Despite current challenges with declining orders and revenues, several factories are proactively raising wages for their employees next year in anticipation of a future recovery in demand.
This strategic approach is designed to retain skilled workers during these economically challenging times.
Changshin INC. Vietnam, a Nike footwear supplier in the southern province of Dong Nai, will increase the monthly salary of its 37,000 workers by VND150,000 ($6.19) each starting next year, incurring an additional monthly cost of VND5.7 billion.
Dang Tuan Tu, the head of the union labor at the firm, mentioned that despite a 20% decline in orders this year due to weak global demand, company leaders are prioritizing the retention of workers by implementing wage increases.
In the coming year, a new employee at Changshin will have a starting wage of VND5.5 million, which is 16% higher than the government’s minimum requirement. Tu added, “The company will raise the wage higher should the minimum wage increase in the upcoming years.”
Medical equipment manufacturer Vikki Vina in Ho Chi Minh City will also raise the salaries of its 1,500 workers by VND200,000 each next year, representing a 5-6% hike. A new recruit will start at VND7.3 million per month.
Despite a monthly decline of 1,000 products in orders, the company’s board approved the wage increase. Additionally, each worker receives an average bonus equivalent to a two-month salary and a gift set worth VND600,000.
According to a survey by recruitment firm Navigos Search, nearly 45% of respondents reported receiving a raise this year, while 11.5% reported a decline, with raises typically falling in the 5-10% range.