Workforce Development for More FDI

As of April 21, 2009, there were 275 FDI projects in Hai Phong involving more than US$4.238 billion in registered investment capital and more than US$1.455 billion in chartered capital. Forty-three percent of the registered capital has been invested. The Department of Foreign Investment of the Ministry of Planning and Investment reported that by the end of last year Hai Phong ranked 11th among 64 provinces/cities nationwide and second among northern provinces/cities in terms of foreign investment project numbers and capital. FDI in Hanoi and Ho Chi Minh City accounts for 11.7 and 7.5 percent of all FDI in Vietnam, while that in Hai Phong represents just two percent of all FDI in the country.

In general, Hai Phong people have a good sense of discipline and they’re quick-minded, creative and active. Yet, the city is in bad need of skilled workers who can satisfy businesses or employers’ demands.

Of all businesses surveyed by VCCI (the Vietnam Chamber of Commerce and Industry) in 2008 under the Provincial Competitiveness Index program, 24.35 percent and 16.24 percent satisfied with the city’s education and training and vocational training, respectively. Hai Phong got a score of 3.28 for workforce training, while Hanoi got a 4.79, Can Tho got a 5.79, Ho Chi Minh City got a 5.19 and Da Nang got an 8.4 score. This deters Hai Phong from attracting FDI to the city especially FDI for hi-tech industries that require skilled and qualified workers.

Hai Phong not only lacks skilled technicians, it also needs managers who can do a good job while working with partners, and who know the law. In the city, the workforce arrangement is problematic, and the working environment is not good enough to encourage people to do their best. There has also been a brain drain. Hai Phong does not attract high-achieving graduates from universities or colleges inside or outside the city.

More FDI flows to localities that have adequate infrastructure and a high quality workforce. The absence of a qualified, skilled workforce is something that would deter investors from coming to any province/city. Hence, Hai Phong needs to improve its workforce to attract FDI. The following is something that Hai Phong needs to do for workforce development.

The city needs to construct a strategy to train and attract workers that can satisfy FDI project demands and requirements. They need to make vocational training plans, increase investment in material facilities of newly founded vocational training centers, change vocational training policies to give more power to vocational preparation centers, give priority to the development of vocational training colleges and schools, including those that satisfy Southeast Asian standards, and develop the training of people for spearhead industries (shipbuilding, ship repair, mechanical engineering, new materials, steel and other industries) and FDI projects in Hai Phong.

Hai Phong needs to have policies that will attract qualified and skilled people including those that study in the city, Hanoi (the capital) and abroad. Good housing and insurance policies, a good living and working environment, good pay and development opportunities will attract the talent.

It is important to train workers to make them have a good sense of discipline and responsibility, strengthen the inspection of the implementation of preferential, insurance and salary policies for workers and help businesses deal with strikes.

Developing a labor market transaction system, planning and developing placement centers in different localities, paving the way for investors and workers to meet with each other, training people in accordance with employer demands and requirements, increasing practice-based training, encouraging businesses to participate in workforce training and creating conditions for training facilities to work and exchange information with businesses are what Hai Phong needs to do.

Hai Phong has a plentiful workforce and this is an advantage of the city. This advantage can be brought into play to attract more FDI only when the city has appropriate policies on training and the use of the workforce.