Highlights Of 2022 Talentnet-Mercer Total Remuneration Survey Report
October 7, 2022
On October 6 and 7, 2022, Talentnet – the exclusive partner of Mercer and the only company providing total HR solutions in Vietnam, published an exclusive report on the results of Total Remuneration Survey (TRS) 2022.
TALENTNET – MERCER TOTAL REMUNERATION & BENEFITS SURVEY 2023
Talentnet-Mercer Total Remuneration Survey 2023 is here to help your business optimize compensation plan as well as make well-informed decisions based on accurate data and in line with market trends.
Join now to get the most insightful data and other exclusive discounts from us!
Compared to 2021, this year’s survey shows a higher number of jobs and participants, with over 3,300 positions from more than 483,000 employees across Vietnam, and the joining of a new industry to the survey: Renewable Energy. Moreover, the survey also witnesses an increase in participant companies, with 15 companies more than 2021. This demonstrates that, two years after the pandemic, companies are more motivated in investing in human resource initiatives through the development of a desirable and sustainable compensation policy.
Some highlights of the 2022 TRS survey report:
Vietnam’s economy thrived in all areas as a result of the strong return of businesses post-pandemic, with GDP growth more than doubling last year at 6%. Vietnam is also regarded one of the most attractive destinations for FDI, ranking second only to Malaysia in Southeast Asia. This is a good signal for the economy and the labor market in general.
1. Workforce structure
Baby boomers (born before 1965) accounted for 0.6% workforce. Generation Y2 (born in 1990 – 1996) and gen Z (born in 1997 and later) account for about 54% of the workforce. However, according to the TRS survey, the level of attachment of the Y2 and Z gene groups to the business is only about 2-3 years, much different from the Y1 gen group (1981 – 1989) with 8 years of attachment, or the gen X (1965-1980) is 12 years. This is a point that businesses need to pay attention to in order to increase the level of attachment and retain this group of young talents.
2. Only 2% of companies plan to reduce their workforce
On the momentum of economic post-pandemic recovery, the percentage of firms with additional staff needs increases, with 45% of over 600 surveyed organizations reporting that they would hire more employees, 18% of businesses having not decided yet and 35% of businesses having no intentions to hire or dismiss personnel. Only 2% of companies, on the other hand, plan to cut headcount in the coming year.
The turnover rate of the first half 2022 fell at 11.9% for local companies, and 8% for MNCs. This number indicates that Vietnam is still experiencing ‘The Great Resignation’ for a variety of causes.
In which, the top three industries where businesses have the highest rate of resignation in MNCs are Retail 15.6 %, Real Estates 12.7%, and Various Manufacturing 10.1%. This is a fair reason for they are industries most impacted by Covid-19, having low pay in comparison to the market midpoint, having a large and diversified workforce,…
Meanwhile, 03 industries with the lowest turnover rate remained unchanged compared to the previous year, namely Oil and Mining, Renewable Energy and Chemicals – that are least affected by Covid-19 plus competitive pay offers due to the great demand for expertise.
3. Budget for salary increase of Vietnamese local companies declined
The rate of pay growth in the Vietnamese market has been dropping over time, reaching its lowest point in 2020, however there have been indications of a upsurge due to post-Covid economic recovery. Budgets for MNC pay rises increased by 0.2% in 2022 compared to 2021, while local Vietnamese businesses experienced a 0.3% decline.
Vietnam belongs to the group of countries with a more stable inflation rate than the rest of the region, thanks to the government’s efforts to keep it below 4%. Both MNCs and local companies are expected to witness similar pay growth trends at 7.1% in 2023 – a promising sign of the economy’s rebound.
According to the 2022 TRS report, the top three industry sectors with the highest salary increase are High-tech (up 8.88%), Insurance (up 8.2%), and Life-Science (up 7.6%). This clearly reflects the needs of Vietnam’s economy, particularly in the post-pandemic when consumers’ and businesses’ concerns are oriented toward healthcare and technology applications.
Oil and Mining (up 3.6%), Various Manufacturing (6.1%), and Retail (up 6.2%) continue to have the lowest pay growth. Various Manufacturing and Retail both belong to the group of industries with a high turnover rate, but the pay increase rate is still not comparable with that of other sectors. Even though the survey findings cover the overall industry across different levels, the figures encourage organizations to rethink their strategy of talent retention and acquisition for the future.
4. Local companies pay lower than MNC 31%
According to the TRS 2022, Vietnamese companies’ average salary rate is 31% lower than those of MNCs, but when the total income is considered, the difference is just 22%. This is because Vietnamese businesses are focus more on the sales incentive scheme or performance bonus than basic salary.
Notably, the 2022 report shows that, for the first time in many years, the starting salary of new graduates from Vietnamese universities and overseas universities is the same (about 10,600,000 VND/ month).
5. Financial Service – Non-banking has the highest bonus, while Transportation & Logistics has the lowest bonus rate
Similarly to 2020 and 2021, businesses in the Finance sector, including Banking and Non-Banking, have the highest expected bonus ratio in 2022. The bonus rate in 2022 ranges from 43% to 20.8% of the annual base salary. Agriculture has the third highest expected bonus, with a bonus rate of 20.3% of the annual base salary.
It can be seen that the bonus rate of the non-banking group increased 1.7 times compared to 2021, resulting in a very high 43%, as a result of the growing demand for consumer loans after the pandemic.
Meanwhile, Retail (10.9%), Renewable Energy (14.2%), and Transport & Logistics (15.4%) have the lowest expected bonus ratios. Transport and Logistics also has the lowest bonus rate in 2020 and 2021.
With nearly 1000 business leaders and HR managers in attendance, 2022 Talentnet-Mercer Total Remuneration Survey Announcement is the biggest event in Vietnam delivering the biggest and most comprehensive salary data, which is considered a “guideline” for local and foreign organizations in restructuring compensation policies, building a total remuneration scheme that best fit corporate goals and sustainable development.
TRS Report is the largest salary survey in Vietnam, with the participation of over 600 businesses across 17 industries. The TRS is currently considered as the most comprehensive and credible report on total rewards landscape of Vietnamese enterprises over the last 15 years, as it not only has the largest salary data but also uses Mercer’s international methodology implemented in over 200 countries worldwide, offering HR professionals and business leaders an overall perspective on the labor market.
For more insights, please read the full report!
Ms. Võ Minh Phi Anh – Business Development & Services Excellence, Talentnet