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RESEARCH - EXCHANGE
Productivity and quality of Vietnamese labor at the doorstep of ASEAN economic community
9:30' 12/23/2015
According to Action Plan that has been approved by leader of ASEAN countries, ASEAN Economic Community will officially be established in 31/12/2015. According to this plan, AEC will become a stable, prosperous economic region that is highly competitive, in which goods, service and investment capital will be able to move freely, economic growth becomes more uniform, poverty and socio-economic disparity will diminish.


Vietnam’s labor productivity lagged behind other neighboring countries

The AEC’s objective is to promote fair economic growth, establishing highly competitive economic region from which ASEAN can fully and solidly integrate into world economy. AEC is expected to become the most dynamic region that will have big influence on world economy with annual GDP of 2,000 billion USD and growth will accelerate rapidly in upcoming years, AEC is composed of 10 nations with total population of more than 620 million people, wherein there are 300 million people of working age. Three countries whose workforce make up more than 70% include Indonesia (40%), Philippines (16%), and Vietnam (15%). The liberation and freedom of labor force to move around in common market will foster the socio-economic development of member states.

Opportunity and challenge

Formation of AEC will enable labor market in ASEAN to become more dynamic, promoting common creation of job among member states. According to forecast by ILO, after joining AEC, the number of job in Vietnam will increase to 14.5% in 2025. However, due to uneven level development, high quality and highly skilled workers tend to move to such markets as Singapore, Malaysia, and Thailand. Remaining workforce moving around ASEAN are low-skilled or unskilled workers. ILO’s finding from the survey of employers in 10 ASEAN countries show that, enterprises in the region are highly concerned with the shortage of highly skilled labor before the formation of AEC in 2015. Specifically, nearly 50% employers said, employees who graduated from high school lack skills they need. On the other hand, over 50% employers said that, university graduates possess useful skills but yet to meet the demand from enterprises (in terms of both quality and quantity).
When joining AEC, Vietnam has a number of advantages, especially the scale of young labor force. According to statistics released by General Statistics Office, as of mid-2014, the number of young labor force aged 15 or higher is 53.8 million people, in which number of people in working age is 47.52 million. Proportion of labor in agriculture, forestry and fishery is 47.1%; industry and construction is 20.8%; service is 32.1%. Labor quality also increases gradually; ratio of trained labor increases from 30 % to 40% within 10 recent years (according to calculation by the Ministry of Labour – Invalids and Social Affairs), in which proportion of labor who undertook vocational training is 30%. Trained laborers have been able to meet requirements from enterprises and labor market to a certain extent. Technical workforce in Vietnam have grasped the knowledge of science – technology, and be able to assume complex positions in business – production which were previously undertaken by foreign experts.
However, due to low base, wherein economic structure is primarily agriculture, therefore, the proportion of labor involving in formal labor market remains low at approximate 30%. The quality and structure of labor is inadequate compared to requirements for development and integration. Approximately 45% of labor in agriculture are untrained. According to calculation by the Ministry of Labour – Invalids and Social Affairs, labor who undertook vocational training (including both full-time and continuous vocational training, part-time training, vocational training with duration of less than 3 months, in-enterprise vocational training) account for 34% of total workforce, but the quality of Vietnamese workforce is low and there remains a gap between Vietnam and advanced countries in the region. According to World Bank (WB), on the rank with maximum point of 10, Vietnam’s workforce quality can only be given 3.79 points – which is ranked 11/12 of ASIAN countries in the ranking by WB; Korean workforce is graded 6.91; India 5.76; Malaysia 5.59; Thailand 4.94….Due to low quality of workforce, Vietnam’s productivity is one of the lowest in Asia – Pacific, 15 times less than that of Singapore, 11 times less than Japan and 2/5 times less than Thailand. During period of 2002-2007, productivity increases by 5.2% on average. However, since financial global crisis in 2008, Vietnam’s increase in productivity decelerates at 3.3%. Vietnam faces shortage of skilled labor while trained laborers are unable to meet the demand for skills and other soft skills from labor market and enterprises. According to organizer of IELTS test (a system that assesses English proficiency on the scale of 0-9), average score of Vietnamese candidates is 5,78 which is ranked in the list of lower-average countries, behind Indonesia (5,97), Philippines (6,53), Malaysia (6.64). Those shortcoming, deficiencies of workforce is primary factors that affect the economy’s competitiveness (ranked 65/141 in 2011).
Low quality workforce derives from many reasons, one of which is inappropriate training, training quality has limitations. 8th Plenary Session (11th Central Committee) admitted that: “Education quality is low, especially university and vocational education, being unable to meet demand for labor and demand from learners, being unable to meet the demand for the country’s transition in a period of industrialization, modernization and international integration is one of main reasons that restrain the quality of labor force… The relationship between quantity and quality, between teaching literacy and teaching human, vocational training has yet to be addressed,…”

The solution for increase of workforce quality

The economic experts pointed out that, growth based on fundamental advantages, such as natural resource exploitation, use of outdated technology, cheap labor…may ultimately become hindrance to the development in the next period. The use of cheap labor with low productivity gives the laborers no time for re-training, if new technology comes into picture, labor skill can not be able to satisfy the requirement of modern technology so that the economy may fall into a cycle that may lead to extreme imbalance in factors of production, as the result the economic development may be impossible.
In such a context, in order to enhance the quality and competitiveness of Vietnam’s workforce in domestic and international labor market, especially when our country becomes a member of AEC, rigorous reform of education-training system, especially vocational education is very much required. Resolution by 8th Plenary Session (11th Central Committee) proposed 9 groups of solutions for fundamental and complete education-training reform. In vocational education, according to us, fundamental solutions shall focus on the following:
 First, increase the awareness of vocational education. Party Committees, governments shall fully understand the Resolution of 11th National Congress and Resolution of 8th Plenary Session (11th Central Committee) on the role, position of vocational education in the development of labor force and in the strategy of the country’s workforce development for the period of 2011-2020 in order to lead the construction planning of labor force for the Ministries, sectors, localities and for implementation. Vocational education should be viewed as development investment, shall be prioritized in programs, projects of socio-economic development in each locality, region, sector. Apart from that, there is a need to create a ladder of vocational value in the society.
Second, robust policy, institutional reform. Complete legal system of vocational education. Law on vocational education approved by the National Assembly stipulates the mechanism for vocational institutions to become independent entity; the leader of the institution shall be liable and be trained in management of vocational education. Complete the mechanism, policy of vocational training. Provide remuneration policies to attract vocational teachers; policies toward laborers who undertook vocational training; policy of education transfer, support for vocational learners. Create the mechanisms from which enterprises, employers can participate in the construction, assessment, amendment of training curriculum, guide the practice and skill assessment for the learners, enterprises shall be viewed not only as “partner” but vocational trainer, as beneficiaries of training outputs. Reform financial policies of vocational education; create the basis for education order for vocational education institutions, no discrimination against types of ownership.
Plan the network of vocational education institutions in line with the development of each region, locality, sector; concentrate the distribution of high quality schools in primary economic regions; encourage the cooperation and establishment of vocational education institutions by foreign investment. Establish specialized vocational education institutions for the disable, provide vocational training for ethnic minority.
Intensify the socialization, diversification of resources for development of vocational training including the state, enterprise, learner, domestic and foreign investors, in which state budget is highly important; the Government has policy to provide support of capital, land, taxation for non-public vocational education institutions.
Third, innovate the structure of vocational education in national education system. Transform vocational education from a closed system into an open, flexible system that facilitates the linkage between systematic factors and linkage between different levels in national education system. Innovate systematic structure of vocational education based on national qualification framework, vocational skill standard in alignment with the context of the country and regional and global tendency.  In order to improve the capacity and quality of training, a vocational education system consisted of 3 levels which are primary, secondary and college shall be implemented on the basis of merging vocational secondary and professional secondary; vocational college and college in accordance with the rules specified in Law on Vocational Education.
Fourth, increase the conditions to ensure vocational quality, that includes development of vocational teachers/lecturers; standardize training qualification, pedagogical skill by levels (national, regional and international) and by training qualification. Develop training program in line with modern production technology in an open, flexible manner that suits all levels and training qualifications; apply a number of training programs from advanced countries in the region and the world in line with Vietnam’s socio-economic requirement. Implement accreditation of vocational education institutions and accreditation of training programs. Focus efforts on construction and promulgation of national vocational skills standard; organize the assessment, issuance of national skill certificate to the laborers. Standardize training facilities and equipment; issue the standard of training facilities and equipment for each occupation at different levels based on output standard.
Fifth, innovate training activities. Divert training program from the provision of knowledge to the development of skills and the ability to apply skills for learners. Diversify training content to incorporate knowledge, skill, attitude so that vocational capability of learners can take shape. Vocational education institutions are solely responsible for training activities ranging from student recruitment, construction of training programs; design of training plan, evaluation of training results with the involvement of enterprises. Vocational education institutions are in charge of ensuring training quality; ensuring standardization of “input”, “output”; perform self-assessment of training quality and be subject to periodic assessment by national quality accreditation agencies. Innovate the management of teaching and learning process, the content, type of examination and evaluation of training results in which the assessment should be focused on the understanding, application of knowledge, skill into addressing actual problems, with the involvement of enterprises and representatives of employers.
Sixth, create a linkage between training and labor market and the involvement of enterprises. Establish solid relationship between vocational education institutions and labor market at both macro level and local level ensuring that the activities of vocational education system focus on socio-economic development of each locality, sector; meet the demand from enterprises and address the issue of job seeking for learners. Enterprises directly  involve in construction of vocational skills standard, identification of occupation portfolio, building of training program, assessment of learners’ learning results….The enterprises have responsibility for providing vocational institutions with information, feedback of satisfaction level on training “product” of the vocational institution. Vocational institutions implement the tracking, collecting of information of vocational learners after their graduation; be in charge of receiving information from enterprises and adapt to the requirements of the enterprises. Develop an information system of labor market to link the training with the labor usage. Aim to establish Vocational skill councils.
Seventh, promote international cooperation in vocational education. Increase international cooperation in vocational education with countries in ASEAN region and in the world. Be pro-active in attracting official development assistance (ODA) for development of vocational education. Cooperate with ASEAN countries in mutual recognition of vocational skills in preparation for formation of ASEAN community in 2015. Actively engage in different regional and global activities such as ASEAN skill competition, WorldSkill competition…
                                                                                            Dr. Nguyễn Hồng Minh – Deputy Director General of General Directorate of Vocational Training

 

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