The business community is burdened by the "thirst" for human resources, as well as the pressures of raw material pricing and logistical expenses

DNHN - Labor unit prices climbed by 20-30%, but construction firms still struggled to recruit employees; labour in the tourist sector declined by 55-60%, and many 5-star hotels were hesitant to reopen. Raw materials are in low supply, driving up prices, logistical costs are high, manpower is scarce, and financial availability remains limited.

Commitment to companion, maximum support!

"The conference on the situation and recommended tasks, solutions to eliminate challenges, assist production and business in the final six months of 2022" was held yesterday, February 27/2022, by the Ministry of Planning and Investment.

The conference provides an opportunity for nearly 20 associations, industries, and many related agencies, as well as policymakers, to exchange ideas, share information, learn more about opportunities and challenges, as well as propose solutions and policies to remove obstacles, create all favourable conditions for the business community to be more practical and effective in the final six months of 2022.

Minister of Planning and Investment Nguyen Chi Dung, who presided over the conference, stated that the global and regional economic and political situation has many fluctuations and potential complications, such as increased armed conflicts equipment, petrol and raw material prices; high inflation accompanied by different monetary policy adjustments in many countries; global supply chain disruptions; consumer demand declines in some major economies; and the risk of entanglement.

In the first six months of 2022, our country's socio-economic condition continued to improve, with macroeconomic stability and key balances maintained despite significant variations in the global and regional circumstances. Many businesses and disciplines have recovered impressively from the pandemic, including aviation, tourism, and retail...

Mr Dau Anh Tuan, Deputy General Secretary and Head of the Legal Department of the Vietnam Confederation of Commerce and Industry (VCCI) said that the economy is facing the danger of high inflation and that reducing taxes and the gasoline price is difficult from now until the end of the year.

Furthermore, although imports and export are beneficial, there are possible obstacles. "Our import and export are heavily dependent on and interact with the Chinese market, so there may be challenges in the future," Mr Dau Anh Tuan remarked.

Notably, the Deputy Secretary-General and Head of the VCCI Legal Department highlighted a serious problem that we would face in the future year. Consequently, Vietnam will begin applying the global minimum tax in 2023.

"This is a concerning trend for large organizations. The key reason for FDI entering Vietnam is lower costs. In light of the trend of growing salaries, labour expenses, and taxes as a result of the implementation of the global minimum tax policy, the government should form a dedicated working group on this problem," said Mr Tuan.

Mr Tuan also urged at the conference that organizations proactively propose, agencies support institutional change, and lower business conditions to lessen obstacles and expenses for enterprises.

Minister Nguyen Chi Dung emphasized that the Government, the Prime Minister, the Ministry of Planning and Investment, as well as the ministries and branches, commit to accompanying and providing maximum support for production and business activities, creating all favourable conditions for growth.

"Requirement" human resources

The "thirst for human resources" has been cited as one of the most prevalent problems affecting the business sector at the Conference. Mr Nguyen Quoc Hiep, chairman of the Vietnam Contractors Association, said that seasonal and leisure employees are prevalent in the construction industry owing to their unique characteristics. 

However, after being afflicted by the COVID-19 outbreak for an extended period, construction workers have moved on to other careers. The unit cost of labour rose by 20 to 30 per cent, yet construction companies continued to struggle and were unable to locate personnel.

In a similar circumstance, Vu The Binh, chairman of the Vietnam Tourist Association, said that the number of workers in the tourism business declined by around 55-60 per cent. Currently, many hotels, particularly cautious 5-star hotels, do not dare to reopen, which is a common occurrence in many regions.

Dr Bui Van Ne, Vice President and General Secretary of the Aviation Business Association, stressed the reality of a portion of technical and managerial labour in the aviation sector, one of the hardest-hit industries. Even when the market is rebounding, a labour shortage is caused by the departure of highly trained people.

Electronics, processing, manufacturing, etc., are not the only businesses that demand a large number of high-quality workers. Representative of the Vietnam Alliance for Industrial Support - Ms Pham Thi Tinh said that after a lengthy period of unemployment, employees' skills deteriorate, requiring firms to invest time and money in retraining. 

Even while the cost of labour in this industry has grown, it is not sufficient to "retain" personnel. Recruiting new personnel is another significant difficulty for firms.

Price pressure on raw materials and logistics

International disagreements and wars affect the price of gasoline, which rises as a result. This is a burden shared by associations, industries, and business groups in aviation, transportation, textile, logistics, construction, etc… 

Mr Bui Van Ne, a representative of the Aviation Association, said that several flight routes must be operated. modified, increasing in flying hours and expenditures. The rivalry on international routes is intensifying, although the potential of Vietnamese aviation companies remains restricted.

Mr Nguyen Quoc Hiep, the chairman of the Contractors Association, said that the price of raw materials rose concurrently, resulting in an 18-30 per cent price rise compared to the end of 2020. 

According to Mr Truong Van Can, Vice Chairman of the Vietnam Textile and Apparel Association, the costs of cotton, gasoline, and crude oil have all risen. While foreign currency rates for the yuan, won, and yen all fell by more than 15 per cent, the Vietnamese dong only fell by 1.8%. This is harmful to exporters.

Nguyen Hoai Nam, Deputy General Secretary of the Vietnam Association of Seafood Exporters and Producers, disclosed the complete cost of delivering one 40-foot container of frozen seafood to Vietnam while discussing the burden of transportation expenses on companies. 

During the height of the pandemic and port congestion on the East Coast of the United States (such as Florida), 400 million Vietnamese Dong were spent. In June, the price per container is around 390 million VND, which is lower than usual but still four to five times the standard.

Associations and industries have also expressed issues with getting credit assistance packages, highlighting the need for a mechanism to encourage the sharing economy, such as linking capital sources of enterprises and mobilizing and using financial resources. force.

A spokesman of the Vietnam Textile and Apparel Association said that the country's monetary policy and currency rate have been steady over the last several years, but export-oriented businesses are losing their competitive edge. This stance advocated retaining the dong at a modest exchange rate to facilitate the competitive advantage of export industries.

Support solution tips and suggestions

Vu The Binh, chairman of the Vietnam Tourism Association, advocated as a solution to the "thirst for human resources" that enterprises be assisted in educating human resources under the most fundamental circumstances so that businesses have a basis for future growth.

Associations' representatives, it is essential to develop vocational training programs and the role of vocational schools to satisfy labour demand. The Ministry of Labour, War Invalids, and Social Affairs and the Ministry of Education and Training (vocational schools) may collaborate to enhance the efficacy of training to develop skilled employees.

According to a representative of the Vietnam Logistics Association, to stabilize prices, it is necessary to address the issue of logistics cost pressure on businesses, propose and recommend solutions to support, eliminate difficulties and obstacles for businesses and industries, and solve the problem of logistics cost pressure. 

On the domestic market, fuel costs are a major factor. Therefore, the Association recommended that the government intervene shortly to stabilize gasoline prices.

Nguyen Duy Minh, general secretary of the Vietnam Logistics Association, said that the Ministry of Planning and Investment must pay close attention to re-planning and new planning on logistics, allowing business owners to invest in appropriate provinces/regions. 

Sector planning, value chain management, and regional planning are the primary long-term solutions. Promoting a robust digital transformation within the logistics service business would assist reduce expenses.

International logistics is intimately connected to the competitive advantage of import and export commodities and the attractiveness of FDI investment. 

Mr Minh requested that the Ministry of Planning and Investment report to the Prime Minister; communicate with the Ministry of Transport and the Ministry of Finance to develop a strategy for working with shipping lines to stabilize international freight rates and surcharges.

Representatives of groups and industries also noted issues with obtaining financial assistance packages, citing the need for a framework to promote the sharing economy by, for example, linking firms to capital sources and mobilizing and using resources.

Deputy Minister of Planning and Investment Tran Quoc Phuong said that the Ministry of Planning and Investment would summarize, report, and advise the Government and the Prime Minister on critical policies for the final six months of the year based on the multidimensional remarks made at the Conference.

After the Conference, the Deputy Minister of Planning and Investment suggested the associations submit an official proposal to the Ministry of Planning and Investment within the next two days. The Ministry of Planning and Investment would then summarize and report on the proposal at the upcoming regular Government meeting. MPI will absorb and choose eligible projects and activities for inclusion in long-term content.

Tran Linh