HR Trends in the economy downturn, Vietnam For AmCham HCMC

26/03/09

Employees said

The company is cutting cost and I am getting less benefits The company is making money but is still laying off I am losing my job to a contract staff I am not getting a pay raise this year and that is not fair I have to take on more responsibility now that we have less people to do the job

Recent Employer Survey (Preliminary Result) 75 responses tallied to date Industry range from Survey area - Salary adjustment - Benefits & Allowances adjustment - 2008 Bonus pay out - Lay offs & work reduction - Recruitment - Outsourcing

Recent Employer Survey (Preliminary Result)

Com panies adjusted salaries in past 6 m ths

3.08% 20%

6.15% A B C D E 63.08%

Manufacturing Real Estate/Property Developer IT & Telecoms

Industry Distribution

Salary Reduction 12 20% Salary Increase 4 to 30% Salary Freeze Review to be conducted later Undecided

7.69%

Manufacturing IT & Telecoms Real Estate/Property Developer

Industry Distribution

Recent Employer Survey (Preliminary Result)

2008 Tet Bonus Payout

7.81% 7.81% A B C

50 500% more

Paid in full per obligation Paid less than obligation Paid more than obligation

Hospitality Pharmaceuticals IT & Telecom

Industry Distribution

83.38%

50 80% less

Industry Distribution IT & Telecom Manufacturing Real Estate Trade/Wholesale

Recent Employer Survey (Preliminary Result)

Benefits & Allow ances adjustm ent

24.62%

30.77% A B C D

Adjusted down Unchanged To be reviewed (Q2 or3) Undecided

7.69%

36.92%

Industry Distribution Manufacturing IT & Telecoms Real Estate/Property Developer

Items Adjusted Meals Transportation Housing Medical Check Uniform Company Trips

Recent Employer Survey (Preliminary Result)

Laying Off in the past 6 m ths

3.08% 23.08% A B C

Had laid off Had not laid off anyone Undecided

73.85%

Industry Distribution Manufacturing Real Estate Automotive IT & Telecom Construction/Engineering

Functions Marketing Admin Tech F&A Production R&D Sales

Recent Employer Survey (Preliminary Result)

Working Hours Reduction

4.62% 4.62%

9.23%

Industry Distribution Manufacturing Automotive Construction IT & Telecom

A B
Reduced up to 1 day/week Unchanged

C Are Considering D Undecided

81.54%

70% resulted in reduced salary 30% only reduce hours

Recent Employer Survey (Preliminary Result)

Recruited w ithin the last 6 m ths

Industry Distribution Manufacturing (FMCG) Real Estate Automotive

20.00%

Will Recruit in the next 6 m ths

Yes No

1.72%
80.00%

Functions priority Admin Sales Marketing IT Operations Project R&D

Yes No Undecided 65.52%

37.75%

Manufacturing (Durable Goods) IT & Telecom Real Estate Automotive

Industry Distribution

Level priority Non-management Management Top Management

Recent Employer Survey (Preliminary Result)

Workforce Outsource

10.76%

13.85%

Functions Admin Office Support Security

Yes No Considering

Business Process Outsource

75.39%

2 34% of current workforce

20.00%

7.69%

10 35% of current fuctions

Yes No
Functions Marketing Security

Considering 72.30%

Which sectors in Vietnam are affected more?

Manufacturing sector especially export focused ones and luxury product lines are affected more than everyday goods FMCG reported optimism with potential growth of the domestic market Insurance and Retail banking sector continue to forecast growth Professional Service will remain in high demand thanks to WTO and the ever changing legislature and tax environment Constructions involving infrastructure continue its steady demand Certain BPO services see sharp increase in inquires and possibly business prospects Consolidation of regional rep offices are happening Minimal to no impact on Health care and Education NGOs experience retracted agreement on corporate commitment

What functions are affected more?

Services or divisions involved R&D are reported to be slowing or disbanded in some cases Events and Marketing teams are seeing some elimination of headcount with budget Sales related positions as well as senior executives seems to be least affected Many expatriated senior appointees saw the knife All support functions are being evaluated closely Manufacturing based jobs went with the orders

Common Actions
Layoffs

! Outplacements

Cost Optimization ! $$$$$ Removal of all discretionary spending Salary Freeze Monthly/Quarterly budget

Prepare the unprepared Individual or Group offerings

Short Term Plan ! Interim Solutions Hiring freeze Temp/Contract staffing

Reorganization ! Efficiency evaluation Job reassignment Job redesigning Outsourcing

Some suggestions to ensure positive employment relationship

1. 2. 3. 4. 5. 6.

Provide transparency Provide leadership Proactively communicate Share responsibilities Take the temperature often Be humane share their pain