Any development must have a driving force. Socio-economic development is based on many resources: human resources (human resources), material resources (material resources, labor tools, labor objects, natural resources), financial resources (resources). about finance and currency), etc but only human resources create the driving force for development; other resources can only be effective through human resources.
Human resources directly affect the investment decisions of foreign enterprises
The primary and secondary factors that can influence the investment and location strategy decision of a new company are: a) Workforce Group (wage costs, availability yes, stability, productivity); b) Market Group (customers, cashew raw materials); c) Facilities group (energy, fuel, transportation, communications, water); d) Group Characteristics of the investment location (climate and terrain, urban development, industrial development, commercial development); e) Other factors (environmental control, cost of living, financial aspects).
Industrial production activities in Vietnam (Source: Internet)
From there, it can be seen that the labor force plays a leading role in attracting foreign direct investment (FDI) in both developed and developing countries because it is the first factor influencing the decision to invest in foreign countries. investors' investment and business decisions abroad.
The reason human resources affect investors' investment decisions comes from the role people play in production. There are many definitions of human resources. According to the definition of the United Nations, "Human resources are the level of skill, knowledge, and capacity of all actual or potential human life for socio-economic development in a community." copper". According to Nicolas Henry: "Human resources are the human resources of organizations (with different sizes, types, and functions) that have the ability and potential to participate in the development process of the organization along with the development of organizations. socio-economic development of the country, region and world". According to George T.Milkovich and John W.Boudreau: "Human resources are the sum of internal and external factors of each individual that ensure creativity and other content for the success and achievement of the company's goals." organization". But in general, human resources can be defined as the collection of individuals or groups of individuals who have the abilities and skills to perform work in an organization, business or system. Human resources include workers who can be recruited or hired from outside the organization (external human resources) and workers who are already employed within the organization (internal human resources).
Human resources are an important factor in organizational management and development. It includes aspects such as the number of employees, skills, knowledge, experience, creativity and motivation of employees. Human resource management entails recruiting, training, developing, evaluating, and retaining employees to ensure that the organization has enough and the right type of human resources to achieve its goals and succeed in its operations. me.
Human resources play an extremely important role in the success of an organization. Here are some important points about the importance of human resources: a) Contribute to innovation and creativity; b) Human resources are considered the "living assets" of an organization, because they carry knowledge, skills and experience. Employees have the ability to think creatively, come up with new ideas and solve complex problems. Innovation and creativity of human resources help organizations improve performance and compete in the business environment; c) Drive performance and achieve goals; d) Employees play an important role in performing tasks and achieving organizational goals. Their skills and abilities directly affect work performance, production, and product or service quality. If it has high-quality human resources, an organization can achieve maximum performance and get closer to its goals; e) Building competitive advantage. g) Human resources help build competitive advantage for an organization. When there is a team of highly qualified, skilled and creative employees, the organization will be able to respond to change, compete effectively and adapt to a changing business environment. h) Creating value and sustainable development; k) Human resources contribute to creating value for the organization and ensuring sustainable development. With proper training, development and evaluation, human resources will improve their professional skills and thinking, creating benefits for both employees and the organization. Employees who are confident and satisfied with their work will tend to maintain and develop in the organization.
Therefore, a country that has a workforce that meets the needs of foreign investors, has appropriate policies on human resource training and maintains the "health" of human resources will be among the best countries in the world. That has a competitive advantage and can attract FDI capital flows.
Vietnam is known for its abundant and "cheap" human resources, but to continue attracting FDI in the coming period, changes are necessary.
Reality shows that the availability of low-cost unskilled labor is a prominent factor that specifically determines the location of FDI in developing countries, including Vietnam.
Compared to other countries in the region and the world, Vietnam has an abundant labor force. In 2023, our country's total population will reach more than 99 million people. Vietnam is ranked 15th in the world in the population rankings of countries and territories, and is the second most populous country in Southeast Asia.
Of these, more than 60 million people are of working age. The proportion of the population participating in the labor force in the age group 25-29 is the highest. Thus, the number of workers in the working age accounts for more than 60% of the population, ranking 2nd in ASEAN.
Mr. Truong Anh Dung, General Director, General Department of Vocational Education (Ministry of Labor, War Invalids and Social Affairs) said: "Vietnam is in the period of golden population structure, youth is an outstanding feature, is human resource potential. Most are young workers. If we know how to exploit and take advantage of this opportunity, Vietnam will be advantageous in making a breakthrough in human resource development."
The increase in Vietnam's population leads to a strong growth in the number of human resources. This shows that the Vietnamese labor force is always in a state of being able to meet the needs of providing labor for domestic and foreign businesses.
The abundance of unskilled labor has contributed positively to attracting FDI in Vietnam in recent times. Accumulated as of October 20, 2023, the whole country has 38,622 valid projects with a total registered capital of 460.07 billion USD. The accumulated realized capital of foreign investment projects is estimated at nearly 292 billion USD, equal to 63.5% of the total valid registered investment capital. In particular, the processing and manufacturing industry (industries that need a lot of unskilled labor) accounts for the highest proportion, accounting for 60.6% of total investment capital, indirectly clearly reflecting that cheap unskilled labor has helped Vietnam attracts a large amount of FDI.
Although there are many advantages in human resources due to being in the golden population period, however, the current situation of Vietnam's human resources is still limited. Although there is a large number, the quality of Vietnam's human resources is at a low level on the international ladder, with not enough specialized and highly skilled workers. The number of professional workers is only 24.1% of million workers, 2021 figures.
Workers who have been trained and have certificates and degrees at all levels from elementary, intermediate, college to university and postgraduate account for 20.92%. In the past 10 years, the rate of trained workers has increased significantly but still up to 76.9% of workers have not received professional training.
According to data from the Ministry of Planning and Investment in 2019, Vietnam's labor productivity is only equal to 7.6% of Singapore's productivity, 19.5% of Malaysia's, 37.9% of Thailand's, 45.6% of Thailand's. Indonesia, 56.9% of the Philippines and 68.9% of Brunei. Compared to Myanmar, Vietnam's labor productivity is only 90% and 88.7% of Laos. In the Southeast Asia region, our country's labor productivity is only higher than Cambodia.
A study by the Thailand Development Research Institute (TDRI) has shown that most of the soft skills of Vietnamese workers are at an average or weak level, especially teamwork skills, and teamwork skills. leader. The World Bank assesses that Vietnam is lacking skilled workers and high-level technical workers. The foreign language proficiency of Vietnamese workers is not high, so they face many difficulties in the integration process. Limitations and weaknesses of human resources are one of the main factors affecting the competitiveness of the economy. Research by the Institute of Science, Labor and Society (2016) also shows that the level of skill response due to technological change of labor in electronics and garment enterprises is very low.
Based on statistics published in the foreign investment electronic newspaper under the Ministry of Planning and Investment of Vietnam, 37% of recruited workers do not meet job requirements, 39.86% of FDI enterprises lack workers. dynamic, many FDI enterprises spend 1-2 years retraining recruited workers.
The Ministry of Labor, Invalids and Social Affairs assesses that if there are no timely solutions to retrain and supplement skills for workers, especially soft skills and information technology skills, Vietnam will face difficulties. Big challenges, such as: Difficulty improving labor productivity, lagging behind in technology, decline in production and business.
Thus, from a country with the advantage of "cheap labor" in attracting foreign investment, Vietnam is now facing a shortage of high-quality labor to retain and attract more foreign investors. foreign direct investment (FDI) enterprises.
The trend of developing human resources from "abundant quantity" to "high quality" in attracting FDI
Natural resource wealth is not a prerequisite for FDI. Even countries without natural resources can still attract FDI by creating resources that investors demand. This requires the presence of talented and creative individuals, or in other words, a "high quality labor source". This human resource today is perhaps the key to competitiveness for businesses as well as for countries.
Economic theory and practice in developed countries as well as developing countries confirm that the relationship between the labor force and FDI attraction is positive. This means that other factors remaining unchanged, an increased labor force at a sufficient and diverse level will attract FDI inflows into any country, but is only suitable for countries that attract FDI projects using lots of labor. However, in the long run, the number of workers increases but the quality of labor does not increase, leading to the risk of FDI inflows decreasing. Many countries in the early stages of development (from underdeveloped to developing countries) mainly take advantage of the competitive advantages of young, cheap labor, abundant and diverse natural resources and many preferential policies. incentives to attract FDI capital flows. However, these countries realize that unskilled labor is no longer a competitive advantage in attracting FDI capital flows, and due to the continuous development of science and technology and consumer demand, businesses require FDI must change the technological chain in production, business and corporate governance.
Semiconductor industry human resource development workshop in Da Nang city 2023
The change in science and technology from the 4.0 Industrial Revolution is the most obvious change.
First, Industry 4.0 shifts the labor structure in economic sectors. With the 4.0 Industrial Revolution, traditional occupations that use a lot of labor will gradually disappear, while new occupations will appear. Industrial Revolution 4.0 has given birth to automation systems and smart robots.
Second, the labor market is strongly differentiated: In the 4.0 Industrial Revolution, cheap labor is no longer a competitive advantage for countries around the world. A series of old occupations will disappear, and the international labor market will be strongly divided between low-skilled workers and high-skilled workers.
Third, the requirement for high-quality human resources is increasingly urgent: Industrial Revolution 4.0 requires increasingly high-quality human resources, while Vietnam's high-quality human resources are currently lacking in both quantity and skills. workmanship. Industrial Revolution 4.0 is a digital revolution, but high-quality human resources in Vietnam's information technology, computer engineering, automation... industries are too few. Fourth, fierce competition in human resources: First of all, competition will occur in a number of technology fields that are starting to be widely applied in practice, creating pressure to recruit and develop relevant human resources. Right in our country, human resources in the fields of artificial intelligence, Internet of Things, self-driving cars, Robotics... are being "hunted" aggressively and paid "huge" salaries.
Therefore, in order to attract FDI in the context of continuous development of science, technology, markets, etc., improving human resources is a mandatory trend and cannot "stand still" with the advantages of low cost labor.
Solutions for developing high-quality human resources in Vietnam to increase the competitiveness of Vietnam's investment destination
Currently, there are many concepts of high-quality human resources. In our country, the first time the term high-quality human resources appeared was in the Document of the 10th Party Congress, which affirmed: "Rapid development." High quality human resources, especially leading experts in the industry." It has shown that in Vietnam's human resource development strategy, there are new points that focus on developing high-quality human resources, seeing it as a breakthrough to soon bring our country out of underdevelopment. development, at the same time creating rapid development, meeting the requirements of the international integration process.
High quality human resources are a part that crystallizes the most quintessential human resources. A group of workers with high levels of education and technical expertise, good labor skills, creative capacity, and must have industrial style and professional ethics. Especially the ability to adapt quickly, meet practical requirements, know how to apply knowledge, skills and experience that have been trained and accumulated during the working process to bring about consistent production results. high productivity, quality and efficiency. High-quality human resources are the core force in both quantity and quality of human resources. High-quality human resources have a core force of skilled workers - those who directly produce goods and provide services to consumers both domestically and abroad. The "leading" workforce of high-quality human resources is the intellectual team.
Discussion on human resource development in the information technology field in Da Nang 2022
Vietnam is currently transforming the growth model of using unskilled labor and resource exploitation to skilled, high-tech, environmentally friendly labor. However, to have a workforce of sufficient quantity and high quality to suit the new growth model and attract high-tech FDI projects in the coming years, Vietnam needs to consider implementing solutions. following method:
a. Understanding the country's economy
Correct awareness of the current economic development situation of society will help the process of building human resource development strategies to meet urgent needs. In particular, the need for high-quality human resources needs to be commensurate with development potential, bringing great investment attraction to Vietnam.
It is indispensable to improve and understand the role of high human resource development in sustainable economic development. High quality human resources have been and will be awakened; Awaken potentials and strengths that have been dormant or have not been used at the right time and in the right place in the most effective and reasonable way.
b. Population development strategy
Continue to maintain a young population through appropriate population policies to ensure the supply of labor as well as ensure the creativity, ability to learn, and absorb knowledge of the labor force for young workers. Capable of absorbing and applying high technology.
c. Focus on training and training funding support
- Invest in education development, improve workers' qualifications, and build a team of high-quality human resources. Improving the quality of human resources needs to be one step ahead and must be done in a fundamental and methodical way. Orientation for developing high-quality human resources for the activities of training and vocational schools and awareness of self-study and vocational training of students and workers in accordance with labor market development as required industrialization, modernization and integration including professional quality standards; Professional practice capacity; Soft skills, especially communication and teamwork skills; Discipline, professional ethics and labor responsibility; Ability to apply information technology and use 1 foreign language well; Specific understanding of the labor market and labor law.
- It is necessary to identify an appropriate and quality training program framework suitable to the needs of social work and businesses. Limit spontaneous training that does not ensure quality, causing labor surplus and increasing unemployment. The quality of training at university and college levels is very important in providing high-quality human resources for society. However, training needs to have specific strategies to avoid wasting training resources of the state, individuals, families and the whole society. In addition to input orientation, Universities and Colleges are a very necessary requirement for balancing human resources today and in the coming years. Master plan for vocational training, reorganize the vocational training system based on forecasting labor market needs and training capabilities of vocational schools, develop a number of schools to meet regional and international standards, Improve training efficiency to attract more students. Invest in the development of professional organizations to expand and comprehensively expand the scale of career guidance activities for students in middle and high schools. Career guidance must direct attention and stimulate career development. Students' interest in socio-economic professions that the locality and the country need to develop; Help students self-assess and test their own abilities, strengths, and conditions for vocational training and participating in the labor market in a positive way, in accordance with the key issues students wish to pursue. career guidance: occupations, employment trends of the labor market; Orientation on interests and career strengths; regulations on entrance exams and admission to universities, colleges, intermediate schools, and vocational training; Choose a major, choose a school that matches your academic ability and family economic conditions; Introduction to schools and training majors, output standards and employment possibilities after graduation.
- Expand the scope of career guidance for pupils and students, invest in developing training programs suitable to the needs of social work and businesses, improve the qualifications of workers, and build human resources. high quality force.
- Promoting links between businesses and training institutions is considered necessary because this relationship has not been strongly developed in Vietnam.
- Promote the development of information technology application skills for the workforce to meet the goal of enhancing information technology application capacity for the workforce, meeting socio-economic development requirements before the impact of the Fourth Industrial Revolution.
- There are support packages for students studying majors that are being prioritized for development in the near future in Vietnam.
- Build a team of teachers, lecturers, and vocational trainers to promptly train new occupations.
d. State management work
- Strengthen state management to promote human resource development, promote linkage and synchronous cooperation in career guidance activities, enrollment, training, and practice linking employer needs dynamic. Improve skills for workers through the following specific actions: Conduct surveys, regularly update and publish national surveys on skills supply and demand; Develop a coordinated program combining many fields, from short-term vocational training, school-business linkages to long-term learning program reform; Nurture and develop creativity through attracting talent.
- To attract FDI in the coming time, it is necessary to strengthen state management, strongly attract foreign investment, determine to attract high-tech, environmentally friendly projects and especially gradually shift to attracting foreign investment with the advantage of cheap labor costs to compete with high quality resources; Review and amend laws and policies to strongly attract foreign investment, especially projects with high technology, environmental friendliness, value-added products and high localization rates, joining production networks and global value chains, promoting economic restructuring.
e. Coordination of FDI enterprises
- FDI enterprises must innovate technology and prioritize recruiting highly qualified workers, which will encourage workers to be interested in studying to improve their qualifications, and will also put pressure on universities and centers. , training institutions will also be under market pressure to innovate and improve training quality. On the other hand, quickly retrain low-skilled workers to adapt to technological changes, in line with the trend of the 4.0 industrial era, increasing knowledge content in products, improving productivity. labor rate. On-site training, external training and improving the qualifications of workers, technicians, and managers with sufficient management capacity, scientific and technological qualifications to replace foreign experts.
- FDI enterprises must ensure the legitimate rights and interests of Vietnamese workers, recruit foreign workers in accordance with the law... Avoid conflicts and tensions in labor relations, ensure Ensure local political and socio-economic stability, ensure a good business and investment environment in Vietnam.
g. Learn from experiences from countries around the world
Observing and learning from experiences in human resource development around the world helps Vietnam gain more experience in developing domestic human resources. Currently, Vietnam does not really have a tool to evaluate employee capacity appropriately and accurately.
Therefore, the standardization of sets of standards for skills, expertise, and qualifications is necessary. This creates a competency framework for each profession, assessing personnel capabilities more accurately and effectively.
Duy Hoa
