• Pham Viet Hai

The future of jobs (part 2)/The Times They Are a-Changin'


In the previous post, the mega trend in global labor market has been diagnosed from various angle. It is apparent that the changes brought by The Fourth Industrial Revolution are happening fast and dramatic. It is also obvious that those changes have affected and will continue to shape local labor market in medium term. Continuing from the previous post, Vietnam market is analyzed in conjunction with the global mega trend.

1. Vietnam labor market

Vietnam labor market can be characterized as a youth - predominated market with majority of active job seekers fall under 20s and 30s demographic. The latest surveyed data by General Statistic Office revealed a comparatively young demographic, with the number of population under the age of 15 contributed to 23.9 per cent of total population and those classified as “young” ranging from 15 to 34 years old made up 28.4 per cent of total number. The total population in working ages accounted for 66.1 per cent of the population, which created a dynamic phenomenon that each dependent person is financially supported by more than two people. This is dubbed as the “golden population structure” by the United Nations and is expected to last for more than two decades. This specific time period will represent Vietnam with “golden” opportunity for socio-economic development.




Labor participation rate in Vietnam averaged 77.6 per cent during the last ten years, peaked at 78.4 per cent in 2014 but slowly declined toward 2019. The unemployment rate was very stable during the time period, fluctuated around 2 per cent mark., can be contributed to a period of good economy growth and stable labor market. While unemployment was not a serious issue for Vietnam, the nature of jobs in Vietnam are of a subsistence nature and provide little, if any, direct income


Vietnam labor participation and unemployment rate (2010 – 2019)



(Source: World Bank and General Statistics Office)


The labor participation rate is a measure of economy’s effective workforce, and is the subset of population who have jobs or are seeking jobs divided by the total noninstitutionalized, civilian working-age number. The ratio was relatively high in case of Vietnam comparing to the approximately average number of 65 per cent worldwide. It can be attributed to the high level of woman participating in workforce, but also can be contributed by the low number of young adults seeking higher education.

Surprisingly, the rising number of woman workforce in Vietnam even exceeded the best performers in Western civilizations, which in turn is the extremely positive sign for gender and income equality, economy’s diversity and efficiency. However, the inadequate figure of higher education seekers showed a different picture of our economy. While today’s young people pose a good foundational skill set, the overall education levels of the whole workforce are quite low. Our labor market still leans on family farming, household enterprises, or uncontracted labor. The lacking of sophisticated skills and the abilities to acquire those will hinder the growth of knowledge-intensive areas, service industries and automation.


Labor market main occupations in 2010 - 2019


(Source: General Statistics Office)


The unbalanced in Vietnam economy can be seen clearly with the labor market structure. While the agricultural, forestry, fishery sector have been gradually declined in recent years, this sector still was the largest and accounted for 34.5 per cent of total labor market. There was a shift from people working in agricultural, forestry, fishery laborers to manufacturing, street and market salespersons. The three sectors summed up to nearly 70 per cent of working adults and remained unchanged during this time period. This change was driven by foreign direct investment (FDI) attraction policies of the government and big cities’ urbanization. In short, people gave up tradition jobs in rural areas to work for foreign-owned factories, or move out to big cities to work as street vendors. Despite the positive gains in overall incomes, workers in those sectors are still recognized as low-skills and labor intensive workforce. As the changes brought by The Fourth Industrial Revolution mainly focus on digital markets, technologies, AI and automaton, it is certainly that they are very vulnerable to new technology advancements and susceptible to be left out.

While knowledge jobs are emerging in Vietnam, the progress was nevertheless slow and reductant. Middle and high skill level jobs such asIT and communication, finance professionals, sales and marketing, public relations professionals, engineering played trivial roles in overall economy’s activities. Even among those area, Vietnamese worker still leaned on entry level positions required minimal skill levels and routine-based jobs such as Data Entry, Accounting, Secretaries, Bank Tellers and Cashiers.


Top ten positions by online application in Vietnam Works in H1 2019



(Source: Vietnam Works, “Online Recruitment Market Report H1-2019)



This is mismatched with the forecast given by the World Economic Forum. The short-term outlook for global job market is that the workforce will gradually shift from traditional positions to a more innovative, technical jobs. The only two sectors forecasted to be in high demand in near future which showed up in the ranking were Marketing and IT – Software, but in last two positions respectively. The rest of popular workforce’s current skills and applications were expected to be in decline or expected to be replaced by AI and automation. In that sense, our currently workforce are lagging behind in skill levels, and will require significant effort to catch up and adopt to global trend.

In conclusion, Vietnam labor market have showed several interesting characteristics as a young and ready workforce in a transition period toward higher skill level, higher productivity and income labor market. The transitions largely influenced by foreign factors like FDI or natural workforce movement by urbanization. Thus, majority of people still suffers from the lack of education, skill, and training. While the movement toward high-skill level job market are happening, it is slow, lagging and quite distanced from global trend. It is no mistake that The Fourth Industrial Revolution have already effected Vietnam. If current labor market stays in its course, it will undoubtedly lead to widening gap between labor demand and supply, and toward a period of higher unemployment and less stable economy. It will fall upon firms and government to provide guidance and solutions.

In the next post, I would like to talk more about the role of firms and governments in this quick changing time period. What kind of policies, actions, approach we can take to ensure our labor work can be well-equipped and ready to transit toward technology-demanded society.


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