The Changing Face of HR in Vietnam

In the year 2000, I had the opportunity to backpack from Ho Chi Minh, in South Vietnam, to Hanoi in the North. Over a wonderful month, I explored every beach and mountain I could find and took a long slow and bumpy journey north. I took the night train from Hanoi to the splendid remoteness of the hill tribe town of Sapa, and even climbed Mt Fansipan, Vietnam’s occasionally snow-capped highest mountain.

Fast-forward 13 years, and as I sit back in a modern, gleaming skyscraper in Ho Chi Minh to file this report, I reflect on how fast life has transformed for Vietnam. The pace of growth for multinationals has been relentless and this is reflected in the current “stretch” on the HR talent base in the market. Vietnam represents one of ChapmanCG’s busiest HR search markets and we frequently get asked by Asia Pacific HR Leaders to bolster their HR teams in this market.

So with all this in mind, I flew to Ho Chi Minh to join Anna Stennett, HR Head of ANZ Vietnam, to co-host an afternoon for 40 HR Leaders. Our topic of choice was ‘The Effect of Ongoing HR and Business Transformation on your Company.’ With HR leaders in attendance from British American Tobacco, Colgate Palmolive, Columbia Sports, Deutsche Bank, Nestle, Standard Chartered, Syngenta, and even local companies like VietVam, we would hear case studies from business leaders in ANZ, Deloitte and UPS on their HR transformation journeys.

ANZ

Tareq Muhmood, General Manager of ANZ in Vietnam, opened the session talking about the importance of HR playing devil’s advocate. “The key for talented HR Leaders is to really understand business strategy and then understand their role in executing this strategy,” said Muhmood. “With high resourcing needs, I also count on my HR team to help re-engage overseas Vietnamese talent potentially back into the Vietnam market, as we are hungry for those hires who can help enrich our local talent base,” he added. Muhmood felt that the biggest challenge for the HR profession in Vietnam is the struggle to let go of the day to day matter: “HR needs to be a strategic advisor and let go of payroll, operational issues and other distractions.”

Anna Stennett, HR Head from ANZ, then gave an enlightening presentation on the company’s transformational HR journey in both Vietnam and Asia Pacific. She talked about the ‘pre-transformation days’ when every HR practitioner did a bit of everything, including payroll, recruitment and other operational HR processes. “ANZ reorganized to a structure where a shared services model was set up for repeatable transactions and functions like payroll and benefits, recruitment, as well as learning and development,” said Stennett. She added that HR support has been tiered into three levels, with ‘Tier Zero’ enquiries seeing employees routed to the intranet and being totally self sufficient. ‘Tier One’ involves queries which can be dealt with by a help desk in Manila. Lastly, ‘Tier Two’ queries, often involving local regulations, are routed from Manila back to individual country HR Managers.

UPS

Jeff MacLean, Managing Director of UPS for Vietnam and the Indochina region, and who interestingly comes from an HR background, then discussed UPS’ growth story in Vietnam. When MacLean took up the role in 2009, UPS had just 21 people in Vietnam. It now boasts over 300 staff. “Finding the people, training them, then making sure they did what they were trained to do were my three biggest challenges,” said MacLean. “With stringent requirements around English language abilities, technology skills, safe driving, occupational health and safety, we found it difficult to go out and poach from competitors: the talent market we wanted simply didn’t exist.” UPS elected to rely primarily on outsourced providers when it came to HR, particularly around recruitment, training and payroll. Today MacLean has built a strong leadership team and the company is thriving.

Deloitte

Finally, Bruce Newton, the Vietnam HR Head for Deloitte, who has been with the company for three years, talked about his experience. Deloitte too had gone through a steep HR transformation under his tenure. The company boasts 800 employees including 21 internal HR Partners. “The pressure points in HR have been around developing effective HR Business Partners and getting appropriate depth and maturity in the HR team,” said Newton. The company operates a shared services model out of Malaysia, covering South East Asia, with its regional headquarters in Singapore. However, it has been impossible to outsource certain aspects of HR to this central function, unlike other countries in the region, due to legislative requirements in Vietnam.

HR Leaders in the room agreed on the following points regarding the current challenges in the HR market in Vietnam:

• HR is becoming an increasingly attractive area for university talent to specialize in, but demand is far out-stripping supply;
• Generation Y now occupies a large percentage of HR positions and finding tenure and long-term depth in HR can sometimes be a challenge;
• Many companies are looking internationally to find HR and business talent to bring back to Vietnam;
• The legislative environment in Vietnam remains tough, and while many multinationals would like to outsource more of their operational HR practices to a regional shared services function, this option is somewhat limited.

I look forward to watching the developments in the Vietnamese market and will continue to keep our HR Leaders around the globe up to date with Vietnamese HR trends.

The Chapman Consulting Group HR Leader Networking Sessions

Each year The Chapman Consulting Group brings together select groups of HR Leaders in various locations around the globe. These sessions provide an ideal forum for discussion of the current trends and critical issues in the HR industry, while forging key relationships within the field. See HR Networking for information on forthcoming sessions.