionals is on the rise.
Education Industry: Vietnam values the development of its education sector, with stable demand for educational talent in public and private institutions. The annual salary for teachers in public schools typically ranges from 150 million to 300 million dong, depending on seniority and qualifications. Teachers in private schools and international schools usually enjoy higher salaries, especially those with advanced degrees and international education backgrounds. The salaries of language school and tutoring teachers also vary according to the location, school reputation, and student size.
Financial Services Industry: Vietnam’s financial services industry, including banking, insurance, and investment, offers a wide range of career opportunities and higher salary levels. The annual salary for entry-level customer service positions may range from 300 million to 500 million dong, while senior positions such as investment bankers, financial analysts, and asset management experts may earn from 2 billion to 3 billion dong or even higher. Performance bonuses and commissions are common in the financial industry, usually closely related to individual and team performance. As Vietnam’s financial market develops and internationalizes, the demand and salary levels for financial professionals are expected to continue to grow.
Working Hours and Overtime Culture
Standard Working Hours: According to Vietnamese labor law, the standard full-time working hours are 48 hours per week, usually divided into 6 working days of 8 hours each. This is the maximum working time stipulated by Vietnamese law, aimed at protecting workers from overwork. However, with the development of the market economy and different industry demands, many businesses, especially foreign-invested and private enterprises, adopt a 5-day work week system with 40 hours of work per week.
Overtime Culture: Overtime is relatively common in Vietnamese businesses, especially in the manufacturing, technology, IT, and some high-pressure service industries, such as finance and legal services. The overtime culture is partly due to market competition pressure and partly due to corporate culture and management practices, where overtime is seen as a sign of employee dedication and commitment. Vietnamese labor law has clear regulations on overtime, including limits on overtime hours and calculation methods for overtime pay, to protect workers’ rights.
Government Measures and Market Trends: The Vietnamese government recognizes the potential impact of excessive work and overtime culture on employee health and quality of life and is taking measures to encourage businesses to improve working conditions and promote work-life balance. This includes promoting flexible work arrangements, such as remote work, flexible hours, and compressed work weeks, as well as strengthening the enforcement of labor laws to ensure compliance with overtime regulations.
Advice for Multinational Corporations: For multinational corporations setting up or operating in Vietnam, understanding and adapting to the local working hours and overtime culture is essential. It is recommended that multinational corporations:
Respect Vietnamese labor law regulations, arrange work and overtime reasonably, and ensure employee health and welfare.
Explore and implement flexible work arrangements, such as allowing remote work or providing flexible working hours, to improve employee satisfaction and productivity.
Cultivate a results-oriented corporate culture, emphasizing work efficiency and outcomes rather than merely using overtime as a measure of dedication and commitment.
Pay attention to employees’ work-life balance, provide support measures such as mental health counseling, fitness facilities, or family-friendly policies to attract and retain talent.
As Vietnam’s economy continues to grow and internationalize, understanding and adapting to the local compensation and benefits system, industry salary overviews, and the culture of working hours and overtime is crucial for multinational corporations. By offering competitive salaries, comprehensive benefits plans, and promoting a healthy work-life balance, businesses can not only attract and retain top talent but also build strong teams in the vibrant Vietnamese market, driving long-term success and sustainable development. With ongoing innovations in corporate culture and management practices, as well as government efforts to improve labor regulations and promote new working models, Vietnam’s work environment will continue to evolve towards more humane, efficient, and flexible directions.
