The hook for blue-collar workers

As the economic reopening collides with a tightened labor market, businesses are squirming to attract and retain blue-collar workers.   

Shortage of blue-collar labor still haunts businesses  

Despite the talks of automation displacing everyone, in Vietnam, blue-collar occupations are and will still be in high demand, especially amidst the economic rebound, the supply chain diversification and most recently, the flood of workers not returning to work.  

According to the General Statistics Office, until 15 December 2021, approximately 2.2 million people returned home from key economic regions when coronavirus caseloads were spiking [1]. As COVID-19 curbs were lifted, 58% of the labor force intended to return to Ho Chi Minh City for work, while 42% decided to stay put [2]. This led to a severe lack of workers.  

During the 1st quarter of 2022, some regions witnessed a labor shortage of around 120,000 workers, indicating a 2-3% increase compared to previous years. The top categories seeing the highest demands are manufacturing, processing, etc. [3]  

A recent survey also revealed that the 2022 labor needs are estimated at 700,000. The shortage could peak during the second quarter of the year in the advent of business’ gradual recovery from COVID-19.   

Workers are grappling  

“The main reason lies in the lack of a well-rounded compensation package and other benefits to ensure workers’ wellbeing,” said Mr. Dung Dao – The Minister of Labour, Invalids, and Social Affairs. Indeed, many businesses demand skilled workers but still lack desirable employee benefits [5].  

The higher cost of living post-pandemic also represents a major concern. The CPI (Consumer Price Index) of the 1st quarter in 2022 has increased by 1.92% compared to 2021 [6], while the regional minimum wage stands still for the past two years.  

“Workers, even ones with seniority, had to return to their hometown partly due to insufficient savings,” said Ms. Lan Pham – Vice-head of the Institute for Workers and Trade Union.   

The hook: better welfare  

In the hope of untwisting the blue-collar labor market, the Vietnamese government has issued several policies, one of which was subsidizing rental fees for workers working at industrial parks and major economic regions (Decision No. 08/2022/QD-TTG dated 28 March 2022). The government also proposed a 6% increase in the regional minimum wage by July 2022.  

On their part, businesses are handing out pay raises and bonuses to attract and retain workers. The 2022 survey by the Worker Newspaper reported $VND 250,000 – 350,000 monthly pay rise.  

Not only paychecks, employers are also offering additional benefits to better care for their blue-collar workers. Many businesses are investing in their workers’ future by funding training courses in foreign languages and computer skills [9]. 

Another increasingly attractive benefit is on-demand pay or earned wage access – that is, allowing workers to instantly access their earned yet unpaid wages. The solution has been widely embraced by multinational corporations like Walmart, McDonald’s, etc., and helped them ease their workers’ financial burden and reduce turnover rate [10]. The appetite for “pay on the day” is also growing in Vietnam, with the adoption of major corporations such as Austdoor.  

A falling number of COVID-19 infections, a pickup in economic activity and the supply chain shift to Vietnam have led to higher demand for blue-collar manpower and created an enormous headache for businesses. To navigate such talent shortage, businesses simply need to rethink their employee benefits and perks.

 

References:

[1] More than 2.2 million workers to return to their hometown, 2021 – VnExpress Newspaper 

[2] Blue-collar labor market report during and after the COVID-19 lockdown, 2021, Vieclamtot.com website 

[3] Solutions to overcome labor shortage, 2022 – Vietnamplus Newspaper  

[4] The key points to attract and retain employees after Tet, 2022 – Voice of Vietnam Newspaper  

[5] The increasing labor recruitment demand in 2022, 2022 – Worker Newspaper   

[6] Socio-economic Statistics in the first quarter of 2022, 2022 – General Statistics Office  

[7] Which keys to attract and retain workers?, 2022 – Vietnam Economic News 

[8] For a collective voice, 2022 – Worker Magazine  

[9] CHALLENGES IN RECRUIT SKILLED LABOR: Vocational training associated with business needs, 2022 – Worker Newspaper 

[10] Even, 2022 

Gifts of encouragement for workers from GIMO and Vietnam General Confederation of Labor

On May 13th, 2022, Mr. Ngo Duy Hieu – Vice President of Vietnam General Confederation of Labor, President of Vietnam Public Sector Union, and representatives from GIMO visited and handed out gifts to 50 workers in Chuong My and Thanh Oai District, Hanoi.  

Mr. Ngo stressed that Labor Month is the time of the year when all of us show our appreciation towards the labor community and lend a helping hand to those in need.  

He also thanked GIMO for its companionship and added that on-demand pay is instrumental in preventing high-interest payday loans that are preying upon vulnerable workers.  

During the events, GIMO joined the Vietnam General Confederation of Labor in handing out 50 gifts of encouragement to less fortunate employees in Chuong My and Thanh Oai Districts.  

During this year’s Labor Month, GIMO has actively engaged in a plethora of social activities hosted by the Vietnam General Confederation of Labor and other provincial confederations

Gen Z Workforce: How to Jump on The Band Wagon?

A 14-year-old entrepreneur providing vocational training for people in poverty; an 18-year-old teen named among the Times “Top 100 most influential people in 2013” are just a few headlines featuring Gen Zers in the past few years [1]. 

Every other generation has had its chance, and now it is Gen Z’s time to shine and make its mark in the business world. Businesses should seize this opportunity and take in fresh Gen Z talents to further their growth.  

 

Gen Z, Who?   

Born between 1997 and 2009, Gen Z are hailed the digital natives who are taking the world by storm. They barely know about the lined telephone, boxed TV, cassette tapes, or life without Google [2].   

The ability to learn fast and adapt well is also a well-known trait for this generation as they grew up with the Internet, the eternal source of free and easily accessed information.  

 

Gen Z at Work  

When it comes to work, Gen Z has a few specific requirements.  

Flexibility. Having grown up amidst rapid changes in technology and business models, Gen Z has long been recognized for their flexibility and ability to pivot in the workplace. So they expect businesses to provide them with the same [3].   

Wellbeing. According to a 2020 Gallup Poll, Gen Z prefers employers who care about their mental and physical wellbeing [4]. No one wants to be the work hustle, constantly burning themselves out at the office, but only Gen Z was brave enough to voice their opinion and demands to be satisfied.   

Balance. Survey says, 42% of Gen Z prioritize work-life balance over other job perks [5]. Having gone through the Great Recession from 2007 to 2009 and disruptive phases like COVID-19, Gen Z has seen many unhappy workers. So, they set their goal not to overwork themselves since other aspects of life are just as important.   

 

Gen Z Demands. Businesses Answer  

Taking up almost 30% of the world’s population, Gen Zers will eventually dominate over any other age cohort [6]. The most senior Gen Zers are reaching age 22, either soon or have already entered the labor force. That means it’s in employers’ best interest to take notes of how to woo this new demographic of employees – fast [7].   

Open up. The pandemic has made people realize flexibility is what they want and need. Remote work and flexible working hours are just the starts. Flexible pay or on-demand pay is also on the rise as the newest benefit for employees to have more control over their own earned wages. By giving employees proactive access to their earned wages, financial emergencies can be solved instantly. Personal financial management can also be done with ease.   

Promote employees’ well-being. Creating more personalized or health-oriented benefits can win employees of all ages. The pandemic-sized hit has made everyone realize the importance of health and wellbeing. Businesses should provide them with the assurance of being well taken care of no matter the circumstances. As discovered by HBR, 98% of surveyed leaders plan to newly offer or expand their employee benefits, prioritizing what one’s workers deem essential, like child and senior care benefits or expanded mental health support [8].    

Create a balanced work life. Employers should support a more well-balanced lifestyle with respect for personal time and space or leisure-supported benefits. It may not be the intense, fast-track instant growth businesses want. However, this can prevent burnout and work resentment, issues seen in many environments people deem toxic. In the long run, such a balance can support more sustainable growth for businesses.  

 

Gen Z is redefining the workplace norm for everyone. As bold and brave as they are, businesses should get ready to adapt themselves to today’s workforce.  

 

Source 

[1] https://www.theatlantic.com/sponsored/allstate/getting-gen-z-primed-to-save-the-world/747/    

[2] https://www.pewresearch.org/fact-tank/2019/01/17/where-millennials-end-and-generation-z-begins/  

[3] https://deloitte.wsj.com/articles/millennials-gen-zs-prioritize-flexibility-01628013560  

[4] https://www.businessinsider.com/millennials-versus-gen-z-workplace-trends-flexibility-work-life-balance-2021-11  

[5] https://finance.yahoo.com/news/42-gen-z-prioritize-life-161927571.html  

[6] https://www.weforum.org/agenda/2021/03/gen-z-unemployment-chart-global-comparisons/  

[7] https://www.forbes.com/sites/forbesbusinessdevelopmentcouncil/2019/11/20/what-your-business-should-know-about-generation-z/?sh=190be834410a  

[8] https://hbr.org/2021/04/the-pandemic-is-changing-employee-benefits 

What is Financial Inclusion and Its Benefits?

Constantly receiving attention from researchers and policy-makers for the past two decades, financial inclusion is an essential means to benefit the economy and society.

Since 2013, the World Bank Group has set Universal Financial Access by 2020 initiative, which focuses on 25 priority countries where almost 70% of all financially excluded people live. The program envisions that adults worldwide will have access [M2] to a transaction account or electronic instrument to manage their financial lives better. 

In Vietnam, since the end of 2020, the Prime Minister has approved a financial inclusion strategy, targeting at least 80% of Vietnamese adults to have at least one bank account by 2025. 

What is Financial Inclusion? 

According to World Bank Group, “Financial Inclusion means that individuals and businesses have access to useful and affordable financial products and services that meet their needs – transactions, payments, savings, credit and insurance – delivered responsibly and sustainably.” 

How to Achieve Financial Inclusion? 

Among all mentioned parties, Fintech companies play an increasingly important role in promoting financial inclusion. With the advantage of technology, Fintech companies continuously innovate and integrate with financial institutions and utility partners to bring on-demand financial services closer to individuals and enterprises. 

Benefits of Financial Inclusion 

Financial inclusion positively impacts the economy and society, especially targeting poor people with below-average financial capacity and limited access to health, education, saving, credits. 

Studies show that when people access the financial system, they are enabled to start and expand businesses, invest in education, manage risk, and respond to financial broken. Financial inclusion is not an end goal itself but an initiative to promote economic development and social well-being.   

1. Easing the poverty 

Opportunities to access financial services, such as savings, credit, insurance and many monetary funds, formal financial institutions, bring vulnerable people to many options suitable with their spending levels. With reasonable fees provided, people enable to resolve personal financial matters; minimize the risk of falling into the black credit trap, which could put their life under threat.  

2. Closing the gender gap 

Financial inclusion equally provides access to financial services and financial opportunities for both men and women, enabling them to improve their financial capacity, status, and income. Accordingly, financial inclusion contributes to shortening the gender gap and equality in the community.   

3. Enabling people to have the capability and tools to manage and save their money 

With the adequate support of technology, the access and use of many safe and secured financial services open up opportunities for individuals and small and medium enterprises to save and invest safely. From there, they could be actively in capital budgeting for reinvestment, capital contribution and business. 

4. Empowering people to make the right financial decisions 

Financial inclusion equips individuals and organizations with financial knowledge to make better investments, savings and consumption decisions. Also empowering people with the skill to make plan financial management to build stronger financial health in the future for individuals and businesses. 

GIMO x Mobicast: Enhancing Employees’ Welfare With An On-demand Payment Platform

“As the BOD of Mobicast, we believe that it is necessary to constantly explore new ways to enhance employee’s engagement and welfare. At first, the BOD was not yet able to evaluate the benefits of the program. However, we have been successfully persuaded with the positive feedbacks from our own employees, proving to us just how useful the program can be.”

Ms. Tran Thuy Duong, HR Manager of Mobicast

Introduction

Keeping employees’ best interests at heart, the human resource management team at Mobicast constantly pushes themselves, looking for ways to ensure and enhance employees’ welfare. However, due to the lack of options, they have yet to find the most suitable and optimal solution until GIMO came into the picture. Starting from 2020, Mobicast collaborated with GIMO to adopt our on-demand payment platform as a new financial benefit for all employees. 

The Challenge

In Vietnam, EWA (Earned Wage Access) remains a relatively foreign concept. Not many companies have had the chance to study and try for themselves, Mobicast included. At the beginning stages of implementation, Mobicast’s board of directors cannot accurately evaluate the benefits of this new program. Not only so, implementing such a new tech-based program can be timely and costly to the human resource department. 

Our Practice

GIMO organized a launching event for all of Mobicast’s employees to equip them with the necessary information about GIMO and our platform. After the launch, GIMO also prepares a condensed questionnaire to survey the employees’ experience with our mobile app and their purpose of usage. We also collected the testimonials of the human resource management team members. 

Key Takeaways

69% of the respondents used GIMO for emergent payment. This was concluded to be the most popular reason among the respondents. Aside from that, 38% uses GIMO to pay off their credit card, and 31% uses GIMO to make personal investments. It is safe to say that most respondents have financial burdens in their daily lives that need to be taken care of with urgent cash payments. 

On average, each of the respondents makes four payment requests every month on GIMO’s platform. Since provided with GIMO’s platform, the majority of the respondents seem to have used it regularly. All of the respondents have agreed that GIMO had indeed relieved some of their financial burdens. 

100% of the respondents had a pleasant experience using GIMO’s platform. The majority find that the app is easy to use, and the request is processed relatively quickly. Additionally, the overall rating for the app is now at 4.31 on a scale of one to five, showing that the respondent has little to no trouble accessing their earned wage every month through GIMO’s app. Ms. Dung, one of Mobicast’s employees who have been using GIMO for the past six months, stated that GIMO has helped with her finances quickly and conveniently. Thoroughly enjoying her experience, she has also recommended GIMO to her friends and colleagues, giving highly positive feedback. 

GIMO’s survey has proven that when employees can proactively access their earned salary, their lives seem to have significant improvement. The financial burden is an issue for every working human being, and GIMO’s solution can help with just that. Not only are we giving employees rightful access to their earnings but also bettering their personal financial management. 


About Mobicast

Mobicast is a Vietnam-based start-up in the field of MVNO. The Mobicast team focuses on developing telecommunication solutions and useful technologies for users towards a user-friendly experience and optimal performance with a customer-centric orientation. 

 

About GIMO

GIMO is one of the pioneers to provide Earned Wage Access solutions to Vietnamese enterprises and workers. With two-thirds of Vietnam’s working population having no or limited access to the formal lending system, we see an opportunity to make a difference. GIMO has been serving more than 6,000 workers from nearly 20 partnered businesses to access their earned wages.