Business Environment in Vietnam
Vietnam has a really fast growing economy that attracts more and more companies to come and settle plants in this country because of political and social reasons. Vietnam has also had a constant growing GDP since the early 2000s which has attracted many companies to do business in this company including Vietnam. Below there’s a chart that illustrates the increase that Vietnam has seen in their GDP with now a single drop seen since the early 2000s.
With such an increasing and positive pattern in the economy of Vietnam there is no question of why a company would want to do business in the country. One thing that company really needs to take in consideration are the way that their local working population are used to work compared to what the company is expecting from their employees to keep the new plan running smoothly. Compared to the United States culture, Vietnam has more things alike than different from our everyday routine and the way that we are used to work. Even though these both countries have really similar working environments it will still take some adjustment for the two companies to successfully work together regardless of what type of industry they are in.
As far a religion goes, in Vietnam the population is not really dedicated to religion. They believe in some type of philosophy called Confucianism and has a big influence in the way that Vietnamese people think and the traditions that they follow. The two most common religions in Vietnam are Christianism and Buddhism but for the most part the population just worships their ancestors therefore it’s not common for people to put restrictions on their working schedule or ask for any particular days off because of religion purposes.
Vietnamese people for the most part take their jobs quiet seriously, they tend to be always on time but they also have a small window of tolerance for being late a couple minutes. When it comes to work meetings they are really tense and focused on business. Also, in Vietnam is not usually common to experience gender discrimination at the work place however males do outnumber the female gender in the working population. They also tend to be more tolerant when it comes to sexual harassment, meaning that something a US employee might be calling the Human Resources department for a Vietnamese employee just let’s slide, for the most part in order to be considered sexual harassment there has to be some type of physical contact involved. Another thing where Vietnam is a bit different than the United States are in the aspect where Vietnamese employees tend to build a personal relationship with their coworkers and tend to want to spend time outside of working hours, therefore it is common for the company to host some type of social event for the employees to get to know each other better and be able to work better as a team. Another thing that might be seen as common in Vietnam are business contracts to be signed at dinner, with drinks or doing some other type of entertainment activities rather than at a conference room how we are used to seeing in the United States. In Vietnam, there is also an extremely high power distance between employees and their superiors, they are thought to respect anyone that is older or has a higher position than them. Something that I did learn as well is that the Vietnamese culture are social and united, they are hospitable and treat guests well. It is common that as a visitor or tourist you’d be taken out on lunch or dinner by a local person and they are also expecting other’s to do it in return when a Vietnamese citizen visits another country this is why one of the rankings where Vietnam happens to be really different from the United States is individualism as to where Vietnamese culture tends to be more united and cares about other the United States culture tends to be more selfish and care less about building relationships with others around them.
As far as communication skills and body language, both the United States and the Vietnamese culture can get really confused by the way that the other talks or expresses some type of way. Whenever a Vietnamese person smiles does not necessarily mean that they are happy how anyone from a western country would assume but rather they might be saluting you, they are trying to be friendly, they are embarrassed or are sorry for something that they did wrong. Another gesture that is not common between the Vietnamese culture is the handshake, in western countries it is an everyday thing that someone does when wanting to salute someone in a formal way, whereas in Vietnam they are just simply not thought that way, therefore if a Vietnamese person does not shake your hand or does it loosely it’s not because they don’t have manners or they are not being professionals, that’s simply not a thing that is done in their home country. Something really important that would mostly confuse people is the language structure that Vietnamese people use when answering a question, sometimes whenever a “Yes” or “Ok” is used at the beginning of an answer does not necessarily mean that they are agreeing with you but rather they are just stating that they heard what you said and understand, what you want to pay attention is what comes after the “Yes” or “Ok” because their answer might be worded “Yes, I don’t think that’s right” and that can be quiet confusing to someone from a western country. In Vietnam, silence is also a sign of understanding or agreement when speaking to someone and they don’t say anything back it might just mean that they have no objection to what you just said.
When it comes to dressing attire in the workplace, Vietnamese people tend to be more casual. In a Western country someone that works at a corporate office would typically wear a suit and a tie as part of their professional look, in Vietnam that is rare they tend to dress with just a button up shirt and slacks which for us that is business casual and they consider it formal attire. This is something that might be cause by the hot climate that is experienced in Vietnam as it is more common for someone from the north to wear suit and tie than the south. The only occasion where you might see an employee wear a suit and a tie is if they have an important meeting or they are about to sign a contract.
Vietnam’s laws state that must have 12 days of annual leave even though some companies might be more generous with their employees and allow up to 20 days. As far as the employees for the most part chose to not take long vacations but rather use up their leave days to take several short ones. They also have the right to 10 days of public holidays and Tet which is their way of celebrating the Lunar New Year and lasts for about 5 days. Tet is the biggest holidays celebrated in Vietnam and it is also usually around that time of the year when employees take additional days off using their annual leave even though companies may not allow it for a lot of people since they already have to stop business for 5 days because of the holiday.
Like I mentioned before what attracts companies to work in Vietnam is cheap labor, with a population willing to work for way less than the price that another country this gives companies a huge opportunity to maximize profits. Another opportunity that companies can have when coming to do business in Vietnam is the fact that they have a young working population with 74% of them being under the age of 50. However, with every good thing there also comes bad ones and something that Vietnam’s population lacks a good education. Indeed, about 80% of Vietnam’s labor force are unskilled and have no type of qualifications to work at a job that requires higher knowledge. Below there is a graph that shows the percentage of skilled workers and their level of education and one that shows the percentage of workers that fall under a certain age group.
Respecting to this the government has stated that they are working on their education system to eventually have a more educated population but this will take years. It is also stated that the percentage of educated and skilled workers is slowly increasing with time.