News South Asia

Vietnamese and foreign businesses compete by offering high pay

In early October, Huynh Buu Quang was appointed to the post of CEO of Maritime Bank. The information caught bankers’ attention because Quang is a familiar name. 

He was named to many high-ranking positions at the Hong Kong and Shanghai Banking Corporation Vietnam (HSBC) for 20 years before taking office as Maritime Bank CEO.

The banking sector has seen the movement of high ranking personnel from the foreign to domestic bank sector.

Vietnam’s VIB Bank, for example, now has CEO Han Ngoc Vu who worked for Citibank, Calyon and Credit Lyonnaise for 16 years, and Le Dinh Long, who was Motorola’s finance director and director of the World Bank’s Vietnam business development program. 

Meanwhile, Mac Huu Tin, who was the head of the international payment division of Deutsche Bank branch in HCM City, now works as deputy CEO for Vietnam’s Sacombank.

The banking sector is now leading in the national economy in terms of bonuses offered to staff, while the highest bonus levels are offered to high ranking managers, according to Talentnet.

A human resource development expert noted that many Vietnamese businesses found it difficult to vie with foreign ones for talented managers because of low pay and an unprofessional working environment. 

However, things are now different. They are willing to pay extremely high salaries and offer the best working conditions to attract talents from foreign invested enterprises.

He noted that Vietnamese businesses had increased bonuses offered to high ranking managers to exceed the salary they expect from foreign invested enterprises. 

He cited a report as saying that in 2014, the ratio of bonus to basic salary offered by Vietnamese businesses was 20 percent, while the figure was 16 percent for foreign invested enterprises.

Vietnamese businesses offer high bonus rates as a compensation for low basic salaries, which helps them attract talented workers. Managers think that workers’ income must be based on real business results, and work efficiency.

In general, directors and high ranking managers at foreign invested enterprises receive  basic salaries which are 50-60 percent higher than managers at the same positions at Vietnamese enterprises. 

Therefore, though the ratio of bonus to basic salaries offered by foreign invested enterprises is a little bit lower than that offered by Vietnamese, the total income high ranking managers can expect from foreign invested enterprises is still higher.