luong-luat lao dong (2)

8/6/2019 Luong-Luat Lao Dong (2)

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2010 New ParticipantsTotal 68 new participants from various industries

x Financial Services - Non Banking x Hi-Tech

1 Ascendas Land (Singapore) Pte., Ltd. 1 Advanced Micro Devices Far East Ltd. - Vietnam

2 Cathay Life Insurance (Vietnam) Ltd. 2 Autodesk

3 Chartis Vietnam Insurance Company Ltd. 3 Dell Asia Pacific Sdn - Vietnam R.O.

4 Grant Thornton (Vietnam) Ltd. 4 EMC Computer Systems (FE) Ltd.

5 Indochina Capital 5 Emerson Network Power

6 Keppel Land International Ltd. 6 Fuji Xerox Asia Pacific Pte., Ltd.

7 Manulife Vietnam Ltd. 7 Harvey Nash

8 Mapletree Investments Pte., Ltd. 8 Invensys Process Systems (S) Pte. Ltd.

9 PricewaterhouseCoopers 9 Novellus Vietnam Ltd.

10 Prudential Finance 10 Rockwell Automation SEA Pte. Ltd. (Vietnam R.O.)

11 Saigon Asset Management Corp. 11 Sita

12 Toyota Financial Services Vietnam Co., Ltd.

13 Vietfund Management14 Visa International


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x Various Manufacturing x Consumer Goods

1 AB Mauri Vietnam 1 Estee Lauder R.O.

2 Cargill Vietnam Ltd. 2 Henkel Consumer Vietnam

3 Chantelle Vietnam Ltd. 3 Herbalife International of America

4 Doosan Heavy Industries Vietnam Co., Ltd. 4 Moet Hennessy Vietnam Importation Co., Ltd.

5 DSM Nutritional Products Vietnam Ltd. 5 Richfield Worldwide J.S.C.

6 GreenFeed (Vietnam) Co., Ltd.

7 Holcim Vietnam Ltd. x Pharmaceuticals

8 Samsung Vina Electronics Co., Ltd. 1 Beaufour Ipsen Pharma2 Fresenius Kabi Asia Pacific Ltd.

x Chemicals 3 Getz Pharma

1 Chevron Lubricant Vietnam Ltd. 4 Mega Lifesciences

2 Henkel Vietnam 5 Ranbaxy Laboratories Ltd.

3 Jebsen & Jessen (SEA) Pte., Ltd.4 Map Pacific Vietnam Co., Ltd.

5 TOA Paint (Vietnam) Co., Ltd.

6 Total Gas Vietnam

7 Total Vietnam



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x Trading

1 Areva T&D Vietnam Co., Ltd.

2 DKSH Vietnam Co., Ltd.

3 Draeger Medical Vietnam Co., Ltd.

4 Paccess

5 Seco Tools

x Financial Services - Banking

1 BNP Paribas2 Hong Leong Bank

3 Wells Fargo Bank

x Oil & Mining

1 Petronas R.O.


x Other Industries

1 ACNielsen Vietnam Ltd.

2 ALSTOM Holdings

3 Big C Vietnam

4 Expeditors (E.I. Freight Forwarding Co., Ltd.)

5 Federal Express Pacific Inc. R.O.

6 Ingersoll Rand - R.O.

7 Linfox Logistics Vietnam

8 Sealed Air Corp.

9 TNT - Vietrans Express Worldwide (Vietnam) Ltd.


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Survey DemographicsOrganizations by company size

Revenue (USD in millions)

51%

26%

13%

9% 1%

< 25 25 to < 100 100 to < 250 250 to < 1000 >1000

Total Employees

47%

25%

13%

7%8%

< 100 100 to


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Key Findings on 2010 VN TRS


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Vietnam 2010 Overview

With a young population (56% under 30) and low labour cost (2nd lowest

labour cost country after India), Vietnam is an attractive country for FDI

Business conditions in Vietnam have been improving well compared to last

year, consumer confidence re-gains and is ranked number two top confidentcountry according to 2010 Nielsen consumer confidence index

Leaders show high growth expectations towards the Vietnam economy and

their own business

With better growth and more investment, more competition is expected

Top concerns of senior leaders are competitive pressure, ability to pass on

price increase and inflation, shortage of skilled labour, petrol prices and wages

growth

In uncertain times, more information would give more confidence, and being

consistent with peers would give more comfort


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Average Salary Increase TrendUpward trend in light of economic recovery

8.2% 8.5%

6.2%5.3%

6.5%

11.3%

12.6%

14.2%

12.3%

10.4%

11.6%

12.6% 12.4%12.2%

14.3%

2006 2007 2008 2009 2010 (Estimated)

GDP Growth Inc Salary Freeze Exc Salary Freeze


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Average Salary Increase TrendExcept 2008, salary increases have been higher than inflation rates

6.6%

12.6%

6.9%

10.0%

23.1%

11.3%12.6%

14.2%

10.4%

12.3%

11.6%12.6%

14.3%

12.2% 12.4%

2006 2007 2008 2009 2010 (Estimated)

Inflation Inc Salary Freeze Exc Salary Freeze


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Average Salary Increase, 2007 - 2010

0%

2%

4%

6%

8%

10%

12%

14%

16%

2007 13.8% 13.5% 13.5% 12.8% 11.7% 11.1% 12.6%

2008 15.4% 15.3% 13.7% 14.7% 14.1% 14.8% 14.3%

2009 12.5% 12.3% 12.1% 12.6% 12.5% 12.9% 12.2%

2010 (Estimated) 12.2% 12.9% 12.6% 12.6% 12.9% 12.8% 12.4%

Executive Management Prof. - SalesProf. - Non

Sales

Para Prof. Blue Collar Overall

Salary Increase Trend by Staff CategorySlightly higher than 2009 for most levels

Excluding Salary Freeze


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6%

8%

10%

12%

14%

16%

18%

All Industries 11.6% 12.6% 14.3% 12.2% 12.4%

Banking 17.3% 14.6% 15.5% 12.6% 13.9%

Chemicals 11.0% 12.0% 14.2% 13.2% 13.9%

Con. Goods 12.1% 12.0% 14.0% 12.7% 11.7%

Hi-Tech 8.5% 10.1% 10.9% 9.9% 11.4%

Manufacturing 11.3% 12.5% 16.7% 11.8% 13.4%

Pharma 10.1% 12.8% 14.0% 14.0% 13.5%

Oil & Gas 14.0% 13.9% 13.9% 12.4% 11.7%

2006 2007 2008 2009 2010 (Estimated)

Average Salary Increase Trend by IndustryUpward trend for most industries except COG, Pharma and O&M industries



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11.4%

10.5%

12.3%

13.9% 13.9% 13.5% 13.4%

12.3% 12.2%

11.7% 11.7%

12.4%

Chemical FS-

Banking

Phama Manuf Trading FS-Non

Bank

Con.

Goods

Oil &

Mining

Hi-Tech All Ind

Incl Salary Freeze Excl Salary Freeze

2010 Average Salary Increase by IndustryOnly 2 companies reported salary freeze


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Market Movement - Annual Base Salary (COMP1)Moderate movement for Comp1

Median trendline movement, 2009 - 2010

0

300,000

600,000

900,000

1,200,000

1,500,000

1,800,000

2,100,000

2,400,000

2,700,000

3,000,000

41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60

Position Class

VNDin

Tho

usands

Jul-09 Jun-10

Para

Professional

2%

Professional

9%

Management

14%

Executive

18%9%


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0

300,000

600,000

900,000

1,200,000

1,500,000

1,800,000

2,100,000

2,400,000

2,700,000

3,000,000

41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60

Position Class

VNDin

Tho

usands

Jul-09 Jun-10

Para

Professional

2%

Market Movement - Annual Guaranteed Cash (COMP2)Moderate movement for Comp2

9%

Professional

8%

Management

13%

Executive

17%


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Market Movement - Annual Total Cash (COMP3)Moderate movement for Comp3 actual


0

300,000

600,000

900,000

1,200,000

1,500,000

1,800,000

2,100,000

2,400,000

2,700,000

3,000,000

41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60

Position Class

VNDin

Tho

usands

Jul-09 Jun-10

10%

Para

Professional

2%

Professional

9%

Management

16%

Executive

21%


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Market Movement by Industry

IndustryAnnual Guaranteed

CashAnnual Total Cash

Manufacturing 16% 20%

Oil & Mining 12% 15%

Trading 10% 7%

Pharma 9% 7%

Hi-Tech 8% 10%

Consumer Goods 8% 11%

Chemical 7% 5%

FS - Banking 5% 8%


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Pay Difference by IndustryOil & Mining pays premium in the market

Percentage Deviation from All Industries

(Annual Guaranteed Cash)


(Annual Total Cash)

-18%

-8%

1%

1%

6%

7%

9%

12%

87%

-19%

-9%

-1%

0%

-5%

3%

11%

18%

84%

-1 8 % -8 % 1 %1 % 6 %7 %

9 % 1 2 % 8 7 %

Manufacturing Consumer Goods Trading

Chemical Hi-Tech FS - Non Banking

Pharma FS - Banking Oil & Mining


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-28%

-11%

-4%

-7%

-17%

3%

5%

15%

34%

-31%

-15%

-4%

-9%

-28%

-2%

3%

33%

34%

Pay Difference by Industry - Management LevelOil & Mining and Banking pay premium in the market




(Annual Total Cash)

-1 8 % -8 % 1 %1 % 6 %7 %

9 % 1 2 % 8 7 %





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Pay Difference by Industry - Professional LevelOil & Mining pays premium in the market




(Annual Total Cash)

-19%

-8%

0%

-1%

7%

7%

9%

11%

87%

-21%

-10%

-1%

-2%

-4%

3%

10%

11%

84%

-1 8 % -8 % 1 %1 % 6 %7 %

9 % 1 2 % 8 7 %





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Pay Difference by Industry - Para Professional LevelOil & Mining pays premium in the market




(Annual Total Cash)

-8%

-4%

5%

8%

33%

13%

14%

8%

158%

-6%

-2%

1%

9%

24%

9%

20%

-6%

152%

-1 8 % -8 % 1 %1 % 6 %7 %

9 % 1 2 % 8 7 %





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Functional Comparison - Management LevelFunctional pay differences under market pressure


13%

8%

-6% -7% -7%

-12%

-17%

-22%

-29%

-8%-6%

-1%-3%

-18%

-14%

-23%

12%

4%

Eng Corp.

Affairs

Mkt Fin Sales HR Supply Contact

Centre

Prod

Annual Guaranteed Cash Annual Total Cash


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Functional Comparison - Management LevelFunctional pay differences under market pressure


13%

8%

-6% -7% -7%

-12%

-17%

-22%

-29%

-8%-6%

-1%-3%

-18%

-14%

-23%

12%

4%

Eng Corp.

Affairs

Mkt Fin Sales HR Supply Contact

Centre

Prod



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Functional Comparison - Professional LevelFunctional pay differences under market pressure


19%

4%

-1%-3% -4%

-8% -9%

-17%

-19% -21%

-16%-15%

-7%

-13%

-1%

1%

-3%-6%

-1%

17%

Eng Corp.

Affairs

Fin Mkt HR Supply Sales Contact

Centre

Prod Quality



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Functional Comparison - Para Professional LevelFunctional pay differences under market pressure


27%

19%

7%4% 3%

-9%

-3% -3% -4%

-10%

6%

-13%

30%

-8%

-3%-1%

-11%

28%

1%4%

11%

23%

Admin Eng IT Supply Fin HR Mkt Prod Contact

Centre

Sales Quality



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Location Comparison



3%

-9%

3% 3%

-6%

6%

2%

-3%

-0.4%

HCMC Hanoi Others

Management Professional Para Professional


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0 200,000 400,000 600,000 800,000 1,000,000 1,200,000 1,400,000 1,600,000 1,800,000 2,000,000

Para-Prof - Entry

Para-Prof - Experienced

Para-Prof - Senior

Prof - Entry

Prof - Experienced

Prof - Senior

Mgt - Team Leader (Para-Prof)

Mgt - Team Leader (Prof)

Mgt - Manager

Mgt - Sr Manager

Exe - Sub-Function Head

Pay Progression by Career Stream and Level

VND in thousands


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Fixed Allowances Provided by Companies

Oil & Mining

FS - Non Banking

Pharma

100

15%

Clothing AllowTransport Allow Meal Allow Position Allow Car Allow

% of

Companies

providing

50% 32% 25% 13%

Typical

Monthly

Amount

(VND 000)

Exec: 3,000

Mgt Sales: 1,200

Mgt Non Sales: 1,000

Prof Sales: 800

Prof Non Sales: 400

Para Prof: 200

390 Exec: 6,400

Mgt Sales: 3,000

Mgt Non Sales: 2,000

Prof Sales: 500

Prof Non Sales: 1,100

Para Prof: 400

Exec: 17,800

Mgt: 15,000

Prof: 8,000

Commonly

Provided

in industry

Pharma

Trading

COG

COG

Oil & Mining

Chemicals

Pharma

Oil & Mining

Manuf

COG

Chemicals

COG

Hi-Tech

FS - Banking


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20%

23%

16%

29%

14%13%

14%

18%

25%

19%

27%

15% 16%14%

19%

27%

31%

17%

14%

24%

20%

15%

18%

23%

0%

8%

16%

24%

32%

Executive Mgt - Sales Mgt - Non

Sales

Prof. - Sales Prof. - Non

Sales

Para Prof. Blue Collar Overall

%o

fAnnu

alBaseSalar

2009 (Planned) 2009 (Actual) 2010 (Estimated)

Variable Pay by Staff CategoryActual bonus 2009 was slightly higher than planned, lower than 2010


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Variable Pay by Industry2010 is similar to 2009 for most industries

19%18%

19% 20%

0%

4%

8%

12%

16%

20%

24%

28%

32%

%

ofAnnualBase

Salary

Manuf 14.7% 14.6% 15.7% 15.9%

Oil & Gas 20.3% 21.3% 17.0% 17.0%

Chemical 18.5% 17.0% 19.4% 17.9%

Con. Goods 17.4% 16.2% 19.2% 17.8%

Trading 17.7% 16.4% 16.3% 19.3%

Banking 28.1% 24.8% 22.5% 22.6%

Pharma 26.1% 27.4% 25.7% 27.1%

Overall 18.9% 18.2% 19.3% 19.9%

2007 2008 2009 2010 (Estimated)


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Variable Bonus PolicyHigher variable bonus is also planned for 2010

On-Target Performance Outstanding Performance

14%13% 13%

18%16%16%

15%14%

15% 14%14%

18%

0%

5%

10%

15%

20%

25%

30%

Mgt

Sales

Mgt Non

Sales

Prof

Sales

Prof

NonSales

Para

ProfWhite

Collar

Para

ProfBlue

Collar

%of

AnnualBaseSalary

2009 2010

29%

23%24%

21%

25% 25%

21% 22% 20% 20%

21%

27%

Mgt

Sales

Mgt

NonSales

Prof

Sales

Prof

NonSales

Para

ProfWhite

Collar

Para

ProfBlue

Collar


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Sales Incentives PolicyHigher sales incentives is planned for 2010

On-Target Performance

29%

37%

20%

38%38%

33%

0%

10%

20%

30%

40%

50%

60%

70%

Mgt - Sales Prof - Sales Para Prof -

Sales

%o

fAn

nualBaseSalar

2009 2010

Outstanding Performance

44%

55%

31%

58% 59%

51%

Mgt - Sales Prof - Sales Para Prof -

Sales


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Variable Pay Target for 2010 Provided by Companies

Type of Variable Pay

Exec Mgt -

Sales

Mgt -

Non

Sales

Prof -

Sales

Prof -

Non

Sales

Para -

White

Collar

Para -

Blue

Collar

Variable

Bonus

% of Companies

providing96% 66% 97% 53% 95% 87% 87%

Number of

Months Paid2.6 2.2 2.0 2.0 1.6 1.5 1.7

Sales

Incentives

% of Companies

providing3% 59% 72% 21%

Number of

Months Paid3.3 3.6 4.0 3.3


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Other Compensation TrendMoving from Net to Gross pay structure

2010

Gross

96%

Net

4%

2009

Gross

93%

Net

6%

2008

Net

15%

Gross

82%


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Other Compensation TrendMoving from USD to VND pay guarantee

2008

USD

36%

VND

64%

2009

USD

33%

VND

67%

2010

USD

27%

VND73%


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Other Compensation TrendNumber of months paid

2008

6%10%

78%

6%

2009

7% 14%

74%

5%

2010

5% 15%

76%

4%

6 %10 %

78 %

6 %12 months 13 months

14 months Others


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Staff Turnover by Staff CategoryProfessional level still got the highest rate

Average Staff Turnover, 2007 - 2009

0%

3%

6%

9%

12%

15%

18%

21%

2007 7.7% 15.4% 18.1% 17.1% 15.0% 11.5%

2008 5.6% 12.7% 21.0% 16.2% 10.7% 11.7%

2009 4.7% 11.0% 17.2% 12.2% 10.2% 12.3%

Executive Management Prof - SalesProf - Non

SalesPara Prof Blue Collar


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0%

3%

6%

9%

12%

15%

18%

21%

2007 17% 21% 11% 19% 18% 11% 17% 12% 9%

2008 16% 19% 15% 16% 19% 14% 16% 16% 10%

2009 17% 16% 15% 15% 14% 14% 11% 8% 6%

Manuf Pharma Hi-TechFS-Non

BankingCG Trading

FS

BankingChemical

Oil &

Mining

Staff Turnover by IndustryManufacturing had highest voluntary staff turnover in 2009

2009 All

Industries


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13.3%

11.9%

16.4%15.6%

12.3%

0%

5%

10%

15%

20%

2005 2006 2007 2008 2009

Staff Turnover TrendDownward trend after several years in upward trend

impacted by the

economic

downturn in 2009


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Benefit Practices, % Company Providing

8%

21%

35%

38%

66%

81%

91%

11%

21%

35%

41%

69%

87%

92%

Loan

Product Discount

Life Insurance

Car

Travel Insurance

Health Care

AD&D Insurance

2009 2010

Benefit Practice DevelopmentPractices remain very similar to 2009


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2010 Typical Benefits Practice (On Top Of Statutory Requirement)

Item % Co. providing Top Mgt Mgt Prof Staff Dir Lab

AD&D Insurance 92%

Private Health Insurance 87%

Travel Insurance 69%

Car 41%

Life Insurance 35%

Product Discount 21%

Loan 11%


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Private Health CareSimilar to 2009, covering for dependent is more common for management

Employee only

38%

Employee andDependents

62%

Fully paid

by employer100%

Employee only69%

Employee and

Dependents

31%

Fully paid

by employer100%

Employee only

53%

Employee andDependents

47%

Fully paid

by employer99%

Employee only66%

Employee and

Dependents34%

Fully paidby employer

99%Employee only

69%Employee and

Dependents31%

Fully paid

by employer98%

Executive Management

Para ProfessionalProfessional Non SalesProfessional Sales


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Company CarAn attractive benefit to recruit and retain talents

32%

24%

41%43%

28%

33%

Company Owned

Car

Leased Car Car Allowance

2009

2010

2010 Total No. of respondents: 101

2009 Total No. of respondents: 73

K fi di 2010 TRS


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Key findings on 2010 TRSSummary

In light of economic recovery, only 2 companies reported salary freeze

Salary increase rates in 2010 are slightly higher than 2009 for most levels and

most industries

Banking, Chemical, Pharma, and Manufacturing industry reported highersalary increase rate, Hi-tech industry reported the lowest salary increase rate

Oil and Mining, Banking, and Pharma pay premium in the market

Engineering and Corporate Affairs function get higher pay for management

and professional level. For staff level, Engineering and Admin function get

higher pay compared to other functions

Variable pay planned for 2010 performance is higher than 2009 for sales

function and quite similar to 2009 for other functions

Private health insurance is provided by more companies in 2010, other

benefits remain the same as in 2009

Moving from guaranteeing pay in net-USD to gross-VND is the market trend


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Key Drivers for 2011

Remuneration

Economic and Business Environment


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Economic and Business Environment

8.2%8.5%

6.2%5.3%

6.5% 6.4%

2006

2007

2008

2009

2010

(Estim

ated)

2011

(Forec

ast)

GDP (%), 2006 - 2011

6.6%

12.6%

23.1%

6.9%

10.0%

8.0%

2006

2007

2008

2009

2010

(Estim

ated)

2011

(Forec

ast)

Inflation (%), 2006 - 2011

Source: General Statistics Office of Vietnam, IMA Asia May 2010

Labor Demand in 2010


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Labor Demand in 2010Headcount growth is planned to be higher in 2010

1.2%2.2%

2.5%

15.6%

16.4%

13.3%

21.5%

11.3%

14.0%

Staff Retrenchment Staff Turnover Headcount Growth

2007 2008 2009 2010

What is the hiring intention?


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What is the hiring intention?More companies plan to add headcount in the next 12 months

Next 3 months

Reduce

headcount

1%

No headcount

change33%

Recruit to add

headcount

66%

Next 12 months

No headcount

change

25%Recruit to add

headcount74%

Reduceheadcount

1%

Hot Jobs in 2010


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Hot Jobs in 2010

Job Family Level Actual Title

Marketing Management Marketing Manager

Sales Management Sales Manager

Sales Professional Sales Executive, Account Manager

Top 3 - difficulty in recruiting

Job Family Level Actual Title

Marketing Management Marketing Manager

Sales Management Sales Manager

Sales Professional Sales Executive, Account Manager

Top 3 - difficulty in retaining

Salary Increase Forecast for 2011


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1% or More

No change

1% or Less

0-1% Lower

0-1% Higher

Salary Increase Forecast for 2011

0%

5%

10%15%

20%

25%

30%

35%

40%

45%

50%

> 1% lower 0% - 1% lower No change 0% - 1% higher > 1% higher

Exe Mgt Prof-Sales Prof-Non Para Blue Collar

2011 Forecast Salary Increase by Staff Category


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Average Salary Increase, 2008 - 2011

0%

2%

4%

6%

8%

10%

12%14%

16%

2008 15.4% 15.3% 13.7% 14.7% 14.1% 14.8% 14.3%2009 12.5% 12.3% 12.1% 12.6% 12.5% 12.9% 12.2%

2010 (Estimated) 12.2% 12.9% 12.6% 12.6% 12.9% 12.8% 12.4%

2011 (Forecast) 11.9% 12.1% 12.4% 12.2% 12.5% 12.2% 12.2%

Executive Management Prof. - SalesProf. - Non

SalesPara Prof. Blue Collar Overall


2011 Forecast Salary Increase by Staff CategorySalary increase forecasted for 2011 is slightly lower than 2010

2011 Forecast Salary Increase by Industry


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6%

8%

10%

12%

14%

16%

18%

All Industries 12.6% 14.3% 12.2% 12.4% 12.2%

Banking 14.6% 15.5% 12.6% 13.9% 12.3%

Chemicals 12.0% 14.2% 13.2% 13.9% 12.1%

Con. Goods 12.0% 14.0% 12.7% 11.7% 12.3%

Hi-Tech 10.1% 10.9% 9.9% 11.4% 11.5%

Manufacturing 12.5% 16.7% 11.8% 13.4% 12.9%

Pharma 12.8% 14.0% 14.0% 13.5% 13.0%

Oil & Mining 13.9% 13.9% 12.4% 11.7% 12.5%

2007 2008 2009 2010 (Estimated) 2011 (Forecast)


2011 Forecast Salary Increase by IndustryConservative forecast for most industries except COG and Oil & Mining

Factors That Affect Salary Increments


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96%

83%

73% 70%

58%52%

26%

Individual

Performance

Company

Performance

Position in

Salary Range

Inflation Job Level Market

Competitiveness

Length of

Service

Factors That Affect Salary IncrementsMarket Competitiveness is now one of the factors

2011 Variable Pay Forecast by Staff Category


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Average Variable Pay, 2009 - 2011

14%

16%

15%

27%

19%

24%

25%

19%

14%

17%

15%

31%

18%

27%

23%

20%

15%

19%

16%

27%

18%

23%

24%

19%

Blue Collar

Para Prof.

Prof. - Non Sales

Prof. - Sales

Mgt - Non Sales

Mgt - Sales

Executive

Overall

2011 (Forecast)

2010 (Estimated)

2009

y y g ySimilar to 2009 and 2010

2011 Variable Pay Forecast by Industry


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y y y

19% 18%19% 20% 19%

0%

4%

8%

12%

16%

20%

24%

28%

32%

%o

fAnnualBaseSalar

Manuf 14.7% 14.6% 15.7% 15.9% 20.1%

Oil & Gas 20.3% 21.3% 17.0% 17.0% 17.2%

Chemical 18.5% 17.0% 19.4% 17.9% 18.8%

Con. Goods 17.4% 16.2% 19.2% 17.8% 18.2%

Trading 17.7% 16.4% 16.3% 19.3% 24.5%

Banking 28.1% 24.8% 22.5% 22.6% 26.0%

Pharma 26.1% 27.4% 25.7% 27.1% 25.6%

Overall 18.9% 18.2% 19.3% 19.9% 19.3%

2007 2008 2009 2010 (Estimated) 2011 (Forecast)

Cash Compensation Mix


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82% 5% 13%

83% 5% 12%

67% 12% 21%

85% 4% 11%

73% 8% 19%

80% 4% 16%

80% 4% 16%

75% 4% 21%

Para-Professional -

Blue Collar

Para-Professional -

White Collar

Para-Professional -

Sales

Professional - Non-Sales

Professional - Sales

Management - Non-

Sales

Management -

Sales

Executives

Actual Comp Mix

Base Salary Guaranteed Cash Variable Cash

83% 5% 11%

83% 5% 12%

61% 11% 28%

84% 4% 12%

67% 7% 26%

80% 4% 16%

76% 4% 20%

76% 4% 21%

Target Comp Mix

Sales forces have higher target variable pay portion than actual

Key Drivers for 2011 Remuneration


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Summary

In light of economic recovery, up to companies plan to add

headcount to support their business activities in the next 12 months

However, most companies are still very cautious and forecast a

conservative salary increase rate for 2011 due to the economicuncertainty lying ahead

Individual and companys performance are still the two main factors

that affect salary increment decision. Market competitiveness is also a

factor considered by companies

2011 overall variable pay is also conservatively forecasted to be

slightly lower than 2010

Marketing and sales managerial positions are still considered to bedifficult to recruit and retain by the majority of participating companies

How HR Should Prepare for the Future


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Suggested actions

Prepare the workforce for better growth in 2010

Prepare for more competition in skilled labours

Have better preparation to develop, recruit and retain hot jobs,

especially the hot jobs in marketing and sales function

Since compensation is the main factor to attract employee, benchmarkwith your peers to define how competitive your compensation is

Know how much variable pay provided by your peers and improveyour performance management system

Aware of the potential high inflation rate by end of 2010

Keep up with changes on labour law and regulations to manage non

compliance risks

Plan your budget for the increased social insurance contribution up to2014


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Thank You.

Contact Information


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For further information, please contact our consultants at tel: (84 8) 6 291 4188

600Ms Nguyen HoaVN TRS Leader

610Ms Tran Thi Quynh AnhTrading

603Ms Ton Nu Diem NguyenPharmaceuticals

607Ms Duong Thi Thu HuongOil & Mining

601Ms Nguyen Thi Hong VanManufacturing

606Ms Do Thi Thu PhuongHi-Tech

605Ms Hua Ngoc Thuy TramFinancial Services

Industry Contact Person Ext.

Consumer Goods Ms Ngo Ngoc Thuc Doan 604

Chemicals Ms Vo Thi Thuy Diem 611


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Legislative Updates 2010 - 2011

Presented by Nguyen Thi Thanh Huong

Senior Manager, Payroll & HR Outsourcing Services

Contents


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1. Personal Income Tax Highlights in 2010

2. Changes in Minimum Wage 2010

3. Social Contribution Highlights 2010-2014

4. Claim Procedure for Un-employment Insurance

5. Draft of New Labor Law Effective from 2011

Personal Income Tax Highlights in 2010


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Income Tax Exemption (Circular 160/2009/TT-BTC)

Business Per Diem: increased from VND 70,000/ day to VND

150,000/ day (97/2010/TT-BTC Circular) applicable from 20th August

2010

100%Dividend paid in 2009 before 30/06/2010

50%Bonuses paid in 2009 before 03/31/2010

Tax exemptionIncome

Contents


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1. Personal Income Tax Highlights in 2010

2. Changes in Minimum Wage 2010

3. Social Contribution Highlights 2010-2014

4. Claim Procedure for Un-employment Insurance

5. Draft of New Labor Law Effective from 2011



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Income Tax Exemption (Circular 160/2009/TT-BTC)

Business Per Diem: increased from VND 70,000/ day to VND

150,000/ day (97/2010/TT-BTC Circular) applicable from 20th August

2010

100%Dividend paid in 2009 before 30/06/2010

50%Bonuses paid in 2009 before 03/31/2010

Tax exemptionIncome



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Guideline of conversion from net to gross salary (Document # 3565/TCT-TNCN)

For net salary: converted net to gross salary (document # 1578/TCT-TNCN)

For net salary and net benefits (utilities, medical insurance paid by employers):converted net of salary only, then plus with net benefits to calculate taxableincome.

For both net and gross salary from two sources: converted net into gross salary,then plus with gross salary for personal income tax calculation.

No

Yes

VAT deducted from the housing rental for foreign expertsworking in Vietnam (Document # 2696/TCT-CS)

Have signed a labor contract with Vietnam enterprises

Have signed a labour contract and received salary and benefits from

foreign enterprises

2. LABOUR/WAGES: MINIMUM WAGES IN 2010Minimum Wages in 2010


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Area minimum salary applicable to foreign

entities

Area minimum salary applicable to

Vietnamese entities

Decree 97/2009/N-CP

Unit: VND in

thousands

Entity

in

area I

Entity

in

area II

Entity

in

area III

Entity

in

area IV

Decree 97/2009

(from 01/01/2010) A 980 880 810 730

Decree110/2008

(from 01/01/2009) B 800 740 690 650

Increase C=A-B 180 140 120 80

% of increase D=C/B 22.50% 18.92% 17.39% 12.31%

Decree 98/2009/N-CP

Unit: VND in

thousands

Entity

in

area I

Entity

in

area II

Entity

in

area III

Entity

in

area IV

N98/2009

(from 01/01/2010) A 1,340 1,190 1,040 1,000

N111/2008

(from 01/01/2009) B 1,200 1,080 950 920

Increase C=A-B 140 110 90 80

% of increase D=C/B 11.67% 10.19% 9.47% 8.70%

Source: TalentNet summary and analysis

Changes in Insurance Contribution Rates

Ch l t t ib t i f 01 M 2010


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Unit: VND

14,600,000/month730,000/month1st May 2010

13,000,000/month650,000/month1st May 2009

Capped salary for insurance

contributionCommon Minimum SalaryEffective Date

25%

7%

18%

Total

2%

1%

1%

UI

3%

1%

2%

HI

20%

5%

15%

SI

2009

8.5%1%1.5%6%EE

28.5%2%4.5%22%Total

20%1%3%16%ER

TotalUIHISI

2010Kinds of

comp Ins.

Change on cap salary to contribute insurance from 01-May-2010

(Decree 28/2010/N-CP)

Change on insurance contribution rate from 01-Jan-2010(Decree 62/2009/N-CP)

Changes in Insurance Contribution Rates


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Contribution 2011-2014


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Social Insurance: route of contribution (Social insurance law 71/2006/QH11)

Health insurance: maximum rate will be increased to 6%, in which

employee portion is 2% and employer portion is 4%. No detail plan yet.

(Heath insurance law 25/2008/QH12)

26%24%22%Total

8%7%6%Employee

18%17%16%Employer

20142012 - 20132010 - 2011

Social Insurance Contribution RateRoute

Administrative Fines Related to Social Insurance Contribution


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Acts of violation Penalties

Fines for employers: Decree 86/21010/N-CP effective from 1st Oct 2010

Delinquent contribution of SI and UI 0.05%/ day

Max VND 30 million

Inadequate number of people eligible to participate in socialinsurance 0.3 - 2.5 million/ EE

SI and UI contribution not properly calculated as regulated 0.3 - 0.7 Million/ EE

No participation in social insurance, un-employment insurance

after 30 days of signing the labor contract

0.3 - 0.7 Million/ EE

No payment of insurance claims to employees (sickness,

maternity)

1.5 - 2 Million/ EE

Late payment to employee the reimbursement of sickness,

maternity..claims after 3 days from receiving full regulated

documents

Warning


Not return SI book on time when employees stop working Warning

0.5 - 1 Million/ EE

Lose, damage, make correction to the SI books Warning


Unemployment Insurance: Claim Procedure


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Conditions for unemployment claim UI contribution from 12 months and above

Legal termination of labor contract or lost job

Un-employed

Documents need to be submit Application form

Termination letter

Social insurance book

ID card or resident book (notarized copy)

Process to receive the unemployment insurance

Emplo

yer

Employ

ee

Un-employed/ Inform toTTGTVL

Within 7 days Within 15 days Submitdocuments

Received UI

Close & return social

Insurance book

Within 7 daysIssue

terminationletter

Deliver the

terminationletter to EE

Within 15 days

Draft of New Labour Law Effective from 1st January 2011


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Labor contracts subleased between thetwo enterprises and agreed by the

employees

Labor sublease

contracts

At least 85% of the basic salaryAt least 70% of the basic salarySalary during

probation period

Total working time up to 31/12/2008 plus

the time that employee did not contribute

to unemployment insurance after that

Total working time up to 31/12/2008Calculation time for

severance allowance

Within 15 days before the labor contract

expired, employee must be notified

Notification before the expired date of

the labor contract is not required

Termination of labor

contract

Definite labor contract is signed only

three times

Definite labor contract is signed only

two timesLabor contract

Draft new labor lawCurrent labor lawRegulation

Draft of New Labour Law Effective from 01/01/2011


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Full paid

holidays

EE: compensate 1 months salary for

indefinite LB & definite LB; month salary

for labor contract under 12 months

EE: can not receive severance

allowance and have to compensate

month salary

Pay 400% of salary (including the work

day on holiday)

Pay 300% of salary (including the

work day on holiday)

Overtime salary

payment

Not exceed 300 hrs/ yearNot exceed 200 hrs/ yearOvertime

ER: Compensate 2 months salary for

indefinite LB & definite LB; 1 month salary

for labor contract under 12 months

Add at least 2 months salary

compensation if the labor contract

terminate

ER: compensation of at least two

months salary and allowances (if any)Unlawful

termination of

labor contract

Holidays: 9 days/ year

Foreigners: add 2 days for their countrysnational holidays

Holidays: 9 days/ year

Draft new labor lawCurrent labor lawRegulation