What is Manufacturing Workforce Models in Vietnam

Key takeaways

• Vietnamese manufacturers must shift from traditional labor-heavy models to skill-focused, technology-integrated workforce models to stay competitive globally.
• With only 28% of workers formally trained, Vietnam faces 2.1 million unfilled manufacturing workforce jobs by 2030 without immediate action.
• Companies that invest in continuous upskilling, smart automation, and data-driven workforce planning achieve better profits and market leadership.
• The most successful manufacturers treat workforce transformation as a strategic priority, not just an HR initiative.

Vietnamese manufacturing is changing fast, driven by new technologies and shifting worker expectations. For CEOs, updating workforce models isn’t just about operations—it directly determines whether companies thrive or struggle in the coming decade. This analysis shows you what manufacturing workforce trends work today, why change is urgent, and how to build teams that deliver real business results.

Defining workforce models in Vietnamese manufacturing

Your workforce model is how you structure, hire, develop, and manage people to hit your business goals. In Vietnamese manufacturing, this covers six key areas that directly impact your bottom line:

• Talent sourcing and composition – How you recruit workers (local vs. migrant, temporary vs. permanent) and balance factory floor staff with technical specialists
• Skills management – Knowing current abilities and planning for future needs
• Compensation and performance systems – Pay structures, benefits, and success metrics
• Technology integration – How machines and digital tools work with people
• Training and career development – Investments in upgrading worker skills
• Organizational culture – Workplace environment and employee engagement practices

According to the General Statistics Office, manufacturing jobs have grown 5.4% yearly since 2011, creating fierce competition for skilled workers. The skills challenge is severe—only 28% of Vietnam’s workforce has formal training or certificates. As Nguyen Thi Thanh Mai from the Department of Labor Statistics notes, “71.4 percent of Vietnamese workers are untrained and lack professional certifications, posing a barrier to a sustainable and interconnected labor market.”

These workforce development models range from old-school, labor-heavy approaches to modern, skill-focused systems that use technology smartly. Where your company sits on this spectrum largely determines your future success.

Characteristics of prevailing workforce models in Vietnam

The manufacturing landscape reveals three distinct workforce approaches, each with clear competitive implications for business performance and talent retention.

Companies stuck in traditional labor models face growing competitive disadvantages, while those embracing modern approaches gain significant market advantages through better productivity and talent retention.

The traditional labor-intensive model

This older approach still dominates where automation is limited and keeping costs low drives decisions. These companies rely heavily on manual work by employees with basic skills, often learned on the job rather than through formal training.

The biggest problem is people leaving constantly. EuroCham Vietnam’s Vice Chairman Thang Nguyen found that “it is not uncommon to see 15-20% of employees leave within their first year in southern factories.” This constant turnover hurts production and product quality.

Pay focuses mainly on basic wages with few chances to advance. Training happens informally as people learn their specific tasks. Companies using this model struggle to keep workers and find it hard to attract younger employees who want more engaging, technology-enhanced jobs.

The transitional model

Many Vietnamese manufacturers operate in this middle ground, recognizing they need to change while slowly making improvements. These companies are starting to automate specific tasks—textile companies now automate about 10% of work and plan to reach 25-28% automation soon.

According to surveys, 45-46% of these firms can’t find enough skilled workers, making them more aware of training gaps. However, they usually react to problems rather than preparing for future needs.

They’re working on keeping employees longer, though manufacturing turnover still runs 20-30% yearly according to Vietnam News. These companies deal with mixed workforces—Gen Z and Millennials make up 54% of workers but have different expectations about work-life balance and career growth than older employees. Understanding these key challenges in managing a multigenerational workforce becomes critical for operational success.

Industry 4.0-adapted model

Smart local companies and many foreign-owned firms use this advanced approach, setting themselves up for long-term success. They strategically use automation, robots, and data throughout their operations. VinFast’s smart factory uses about 1,200 welding robots, while Samsung Vietnam makes major technology investments.

These companies focus hard on developing skilled technicians, engineers, and digital specialists. Samsung Vietnam has trained roughly 6,500 students and teachers through its Innovation Campus program. VinFast built a Training Centre specifically to produce workers who can run Industry 4.0 facilities.

They invest continuously in upgrading worker skills through dedicated training centers or partnerships with schools. These companies create clear career paths—Schneider Electric Vietnam lets technical experts advance without leaving engineering roles. They use data to plan workforce needs, manage talent, and boost efficiency while building strong employer brands that attract top talent.

Key factors compelling workforce model evolution

Four major disruptions are forcing Vietnamese manufacturers to rethink their workforce characteristics, with each creating both immediate challenges and long-term opportunities for competitive advantage.

Industry 4.0 disruption fundamentally changes what jobs require. The World Economic Forum projects that 50% of manufacturing roles will need new technical skills by 2025. 

The skills shortage represents a major competitive problem. McKinsey & Company identifies “structural challenges” in Vietnam’s manufacturing, particularly around worker quality and technology adoption. Without systematic action, Vietnam could face 2.1 million unfilled manufacturing jobs by 2030 due to growing skills gaps.

High employee turnover disrupts production and hurts quality. Manufacturing turnover may reach 30% recently according to Vietnam News, well above healthy rates of about 10%. This instability increases hiring costs and reduces operational efficiency.

Changing worker expectations add more complexity. Tieu Yen Trinh, CEO of Talentnet, emphasizes that “an effective transformation strategy must stem from the company’s purpose and needs… the key is to maintain consistency in purpose but remain flexible in approach.” With 70% of Gen Z workers avoiding traditional manufacturing jobs, companies must adapt workplace cultures and career opportunities to attract young talent.

Leading companies pioneering workforce innovation

Real-world examples from Vietnamese manufacturers demonstrate that workforce transformation delivers measurable business results across different industry segments and company sizes.

Samsung Vietnam focuses on high-tech skill building through partnerships with schools, creating talent pipelines for advanced manufacturing. The company’s work with the National Innovation Center shows how large manufacturers can team up with educational institutions to develop industry-relevant skills at scale.

VinFast demonstrates the modern approach by building a highly automated facility alongside comprehensive workforce development infrastructure. The company’s Training Centre produces skilled technicians capable of operating Industry 4.0 technologies, ensuring people can match technological sophistication.

Even traditional industries are adapting. Garment manufacturer Viet Thang Jean retrained sewing supervisors to operate robotic sewing units, transforming manual work into combined human-machine operations. These examples show that workforce innovation works across all manufacturing segments, not just high-tech industries.

A strategic blueprint for building future-ready workforce models

Success requires coordinated action across six critical areas, with each element reinforcing your overall competitive strategy and business objectives. Companies seeking comprehensive support can benefit from expert HR consulting services to accelerate their workforce transformation initiatives.

Invest proactively in continuous training, upskilling & reskilling

Building skilled modern factory workers from within solves talent shortages while keeping good employees longer. Leading companies create comprehensive training programs through internal academies or school partnerships that align education with industry needs.

Samsung’s work with technical universities and VinFast’s dedicated training facilities show best practices. For current workers, structured retraining programs should accompany new technology—when you introduce ERP systems or robotic production lines, retrain affected staff for new technician roles. Focus training on the most in-demand skills in manufacturing workers to maximize return on investment.

Government and international organizations support these efforts through co-funded programs, like ILO initiatives training garment workers in digital pattern-making. View training as ongoing investment rather than one-time cost to future-proof workforce capabilities while improving retention rates.

Develop and implement clear career pathways

Formal career advancement significantly improves retention. Research shows 75% of employees stay longer at companies offering internal promotion opportunities. However, only 29% of Vietnam’s local manufacturers have formal career paths, compared to 45% of foreign-owned companies.

Companies can learn from identifying critical roles and succession planning strategies to build robust talent pipelines. Successful approaches include:

1. Mentorship programs pairing experienced workers with high-potential staff
2. Leadership training for promising employees at all levels
3. Internal job posting systems enabling advancement without external searches
4. Multi-skill certification programs allowing production workers to earn higher pay

Map out roles and required skills for both factory floor and office tracks, giving employees clear visibility into advancement possibilities and needed skill development.

Enhance employee engagement and cultivate a positive workplace culture

Beyond competitive pay, successful manufacturers focus on recognition, communication, and supportive work environments. Simple recognition programs—employee-of-the-month awards, production bonuses for hitting targets—significantly improve morale and engagement.

Understanding Vietnam’s manufacturing employee perspectives helps companies address specific concerns and expectations. Regular feedback through employee surveys and company meetings helps management spot issues early while showing that worker opinions matter.

For millennial and Gen Z employees, cultures that value work-life balance, mental well-being, and purpose become increasingly important. Leading companies add wellness programs and social responsibility activities that make young staff proud of their company’s impact. Organizations can accelerate this transformation through culture change initiatives that shift from compliance-focused to engagement-driven approaches.

Strategically implement automation with a human-centric focus

Rather than suddenly replacing workers, best companies gradually automate processes while retraining employees for higher-skilled positions. This approach involves technicians from day one, sending them for vendor training to become robot operators or maintenance specialists.

McKinsey experts suggest manufacturers “selectively invest in upgrades for flexible automation” where economically justified, while simultaneously upgrading workforce skills for new systems. Starting with process optimization and data analytics before heavy automation can yield quick productivity gains through better labor allocation and reduced overtime.

Clear communication about automation benefits—explaining that robots handle difficult tasks while creating safer, more engaging roles for employees—helps manage workforce concerns and smooth transitions.

Leverage data analytics and HR technology for informed decisions

Modern workforce models use data and analytics for better human resource decisions. Companies increasingly use HR technology systems to track turnover rates, skills inventories, and employee performance in real-time, enabling quick action when problems emerge.

Effective workforce management forecasting helps companies anticipate skill needs and staffing requirements. Key metrics to track:

• Employee turnover rates by department and skill level
• Training hours per employee and skill certification progress
• Internal promotion rates and career pathway utilization
• Productivity metrics linked to workforce composition

Digital workforce management platforms optimize shift scheduling based on employee skills and availability, ensuring appropriate technical expertise each shift. Predictive analytics help identify employees at risk of leaving, enabling targeted retention efforts through new opportunities or focused incentives.

Strengthen your employer brand to attract and retain top talent

Strong employer brands showcasing growth opportunities, job stability, innovation, and social responsibility attract skilled candidates to manufacturing careers. Define clear Employee Value Propositions that explain why talented professionals should join or stay with your company versus competitors.

Successful strategies include highlighting employee success stories, promoting technology adoption to appeal to tech-savvy workers, and demonstrating sustainability and community commitments. Companies use social media and professional networks to share facility tours and employee testimonials that build credibility.

Recognition programs and “Best Employer” awards boost industry standing—manufacturers like Bosch Vietnam and Nestlé Vietnam have appeared in top workplace rankings after investing in human resource practices.

Align transformation with purpose and foster collaboration

Workforce transformation must align with core business goals while encouraging collaboration across organizations and with external partners. The 3C framework, Communicate – Collaborate – Commit, suggests leaders should communicate transformation visions clearly, collaborate internally and externally, and stay committed to workforce development despite short-term challenges.

Companies can benefit from designing flexible workforce ecosystems that adapt to changing business needs through diverse talent models and continuous learning approaches.

Industry-wide and public-private initiatives address system-wide issues no single company can solve alone. Forward-thinking manufacturers participate in industry associations and government discussions to improve manufacturing labor conditions through collective solutions.

For CEOs in Vietnam’s manufacturing sector, workforce model transformation is a strategic necessity, not an option. Future success belongs to organizations that treat people as critical assets through smart investments in skills, engagement, and adaptability.

Start by assessing your current manufacturing workforce model against changing industry demands and your specific business goals, then identify key investment areas in targeted training, employee-empowering technology, and better talent management processes. Explore managing workforce ecosystems strategies to navigate these complex transformations successfully.