Garment: Labor screening looms large for apparel sector

Labor screening looms large for apparel sector

Vietnam Net 02:43' 23/01/2009 (GMT+7)

VietNamNet Bridge – When the global crisis bites, workers are the losers. This proves right for the local garment and textile industry when many laborers now see the axe falling on them as more and more companies either face closure or scale down manufacturing. Tens of thousands of workers in the south have either been laid off, become underemployed, or have quit jobs due to falling compensations. But, many experts say, the worst has yet to come, and after the prelude, the main miserable scene will come after Tet holidays, when employers will be more choosy, and unskilled workers will be screened. Many more will likely be given the sack. Many enterprises affirm that they no longer have a thirst for labor like months ago as they have to lay off a large number of workers due to lack of outsourcing orders. Some big corporations even think that it is a good chance to restructure their workforce after the Tet holidays. Business scale that matters Many enterprises affirm that they no longer have a thirst for labor like months ago as they have to lay off a large number of workers due to lack of outsourcing orders. Only big apparel enterprises can survive, while small ones will undergo a life-and-death situation this year, which according to a practitioner in the industry will be tougher than last year. “Vietnam’s garment and textile industry cannot make any improvements this year, especially small enterprises whose orders intrinsically depend on parent firms,” says Pham Xuan Hong, vice chairman of the Vietnam Textile and Apparel Association (Vitas). To date, the gap between big and small enterprises is being painfully felt, as big corporations still receive orders till late June and maintain a strong growth rate, while smaller ones will see poorer business performances than last year and find it difficult to secure orders to maintain workforce. Wages are also different accordingly. Big garment-textile corporations like Nha Be, Phong Phu, or Viet Tien offer a worker around VND2.2-2.6 per month while that in small firms is just VND1.8 million. The income gap is widening, though. Some six months ago, strong enterprises rarely reduced working shifts though it is quite popular in others. Therefore, laborers with a low basic salary in such companies managed to work extra time to raise income. Therefore, real incomes of workers in the industry half a year ago did not show any considerable gap. However, the situation will get worse this year when employers of small firms find it extremely difficult to have enough orders. Their workers will become underemployed due to a reduction in working shifts, and therefore will see their income fall deeply. Unlike bigger firms with a stable number of orders, small ones are now rashly receiving any outsourcing orders regardless of quantity or price to survive the crisis. Only skilled laborers to be recruited Job hopping is becoming problematic, although this used to be a popular phenomenon in the past. “Workers switch working places on and on,” says Vu Ngoc Quyen, a representative of Vitas’s Labor Union, citing that job-hopping is not a new matter in the garment-textile industry. Unlike previous years when only a modest number of laborers hopped to another enterprise for a more attractive salary, they are now rushing to big enterprises due to a wide difference between the two wage levels. Therefore, large companies will witness labor redundancy and will recruit skilled laborers only, while small ones will face a labor shortage. The human resources manager of a big garment-textile corporation in HCMC says that he recruited over 500 workers in the last three months of last year. In late 2007, his enterprise was able to recruit only 30 staffs per month. His company, which is a large-scale corporation with a workforce of over 20,000 employees, will post up a recruitment notice after the Tet holidays, but certainly with stricter requirements on labor skills than before. The company will organize a skill contest for applicants and only qualified people will be employed. Phong Phu Textile Co., another leading enterprise in the city, provides a Tet bonus of up to VND6 million for its worker. “With high salary and bonuses, our company can stabilize the workforce this year and only recruit well-trained employees if needed,” says Luu Dang Thuong Thuong, vice chairwoman of Phong Phu’s Labor Union. Tuan Nguyen Nghi, managing director of Nha Be Garment Joint Stock Co., also shares the view, saying his company’s workforce will be stable this year as more workers will apply for jobs with higher income in his company. “We maintain a high Tet bonus of over VND5 million this year. Besides, massive layoffs are occurring widely in the industry will ensure labor supplies for Nha Be,” Nghi adds. HCMC Labor Union’s vice chairman Truong Lam Danh says that big enterprises like Viet Hung, Nha Be, Viet Tien, or Viet Thinh keeps on sending recruitment announcements to his office despite a strong dismissal trend at present. “Among over 10,000 HCMC laborers who have lost jobs due to economic slowdown, 8,000 people have been recruited by these big companies,” Danh says. Pham Xuan Hong of Vitas advises that laborers should improve their working skills to find a job in big corporations as the garment-textile industry will still meet more difficulties this year.