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2010 New ParticipantsTotal 68 new participants from various industries
x Financial Services - Non Banking x Hi-Tech
1 Ascendas Land (Singapore) Pte., Ltd. 1 Advanced Micro Devices Far East Ltd. - Vietnam
2 Cathay Life Insurance (Vietnam) Ltd. 2 Autodesk
3 Chartis Vietnam Insurance Company Ltd. 3 Dell Asia Pacific Sdn - Vietnam R.O.
4 Grant Thornton (Vietnam) Ltd. 4 EMC Computer Systems (FE) Ltd.
5 Indochina Capital 5 Emerson Network Power
6 Keppel Land International Ltd. 6 Fuji Xerox Asia Pacific Pte., Ltd.
7 Manulife Vietnam Ltd. 7 Harvey Nash
8 Mapletree Investments Pte., Ltd. 8 Invensys Process Systems (S) Pte. Ltd.
9 PricewaterhouseCoopers 9 Novellus Vietnam Ltd.
10 Prudential Finance 10 Rockwell Automation SEA Pte. Ltd. (Vietnam R.O.)
11 Saigon Asset Management Corp. 11 Sita
12 Toyota Financial Services Vietnam Co., Ltd.
13 Vietfund Management14 Visa International
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x Various Manufacturing x Consumer Goods
1 AB Mauri Vietnam 1 Estee Lauder R.O.
2 Cargill Vietnam Ltd. 2 Henkel Consumer Vietnam
3 Chantelle Vietnam Ltd. 3 Herbalife International of America
4 Doosan Heavy Industries Vietnam Co., Ltd. 4 Moet Hennessy Vietnam Importation Co., Ltd.
5 DSM Nutritional Products Vietnam Ltd. 5 Richfield Worldwide J.S.C.
6 GreenFeed (Vietnam) Co., Ltd.
7 Holcim Vietnam Ltd. x Pharmaceuticals
8 Samsung Vina Electronics Co., Ltd. 1 Beaufour Ipsen Pharma2 Fresenius Kabi Asia Pacific Ltd.
x Chemicals 3 Getz Pharma
1 Chevron Lubricant Vietnam Ltd. 4 Mega Lifesciences
2 Henkel Vietnam 5 Ranbaxy Laboratories Ltd.
3 Jebsen & Jessen (SEA) Pte., Ltd.4 Map Pacific Vietnam Co., Ltd.
5 TOA Paint (Vietnam) Co., Ltd.
6 Total Gas Vietnam
7 Total Vietnam
2010 New ParticipantsTotal 68 new participants from various industries
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x Trading
1 Areva T&D Vietnam Co., Ltd.
2 DKSH Vietnam Co., Ltd.
3 Draeger Medical Vietnam Co., Ltd.
4 Paccess
5 Seco Tools
x Financial Services - Banking
1 BNP Paribas2 Hong Leong Bank
3 Wells Fargo Bank
x Oil & Mining
1 Petronas R.O.
2010 New ParticipantsTotal 68 new participants from various industries
x Other Industries
1 ACNielsen Vietnam Ltd.
2 ALSTOM Holdings
3 Big C Vietnam
4 Expeditors (E.I. Freight Forwarding Co., Ltd.)
5 Federal Express Pacific Inc. R.O.
6 Ingersoll Rand - R.O.
7 Linfox Logistics Vietnam
8 Sealed Air Corp.
9 TNT - Vietrans Express Worldwide (Vietnam) Ltd.
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Survey DemographicsOrganizations by company size
Revenue (USD in millions)
51%
26%
13%
9% 1%
< 25 25 to < 100 100 to < 250 250 to < 1000 >1000
Total Employees
47%
25%
13%
7%8%
< 100 100 to
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Key Findings on 2010 VN TRS
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Vietnam 2010 Overview
With a young population (56% under 30) and low labour cost (2nd lowest
labour cost country after India), Vietnam is an attractive country for FDI
Business conditions in Vietnam have been improving well compared to last
year, consumer confidence re-gains and is ranked number two top confidentcountry according to 2010 Nielsen consumer confidence index
Leaders show high growth expectations towards the Vietnam economy and
their own business
With better growth and more investment, more competition is expected
Top concerns of senior leaders are competitive pressure, ability to pass on
price increase and inflation, shortage of skilled labour, petrol prices and wages
growth
In uncertain times, more information would give more confidence, and being
consistent with peers would give more comfort
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Average Salary Increase TrendUpward trend in light of economic recovery
8.2% 8.5%
6.2%5.3%
6.5%
11.3%
12.6%
14.2%
12.3%
10.4%
11.6%
12.6% 12.4%12.2%
14.3%
2006 2007 2008 2009 2010 (Estimated)
GDP Growth Inc Salary Freeze Exc Salary Freeze
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Average Salary Increase TrendExcept 2008, salary increases have been higher than inflation rates
6.6%
12.6%
6.9%
10.0%
23.1%
11.3%12.6%
14.2%
10.4%
12.3%
11.6%12.6%
14.3%
12.2% 12.4%
2006 2007 2008 2009 2010 (Estimated)
Inflation Inc Salary Freeze Exc Salary Freeze
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Average Salary Increase, 2007 - 2010
0%
2%
4%
6%
8%
10%
12%
14%
16%
2007 13.8% 13.5% 13.5% 12.8% 11.7% 11.1% 12.6%
2008 15.4% 15.3% 13.7% 14.7% 14.1% 14.8% 14.3%
2009 12.5% 12.3% 12.1% 12.6% 12.5% 12.9% 12.2%
2010 (Estimated) 12.2% 12.9% 12.6% 12.6% 12.9% 12.8% 12.4%
Executive Management Prof. - SalesProf. - Non
Sales
Para Prof. Blue Collar Overall
Salary Increase Trend by Staff CategorySlightly higher than 2009 for most levels
Excluding Salary Freeze
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6%
8%
10%
12%
14%
16%
18%
All Industries 11.6% 12.6% 14.3% 12.2% 12.4%
Banking 17.3% 14.6% 15.5% 12.6% 13.9%
Chemicals 11.0% 12.0% 14.2% 13.2% 13.9%
Con. Goods 12.1% 12.0% 14.0% 12.7% 11.7%
Hi-Tech 8.5% 10.1% 10.9% 9.9% 11.4%
Manufacturing 11.3% 12.5% 16.7% 11.8% 13.4%
Pharma 10.1% 12.8% 14.0% 14.0% 13.5%
Oil & Gas 14.0% 13.9% 13.9% 12.4% 11.7%
2006 2007 2008 2009 2010 (Estimated)
Average Salary Increase Trend by IndustryUpward trend for most industries except COG, Pharma and O&M industries
Excluding Salary Freeze
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11.4%
10.5%
12.3%
13.9% 13.9% 13.5% 13.4%
12.3% 12.2%
11.7% 11.7%
12.4%
Chemical FS-
Banking
Phama Manuf Trading FS-Non
Bank
Con.
Goods
Oil &
Mining
Hi-Tech All Ind
Incl Salary Freeze Excl Salary Freeze
2010 Average Salary Increase by IndustryOnly 2 companies reported salary freeze
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Market Movement - Annual Base Salary (COMP1)Moderate movement for Comp1
Median trendline movement, 2009 - 2010
0
300,000
600,000
900,000
1,200,000
1,500,000
1,800,000
2,100,000
2,400,000
2,700,000
3,000,000
41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60
Position Class
VNDin
Tho
usands
Jul-09 Jun-10
Para
Professional
2%
Professional
9%
Management
14%
Executive
18%9%
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Median trendline movement, 2009 - 2010
0
300,000
600,000
900,000
1,200,000
1,500,000
1,800,000
2,100,000
2,400,000
2,700,000
3,000,000
41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60
Position Class
VNDin
Tho
usands
Jul-09 Jun-10
Para
Professional
2%
Market Movement - Annual Guaranteed Cash (COMP2)Moderate movement for Comp2
9%
Professional
8%
Management
13%
Executive
17%
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Market Movement - Annual Total Cash (COMP3)Moderate movement for Comp3 actual
Median trendline movement, 2009 - 2010
0
300,000
600,000
900,000
1,200,000
1,500,000
1,800,000
2,100,000
2,400,000
2,700,000
3,000,000
41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60
Position Class
VNDin
Tho
usands
Jul-09 Jun-10
10%
Para
Professional
2%
Professional
9%
Management
16%
Executive
21%
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Market Movement by Industry
IndustryAnnual Guaranteed
CashAnnual Total Cash
Manufacturing 16% 20%
Oil & Mining 12% 15%
Trading 10% 7%
Pharma 9% 7%
Hi-Tech 8% 10%
Consumer Goods 8% 11%
Chemical 7% 5%
FS - Banking 5% 8%
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Pay Difference by IndustryOil & Mining pays premium in the market
Percentage Deviation from All Industries
(Annual Guaranteed Cash)
Percentage Deviation from All Industries
(Annual Total Cash)
-18%
-8%
1%
1%
6%
7%
9%
12%
87%
-19%
-9%
-1%
0%
-5%
3%
11%
18%
84%
-1 8 % -8 % 1 %1 % 6 %7 %
9 % 1 2 % 8 7 %
Manufacturing Consumer Goods Trading
Chemical Hi-Tech FS - Non Banking
Pharma FS - Banking Oil & Mining
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-28%
-11%
-4%
-7%
-17%
3%
5%
15%
34%
-31%
-15%
-4%
-9%
-28%
-2%
3%
33%
34%
Pay Difference by Industry - Management LevelOil & Mining and Banking pay premium in the market
Percentage Deviation from All Industries
(Annual Guaranteed Cash)
Percentage Deviation from All Industries
(Annual Total Cash)
-1 8 % -8 % 1 %1 % 6 %7 %
9 % 1 2 % 8 7 %
Manufacturing Consumer Goods Trading
Chemical Hi-Tech FS - Non Banking
Pharma FS - Banking Oil & Mining
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Pay Difference by Industry - Professional LevelOil & Mining pays premium in the market
Percentage Deviation from All Industries
(Annual Guaranteed Cash)
Percentage Deviation from All Industries
(Annual Total Cash)
-19%
-8%
0%
-1%
7%
7%
9%
11%
87%
-21%
-10%
-1%
-2%
-4%
3%
10%
11%
84%
-1 8 % -8 % 1 %1 % 6 %7 %
9 % 1 2 % 8 7 %
Manufacturing Consumer Goods Trading
Chemical Hi-Tech FS - Non Banking
Pharma FS - Banking Oil & Mining
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Pay Difference by Industry - Para Professional LevelOil & Mining pays premium in the market
Percentage Deviation from All Industries
(Annual Guaranteed Cash)
Percentage Deviation from All Industries
(Annual Total Cash)
-8%
-4%
5%
8%
33%
13%
14%
8%
158%
-6%
-2%
1%
9%
24%
9%
20%
-6%
152%
-1 8 % -8 % 1 %1 % 6 %7 %
9 % 1 2 % 8 7 %
Manufacturing Consumer Goods Trading
Chemical Hi-Tech FS - Non Banking
Pharma FS - Banking Oil & Mining
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Functional Comparison - Management LevelFunctional pay differences under market pressure
Percentage Deviation from All Industries
13%
8%
-6% -7% -7%
-12%
-17%
-22%
-29%
-8%-6%
-1%-3%
-18%
-14%
-23%
12%
4%
Eng Corp.
Affairs
Mkt Fin Sales HR Supply Contact
Centre
Prod
Annual Guaranteed Cash Annual Total Cash
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Functional Comparison - Management LevelFunctional pay differences under market pressure
Percentage Deviation from All Industries
13%
8%
-6% -7% -7%
-12%
-17%
-22%
-29%
-8%-6%
-1%-3%
-18%
-14%
-23%
12%
4%
Eng Corp.
Affairs
Mkt Fin Sales HR Supply Contact
Centre
Prod
Annual Guaranteed Cash Annual Total Cash
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Functional Comparison - Professional LevelFunctional pay differences under market pressure
Percentage Deviation from All Industries
19%
4%
-1%-3% -4%
-8% -9%
-17%
-19% -21%
-16%-15%
-7%
-13%
-1%
1%
-3%-6%
-1%
17%
Eng Corp.
Affairs
Fin Mkt HR Supply Sales Contact
Centre
Prod Quality
Annual Guaranteed Cash Annual Total Cash
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Functional Comparison - Para Professional LevelFunctional pay differences under market pressure
Percentage Deviation from All Industries
27%
19%
7%4% 3%
-9%
-3% -3% -4%
-10%
6%
-13%
30%
-8%
-3%-1%
-11%
28%
1%4%
11%
23%
Admin Eng IT Supply Fin HR Mkt Prod Contact
Centre
Sales Quality
Annual Guaranteed Cash Annual Total Cash
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Location Comparison
Percentage Deviation from All Industries
(Annual Guaranteed Cash)
3%
-9%
3% 3%
-6%
6%
2%
-3%
-0.4%
HCMC Hanoi Others
Management Professional Para Professional
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0 200,000 400,000 600,000 800,000 1,000,000 1,200,000 1,400,000 1,600,000 1,800,000 2,000,000
Para-Prof - Entry
Para-Prof - Experienced
Para-Prof - Senior
Prof - Entry
Prof - Experienced
Prof - Senior
Mgt - Team Leader (Para-Prof)
Mgt - Team Leader (Prof)
Mgt - Manager
Mgt - Sr Manager
Exe - Sub-Function Head
Pay Progression by Career Stream and Level
VND in thousands
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Fixed Allowances Provided by Companies
Oil & Mining
FS - Non Banking
Pharma
100
15%
Clothing AllowTransport Allow Meal Allow Position Allow Car Allow
% of
Companies
providing
50% 32% 25% 13%
Typical
Monthly
Amount
(VND 000)
Exec: 3,000
Mgt Sales: 1,200
Mgt Non Sales: 1,000
Prof Sales: 800
Prof Non Sales: 400
Para Prof: 200
390 Exec: 6,400
Mgt Sales: 3,000
Mgt Non Sales: 2,000
Prof Sales: 500
Prof Non Sales: 1,100
Para Prof: 400
Exec: 17,800
Mgt: 15,000
Prof: 8,000
Commonly
Provided
in industry
Pharma
Trading
COG
COG
Oil & Mining
Chemicals
Pharma
Oil & Mining
Manuf
COG
Chemicals
COG
Hi-Tech
FS - Banking
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20%
23%
16%
29%
14%13%
14%
18%
25%
19%
27%
15% 16%14%
19%
27%
31%
17%
14%
24%
20%
15%
18%
23%
0%
8%
16%
24%
32%
Executive Mgt - Sales Mgt - Non
Sales
Prof. - Sales Prof. - Non
Sales
Para Prof. Blue Collar Overall
%o
fAnnu
alBaseSalar
2009 (Planned) 2009 (Actual) 2010 (Estimated)
Variable Pay by Staff CategoryActual bonus 2009 was slightly higher than planned, lower than 2010
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Variable Pay by Industry2010 is similar to 2009 for most industries
19%18%
19% 20%
0%
4%
8%
12%
16%
20%
24%
28%
32%
%
ofAnnualBase
Salary
Manuf 14.7% 14.6% 15.7% 15.9%
Oil & Gas 20.3% 21.3% 17.0% 17.0%
Chemical 18.5% 17.0% 19.4% 17.9%
Con. Goods 17.4% 16.2% 19.2% 17.8%
Trading 17.7% 16.4% 16.3% 19.3%
Banking 28.1% 24.8% 22.5% 22.6%
Pharma 26.1% 27.4% 25.7% 27.1%
Overall 18.9% 18.2% 19.3% 19.9%
2007 2008 2009 2010 (Estimated)
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Variable Bonus PolicyHigher variable bonus is also planned for 2010
On-Target Performance Outstanding Performance
14%13% 13%
18%16%16%
15%14%
15% 14%14%
18%
0%
5%
10%
15%
20%
25%
30%
Mgt
Sales
Mgt Non
Sales
Prof
Sales
Prof
NonSales
Para
ProfWhite
Collar
Para
ProfBlue
Collar
%of
AnnualBaseSalary
2009 2010
29%
23%24%
21%
25% 25%
21% 22% 20% 20%
21%
27%
Mgt
Sales
Mgt
NonSales
Prof
Sales
Prof
NonSales
Para
ProfWhite
Collar
Para
ProfBlue
Collar
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Sales Incentives PolicyHigher sales incentives is planned for 2010
On-Target Performance
29%
37%
20%
38%38%
33%
0%
10%
20%
30%
40%
50%
60%
70%
Mgt - Sales Prof - Sales Para Prof -
Sales
%o
fAn
nualBaseSalar
2009 2010
Outstanding Performance
44%
55%
31%
58% 59%
51%
Mgt - Sales Prof - Sales Para Prof -
Sales
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Variable Pay Target for 2010 Provided by Companies
Type of Variable Pay
Exec Mgt -
Sales
Mgt -
Non
Sales
Prof -
Sales
Prof -
Non
Sales
Para -
White
Collar
Para -
Blue
Collar
Variable
Bonus
% of Companies
providing96% 66% 97% 53% 95% 87% 87%
Number of
Months Paid2.6 2.2 2.0 2.0 1.6 1.5 1.7
Sales
Incentives
% of Companies
providing3% 59% 72% 21%
Number of
Months Paid3.3 3.6 4.0 3.3
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Other Compensation TrendMoving from Net to Gross pay structure
2010
Gross
96%
Net
4%
2009
Gross
93%
Net
6%
2008
Net
15%
Gross
82%
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Other Compensation TrendMoving from USD to VND pay guarantee
2008
USD
36%
VND
64%
2009
USD
33%
VND
67%
2010
USD
27%
VND73%
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Other Compensation TrendNumber of months paid
2008
6%10%
78%
6%
2009
7% 14%
74%
5%
2010
5% 15%
76%
4%
6 %10 %
78 %
6 %12 months 13 months
14 months Others
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Staff Turnover by Staff CategoryProfessional level still got the highest rate
Average Staff Turnover, 2007 - 2009
0%
3%
6%
9%
12%
15%
18%
21%
2007 7.7% 15.4% 18.1% 17.1% 15.0% 11.5%
2008 5.6% 12.7% 21.0% 16.2% 10.7% 11.7%
2009 4.7% 11.0% 17.2% 12.2% 10.2% 12.3%
Executive Management Prof - SalesProf - Non
SalesPara Prof Blue Collar
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Average Staff Turnover, 2007 - 2009
0%
3%
6%
9%
12%
15%
18%
21%
2007 17% 21% 11% 19% 18% 11% 17% 12% 9%
2008 16% 19% 15% 16% 19% 14% 16% 16% 10%
2009 17% 16% 15% 15% 14% 14% 11% 8% 6%
Manuf Pharma Hi-TechFS-Non
BankingCG Trading
FS
BankingChemical
Oil &
Mining
Staff Turnover by IndustryManufacturing had highest voluntary staff turnover in 2009
2009 All
Industries
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Average Staff Turnover, 2005 - 2009
13.3%
11.9%
16.4%15.6%
12.3%
0%
5%
10%
15%
20%
2005 2006 2007 2008 2009
Staff Turnover TrendDownward trend after several years in upward trend
impacted by the
economic
downturn in 2009
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Benefit Practices, % Company Providing
8%
21%
35%
38%
66%
81%
91%
11%
21%
35%
41%
69%
87%
92%
Loan
Product Discount
Life Insurance
Car
Travel Insurance
Health Care
AD&D Insurance
2009 2010
Benefit Practice DevelopmentPractices remain very similar to 2009
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2010 Typical Benefits Practice (On Top Of Statutory Requirement)
Item % Co. providing Top Mgt Mgt Prof Staff Dir Lab
AD&D Insurance 92%
Private Health Insurance 87%
Travel Insurance 69%
Car 41%
Life Insurance 35%
Product Discount 21%
Loan 11%
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Private Health CareSimilar to 2009, covering for dependent is more common for management
Employee only
38%
Employee andDependents
62%
Fully paid
by employer100%
Employee only69%
Employee and
Dependents
31%
Fully paid
by employer100%
Employee only
53%
Employee andDependents
47%
Fully paid
by employer99%
Employee only66%
Employee and
Dependents34%
Fully paidby employer
99%Employee only
69%Employee and
Dependents31%
Fully paid
by employer98%
Executive Management
Para ProfessionalProfessional Non SalesProfessional Sales
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Company CarAn attractive benefit to recruit and retain talents
32%
24%
41%43%
28%
33%
Company Owned
Car
Leased Car Car Allowance
2009
2010
2010 Total No. of respondents: 101
2009 Total No. of respondents: 73
K fi di 2010 TRS
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Key findings on 2010 TRSSummary
In light of economic recovery, only 2 companies reported salary freeze
Salary increase rates in 2010 are slightly higher than 2009 for most levels and
most industries
Banking, Chemical, Pharma, and Manufacturing industry reported highersalary increase rate, Hi-tech industry reported the lowest salary increase rate
Oil and Mining, Banking, and Pharma pay premium in the market
Engineering and Corporate Affairs function get higher pay for management
and professional level. For staff level, Engineering and Admin function get
higher pay compared to other functions
Variable pay planned for 2010 performance is higher than 2009 for sales
function and quite similar to 2009 for other functions
Private health insurance is provided by more companies in 2010, other
benefits remain the same as in 2009
Moving from guaranteeing pay in net-USD to gross-VND is the market trend
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Key Drivers for 2011
Remuneration
Economic and Business Environment
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Economic and Business Environment
8.2%8.5%
6.2%5.3%
6.5% 6.4%
2006
2007
2008
2009
2010
(Estim
ated)
2011
(Forec
ast)
GDP (%), 2006 - 2011
6.6%
12.6%
23.1%
6.9%
10.0%
8.0%
2006
2007
2008
2009
2010
(Estim
ated)
2011
(Forec
ast)
Inflation (%), 2006 - 2011
Source: General Statistics Office of Vietnam, IMA Asia May 2010
Labor Demand in 2010
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Labor Demand in 2010Headcount growth is planned to be higher in 2010
1.2%2.2%
2.5%
15.6%
16.4%
13.3%
21.5%
11.3%
14.0%
Staff Retrenchment Staff Turnover Headcount Growth
2007 2008 2009 2010
What is the hiring intention?
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What is the hiring intention?More companies plan to add headcount in the next 12 months
Next 3 months
Reduce
headcount
1%
No headcount
change33%
Recruit to add
headcount
66%
Next 12 months
No headcount
change
25%Recruit to add
headcount74%
Reduceheadcount
1%
Hot Jobs in 2010
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Hot Jobs in 2010
Job Family Level Actual Title
Marketing Management Marketing Manager
Sales Management Sales Manager
Sales Professional Sales Executive, Account Manager
Top 3 - difficulty in recruiting
Job Family Level Actual Title
Marketing Management Marketing Manager
Sales Management Sales Manager
Sales Professional Sales Executive, Account Manager
Top 3 - difficulty in retaining
Salary Increase Forecast for 2011
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1% or More
No change
1% or Less
0-1% Lower
0-1% Higher
Salary Increase Forecast for 2011
0%
5%
10%15%
20%
25%
30%
35%
40%
45%
50%
> 1% lower 0% - 1% lower No change 0% - 1% higher > 1% higher
Exe Mgt Prof-Sales Prof-Non Para Blue Collar
2011 Forecast Salary Increase by Staff Category
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Average Salary Increase, 2008 - 2011
0%
2%
4%
6%
8%
10%
12%14%
16%
2008 15.4% 15.3% 13.7% 14.7% 14.1% 14.8% 14.3%2009 12.5% 12.3% 12.1% 12.6% 12.5% 12.9% 12.2%
2010 (Estimated) 12.2% 12.9% 12.6% 12.6% 12.9% 12.8% 12.4%
2011 (Forecast) 11.9% 12.1% 12.4% 12.2% 12.5% 12.2% 12.2%
Executive Management Prof. - SalesProf. - Non
SalesPara Prof. Blue Collar Overall
Excluding Salary Freeze
2011 Forecast Salary Increase by Staff CategorySalary increase forecasted for 2011 is slightly lower than 2010
2011 Forecast Salary Increase by Industry
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6%
8%
10%
12%
14%
16%
18%
All Industries 12.6% 14.3% 12.2% 12.4% 12.2%
Banking 14.6% 15.5% 12.6% 13.9% 12.3%
Chemicals 12.0% 14.2% 13.2% 13.9% 12.1%
Con. Goods 12.0% 14.0% 12.7% 11.7% 12.3%
Hi-Tech 10.1% 10.9% 9.9% 11.4% 11.5%
Manufacturing 12.5% 16.7% 11.8% 13.4% 12.9%
Pharma 12.8% 14.0% 14.0% 13.5% 13.0%
Oil & Mining 13.9% 13.9% 12.4% 11.7% 12.5%
2007 2008 2009 2010 (Estimated) 2011 (Forecast)
Excluding Salary Freeze
2011 Forecast Salary Increase by IndustryConservative forecast for most industries except COG and Oil & Mining
Factors That Affect Salary Increments
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96%
83%
73% 70%
58%52%
26%
Individual
Performance
Company
Performance
Position in
Salary Range
Inflation Job Level Market
Competitiveness
Length of
Service
Factors That Affect Salary IncrementsMarket Competitiveness is now one of the factors
2011 Variable Pay Forecast by Staff Category
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Average Variable Pay, 2009 - 2011
14%
16%
15%
27%
19%
24%
25%
19%
14%
17%
15%
31%
18%
27%
23%
20%
15%
19%
16%
27%
18%
23%
24%
19%
Blue Collar
Para Prof.
Prof. - Non Sales
Prof. - Sales
Mgt - Non Sales
Mgt - Sales
Executive
Overall
2011 (Forecast)
2010 (Estimated)
2009
y y g ySimilar to 2009 and 2010
2011 Variable Pay Forecast by Industry
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y y y
19% 18%19% 20% 19%
0%
4%
8%
12%
16%
20%
24%
28%
32%
%o
fAnnualBaseSalar
Manuf 14.7% 14.6% 15.7% 15.9% 20.1%
Oil & Gas 20.3% 21.3% 17.0% 17.0% 17.2%
Chemical 18.5% 17.0% 19.4% 17.9% 18.8%
Con. Goods 17.4% 16.2% 19.2% 17.8% 18.2%
Trading 17.7% 16.4% 16.3% 19.3% 24.5%
Banking 28.1% 24.8% 22.5% 22.6% 26.0%
Pharma 26.1% 27.4% 25.7% 27.1% 25.6%
Overall 18.9% 18.2% 19.3% 19.9% 19.3%
2007 2008 2009 2010 (Estimated) 2011 (Forecast)
Cash Compensation Mix
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82% 5% 13%
83% 5% 12%
67% 12% 21%
85% 4% 11%
73% 8% 19%
80% 4% 16%
80% 4% 16%
75% 4% 21%
Para-Professional -
Blue Collar
Para-Professional -
White Collar
Para-Professional -
Sales
Professional - Non-Sales
Professional - Sales
Management - Non-
Sales
Management -
Sales
Executives
Actual Comp Mix
Base Salary Guaranteed Cash Variable Cash
83% 5% 11%
83% 5% 12%
61% 11% 28%
84% 4% 12%
67% 7% 26%
80% 4% 16%
76% 4% 20%
76% 4% 21%
Target Comp Mix
Sales forces have higher target variable pay portion than actual
Key Drivers for 2011 Remuneration
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Summary
In light of economic recovery, up to companies plan to add
headcount to support their business activities in the next 12 months
However, most companies are still very cautious and forecast a
conservative salary increase rate for 2011 due to the economicuncertainty lying ahead
Individual and companys performance are still the two main factors
that affect salary increment decision. Market competitiveness is also a
factor considered by companies
2011 overall variable pay is also conservatively forecasted to be
slightly lower than 2010
Marketing and sales managerial positions are still considered to bedifficult to recruit and retain by the majority of participating companies
How HR Should Prepare for the Future
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Suggested actions
Prepare the workforce for better growth in 2010
Prepare for more competition in skilled labours
Have better preparation to develop, recruit and retain hot jobs,
especially the hot jobs in marketing and sales function
Since compensation is the main factor to attract employee, benchmarkwith your peers to define how competitive your compensation is
Know how much variable pay provided by your peers and improveyour performance management system
Aware of the potential high inflation rate by end of 2010
Keep up with changes on labour law and regulations to manage non
compliance risks
Plan your budget for the increased social insurance contribution up to2014
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Thank You.
Contact Information
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For further information, please contact our consultants at tel: (84 8) 6 291 4188
600Ms Nguyen HoaVN TRS Leader
610Ms Tran Thi Quynh AnhTrading
603Ms Ton Nu Diem NguyenPharmaceuticals
607Ms Duong Thi Thu HuongOil & Mining
601Ms Nguyen Thi Hong VanManufacturing
606Ms Do Thi Thu PhuongHi-Tech
605Ms Hua Ngoc Thuy TramFinancial Services
Industry Contact Person Ext.
Consumer Goods Ms Ngo Ngoc Thuc Doan 604
Chemicals Ms Vo Thi Thuy Diem 611
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Legislative Updates 2010 - 2011
Presented by Nguyen Thi Thanh Huong
Senior Manager, Payroll & HR Outsourcing Services
Contents
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1. Personal Income Tax Highlights in 2010
2. Changes in Minimum Wage 2010
3. Social Contribution Highlights 2010-2014
4. Claim Procedure for Un-employment Insurance
5. Draft of New Labor Law Effective from 2011
Personal Income Tax Highlights in 2010
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Income Tax Exemption (Circular 160/2009/TT-BTC)
Business Per Diem: increased from VND 70,000/ day to VND
150,000/ day (97/2010/TT-BTC Circular) applicable from 20th August
2010
100%Dividend paid in 2009 before 30/06/2010
50%Bonuses paid in 2009 before 03/31/2010
Tax exemptionIncome
Contents
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1. Personal Income Tax Highlights in 2010
2. Changes in Minimum Wage 2010
3. Social Contribution Highlights 2010-2014
4. Claim Procedure for Un-employment Insurance
5. Draft of New Labor Law Effective from 2011
Personal Income Tax Highlights in 2010
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Income Tax Exemption (Circular 160/2009/TT-BTC)
Business Per Diem: increased from VND 70,000/ day to VND
150,000/ day (97/2010/TT-BTC Circular) applicable from 20th August
2010
100%Dividend paid in 2009 before 30/06/2010
50%Bonuses paid in 2009 before 03/31/2010
Tax exemptionIncome
Personal Income Tax Highlights in 2010
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Guideline of conversion from net to gross salary (Document # 3565/TCT-TNCN)
For net salary: converted net to gross salary (document # 1578/TCT-TNCN)
For net salary and net benefits (utilities, medical insurance paid by employers):converted net of salary only, then plus with net benefits to calculate taxableincome.
For both net and gross salary from two sources: converted net into gross salary,then plus with gross salary for personal income tax calculation.
No
Yes
VAT deducted from the housing rental for foreign expertsworking in Vietnam (Document # 2696/TCT-CS)
Have signed a labor contract with Vietnam enterprises
Have signed a labour contract and received salary and benefits from
foreign enterprises
2. LABOUR/WAGES: MINIMUM WAGES IN 2010Minimum Wages in 2010
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Area minimum salary applicable to foreign
entities
Area minimum salary applicable to
Vietnamese entities
Decree 97/2009/N-CP
Unit: VND in
thousands
Entity
in
area I
Entity
in
area II
Entity
in
area III
Entity
in
area IV
Decree 97/2009
(from 01/01/2010) A 980 880 810 730
Decree110/2008
(from 01/01/2009) B 800 740 690 650
Increase C=A-B 180 140 120 80
% of increase D=C/B 22.50% 18.92% 17.39% 12.31%
Decree 98/2009/N-CP
Unit: VND in
thousands
Entity
in
area I
Entity
in
area II
Entity
in
area III
Entity
in
area IV
N98/2009
(from 01/01/2010) A 1,340 1,190 1,040 1,000
N111/2008
(from 01/01/2009) B 1,200 1,080 950 920
Increase C=A-B 140 110 90 80
% of increase D=C/B 11.67% 10.19% 9.47% 8.70%
Source: TalentNet summary and analysis
Changes in Insurance Contribution Rates
Ch l t t ib t i f 01 M 2010
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Unit: VND
14,600,000/month730,000/month1st May 2010
13,000,000/month650,000/month1st May 2009
Capped salary for insurance
contributionCommon Minimum SalaryEffective Date
25%
7%
18%
Total
2%
1%
1%
UI
3%
1%
2%
HI
20%
5%
15%
SI
2009
8.5%1%1.5%6%EE
28.5%2%4.5%22%Total
20%1%3%16%ER
TotalUIHISI
2010Kinds of
comp Ins.
Change on cap salary to contribute insurance from 01-May-2010
(Decree 28/2010/N-CP)
Change on insurance contribution rate from 01-Jan-2010(Decree 62/2009/N-CP)
Changes in Insurance Contribution Rates
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Contribution 2011-2014
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Social Insurance: route of contribution (Social insurance law 71/2006/QH11)
Health insurance: maximum rate will be increased to 6%, in which
employee portion is 2% and employer portion is 4%. No detail plan yet.
(Heath insurance law 25/2008/QH12)
26%24%22%Total
8%7%6%Employee
18%17%16%Employer
20142012 - 20132010 - 2011
Social Insurance Contribution RateRoute
Administrative Fines Related to Social Insurance Contribution
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Acts of violation Penalties
Fines for employers: Decree 86/21010/N-CP effective from 1st Oct 2010
Delinquent contribution of SI and UI 0.05%/ day
Max VND 30 million
Inadequate number of people eligible to participate in socialinsurance 0.3 - 2.5 million/ EE
SI and UI contribution not properly calculated as regulated 0.3 - 0.7 Million/ EE
No participation in social insurance, un-employment insurance
after 30 days of signing the labor contract
0.3 - 0.7 Million/ EE
No payment of insurance claims to employees (sickness,
maternity)
1.5 - 2 Million/ EE
Late payment to employee the reimbursement of sickness,
maternity..claims after 3 days from receiving full regulated
documents
Warning
0.2 - 0.5 Million/ EE
Not return SI book on time when employees stop working Warning
0.5 - 1 Million/ EE
Lose, damage, make correction to the SI books Warning
0.1 - 0.2 Million/ EE
Unemployment Insurance: Claim Procedure
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Conditions for unemployment claim UI contribution from 12 months and above
Legal termination of labor contract or lost job
Un-employed
Documents need to be submit Application form
Termination letter
Social insurance book
ID card or resident book (notarized copy)
Process to receive the unemployment insurance
Emplo
yer
Employ
ee
Un-employed/ Inform toTTGTVL
Within 7 days Within 15 days Submitdocuments
Received UI
Close & return social
Insurance book
Within 7 daysIssue
terminationletter
Deliver the
terminationletter to EE
Within 15 days
Draft of New Labour Law Effective from 1st January 2011
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Labor contracts subleased between thetwo enterprises and agreed by the
employees
Labor sublease
contracts
At least 85% of the basic salaryAt least 70% of the basic salarySalary during
probation period
Total working time up to 31/12/2008 plus
the time that employee did not contribute
to unemployment insurance after that
Total working time up to 31/12/2008Calculation time for
severance allowance
Within 15 days before the labor contract
expired, employee must be notified
Notification before the expired date of
the labor contract is not required
Termination of labor
contract
Definite labor contract is signed only
three times
Definite labor contract is signed only
two timesLabor contract
Draft new labor lawCurrent labor lawRegulation
Draft of New Labour Law Effective from 01/01/2011
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Full paid
holidays
EE: compensate 1 months salary for
indefinite LB & definite LB; month salary
for labor contract under 12 months
EE: can not receive severance
allowance and have to compensate
month salary
Pay 400% of salary (including the work
day on holiday)
Pay 300% of salary (including the
work day on holiday)
Overtime salary
payment
Not exceed 300 hrs/ yearNot exceed 200 hrs/ yearOvertime
ER: Compensate 2 months salary for
indefinite LB & definite LB; 1 month salary
for labor contract under 12 months
Add at least 2 months salary
compensation if the labor contract
terminate
ER: compensation of at least two
months salary and allowances (if any)Unlawful
termination of
labor contract
Holidays: 9 days/ year
Foreigners: add 2 days for their countrysnational holidays
Holidays: 9 days/ year
Draft new labor lawCurrent labor lawRegulation