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Vietnamese enterprises grappling with talent strategy

Released at: 14:17, 11/05/2017

Vietnamese enterprises grappling with talent strategy

Photo: Khanh Chi

Local companies well behind MNCs in building talent management strategies from the outset, Talentnet seminar told.

by Hong Nhung

Multinational companies (MNCs) focus on building talent management strategies right from the early stage of their business but many of Vietnamese companies do not, the “Talent Management Strategy: Build to Win” seminar hosted in Ho Chi Minh City by Talentnet heard.

More than 50 CEOs from both local companies and MNCs in Vietnam defined certain challenges that their companies are currently facing in resolving the talent strategy puzzle, following the results of the first-ever survey about the views on talent management among CEOs in Vietnam.

More than 53 per cent of Vietnamese businesses out of 63 respondents still do not have a proper concept of a “talent management strategy” and are struggling with the psychological fear over building, buying, or borrowing rising stars in the company.

“This mindset is rooted in leadership capacity constraints, standardization in the establishment of the human resources (HR) system, as well as differences in human capital purposes,” said Ms. Tieu Yen Trinh, CEO of Talentnet. “While 69 per cent of MNCs defined the criteria and the framework for selecting their talent pool and have an obvious tendency to build their talent internally, local firms own a mixed talent pool from different sources (build, buy, and borrow). This is mainly due to a lack of a strategic talent assessment system that allows companies to evaluate the right people for the right business goals in the long term.”

The poll of 63 CEOs also found that an overwhelming majority believe people capacity is one of the major concerns for their business and had HR strategies in place. A majority perceived “Talent Management” as a system with defined tools to help them achieve talent objectives, and it was more defined at multinationals than local companies.

However, talent strategies were lacking at nearly half of local companies and a few multinationals. Ms. Trinh told the gathering that 47 per cent of the CEOs polled revealed they have a talent strategy linked to their business strategy, while 17 per cent said they had a strategy but it was not linked to their business strategy because it was too complicated and depended on the competence of HR and line managers to be executed. The remaining 36 per cent said their business did not have a talent strategy.

According to Ms. Trinh, many Vietnamese firms, after a period of rapid growth, encounter a bottleneck when they do not have sufficient human resources with the skills and mindsets needed for that stage of development. They then think of investing in talent, but by then it is too late.

According to the survey, the main HR focus this year at both local and multinational companies is training and developing their existing workforce and enhancing workforce productivity. The survey pointed out some obstacles Vietnamese companies face in developing and implementing a talent strategy, such as the lack of line managers’ involvement in identifying employees’ profiles, their bias in assessing talent, and their belief that the development of people’s capacities and careers is HR’s job. 

Other obstacles are that line managers do not want to share their talented workers with other departments or business units and there are no different reward schemes to recognize and retain talent, Ms. Trinh said.

Vietnam was ranked 86th out of 118 countries in the latest annual Global Talent Competitiveness Index (GTCI), which measures how countries grow, attract, and retain talent. According to the report, Vietnam scores relatively better in global knowledge skills (i.e. using the available higher skills to support innovation and engage in entrepreneurship).

But the country is struggling in terms of attracting talent and developing a pool of vocational and technical skills, Ms. Trinh said. Talking about talent challenges in the region, Ms. Joanna Yeoh, a strategic HR and talent management practitioner, said “the region has a very large number of young workers but lacks depth of expertise and managerial skills and suffers from brain drain and migration.”

“It has an improving educational system but low skill confidence, multinationals entering the market and hiring away talent, and compensation costs outpacing productivity and ability,” she said.

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