Năng lực cạnh tranh của lao động xuất khẩu việt nam trong thị trường đông bắc á so sánh giữa các nước ASEAN

Southern Luzon State University
Republic of Philippines

Thai Nguyen University
Socialist Republic of Vietnam

COMPETITIVENESS OF VIETNAMESE LABOR EXPORT IN
NORTH-EAST ASIA MARKET: A COMPARISON
ACROSS ASEAN COUNTRIES

A Dissertation
Presented to the
Faculty of the Graduate School
Southern Luzon State University, Lucban Quezon, Philippines
In Collaboration with
Thai Nguyen University, Socialist Republic of Vietnam

In Partial Fulfillment
of the Requirements for the Degree of
Doctor in Business Administration

HOANG VAN HUNG (TOM CRUISE)
August, 2013


APPROVAL SHEET


iii
DEDICATION

This piece of work is dedicated
To My Family


iv
ACKNOWLEDGMENT

The researcher wishes to extend her most sincere gratitude to the following
people who made this piece of work a reality.
Dr. Cecilia N. Gascon, President of Southern Luzon State University, Republic
of the Philippines, who made possible the linkage with Thai Nguyen University and
the offering of Doctor of Business Administration, through the ITC-TUAF;
Dr. Dang Kim Vui, the President of Thai Nguyen University, who made the
linkage with Southern Luzon State University, Republic of the Philippines and the
offering of Doctor of Business Administration, through the ITC-TUAF;
Dr. Alice T. Valerio, for her support and supervision throughout my graduate
study program. Her kindness and daily instructions in the last three years are greatly
appreciated and this dissertation is as much her work as mine;
Prof. Nordelina Ilano, Director, Office for International Affairs of URS for her
support to the DBA1 students;
Dr. Tran Thanh Van, the Dean of the Graduate School of Thai Nguyen
University, for his assistance and encouragement to pursue this study;
Dr. Dang Xuan Binh, the Director of International Training Center, for his
assistance and encouragement to pursue this study;
Dr. Nguyen Thanh Hai, the Vice Director of International Training Center, for
his assistance and encouragement to pursue this study as DBA Class Manager;
To all the SLSU and TNU Professors, for their support and guidance extended
throughout the graduate studies in Thai Nguyen University, Vietnam;
To his ever dearest friends for their kindness and remarkable support;
To his family, for their support, encouragement for being the sources of

greatest inspiration, which made his career a success.


v
ABSTRACT

In recent years, the world has witnessed the economic recovery of a number of
countries affected by financial crisis in the period 2008 to 2009. International
economy is in ongoing strong growth, but unemployment all over the world puts
pressure on labor and jobs. Each year, Vietnam economy have more than 1 million
new labors and labor status is always excessive as we mention before. Exporting labor
is essential way to solve this issue and earning foreign currency for economy.
Competition happen in everywhere and every sectors, including labor export. Hence,
determining competitiveness of Vietnamese labor is a key point to develop.
With this point of view, the dissertation proposes a system of a set of
criteria to evaluate the competitiveness of labor export. Base on these indicators,
the dissertation evaluated competitiveness of labor export under two points of
view: Direct assessment of international employers and indirect evaluation by
comparing capacity of labor export and qualifications of international employers.
In addition, the dissertation compared the perceived competitiveness of labor
export across countries and markets.
Further, the dissertation uses multivariate regression equation to evaluate
fully factors affecting to competitiveness of export labors in North-East Asia
market. Base on these analyses, the dissertation proposes value recommendations
to improve competitiveness of Vietnamese labor export. They are highly value
information for government in building plans and strategies of labor export.

Keywords: Competitiveness, Labor export, ASEAN, North-East Asia

vi
TABLE OF CONTENTS

TITLE PAGE

Page

APPROVAL SHEET ................................................................................................... ii
DEDICATION ............................................................................................................. iii
ACKNOWLEDGMENT.............................................................................................. iv
ABSTRACT...................................................................................................................v
TABLE OF CONTENTS ............................................................................................. vi
LIST OF TABLES ..................................................................................................... viii
LIST OF FIGURES .......................................................................................................x
CHAPTER
1

INTRODUCTION………………………………………………………………1
Background of the Study.......................................................................................1
Statement of the Problem ......................................................................................5
Objective of the Study ..........................................................................................7
Hypothesis of the Study ........................................................................................8
Significance of the Study ......................................................................................8
Scope and Limitation of the Study........................................................................9
Definition of Terms.............................................................................................10

2

REVIEW OF RELATED LITERATURE AND STUDIES . . . . . . . . . . . . . . 14
Related Literature................................................................................................14

Related Studies....................................................................................................32
Conceptual Framework .......................................................................................43

3

METHODOLOGY….........................................................................................45
Research Design..................................................................................................45


vii
Time and Place of Study .....................................................................................46
Sampling .............................................................................................................46
Respondents of the Study....................................................................................47
Data collection ....................................................................................................48
Research Instruments ..........................................................................................48
Methods of Analysis ...........................................................................................50
4

RESULTS AND DISCUSSION…........................................................................53

5 SUMMARY OF FINDINGS, CONCLUSIONS AND RECOMMENDATIONS.100
Summary of Findings .......................................................................................100
Conclusions .......................................................................................................103
Recommendations .............................................................................................104
BIBLIOGRAPHY ......................................................................................................107
QUESTIONNAIRE ...................................................................................................112
APPENDIX ...............................................................................................................121
CURRICULUM VITAE............................................................................................123

viii
LIST OF TABLES

Table

Page

1

Distribution of the Respondents by Working Area

47

2

Mean distribution of respondents’ perception in terms of academic

57

performance following citizen
3

Mean distribution of respondents’ perception in terms of academic

58

performance following working sector
4

Mean distribution of respondents’ perception in terms of technical

skill following citizen

5

60

Mean distribution of respondents’ perception in terms of technical
skill following working sector

6

Mean

distribution

of

respondents’

61
perception

in

terms

of

Communication skills following citizen
7

Mean

distribution

of

respondents’

63
perception

in

terms

of

communication skills following working sector
8

Mean distribution of respondents’ perception in terms of Performance
rating of pervious employers following citizen

9

69

Mean distribution of respondents’ perception in terms of working
attitude following citizen

13

68

Mean distribution of respondents’ perception in terms of working
seniority following working sector

12

67

Mean distribution of respondents’ perception in terms of working
seniority following citizen

11

66

Mean distribution of respondents’ perception in terms of Performance
rating of pervious employers following working sector

10

64

71

Mean distribution of respondents’ perception in terms of working
attitude following working sector

72


ix

14

Mean distribution of respondents’ perception in terms of compliance
with compliance with labor contract following citizen

15

Mean distribution of respondents’ perception in terms of compliance
with compliance with labor contract following working sector

16

81

Mean distribution of INTERNATIONAL employers’ perception in
terms of average evaluation following citizen

22

80

Mean distribution of TAIWANESE employers’ perception in terms of
average evaluation following citizen

21

79

Mean distribution of KOREAN employers’ perception in terms of
average evaluation following citizen

20

76

Mean distribution of JAPANESE employers’ perception in terms of
average evaluation following citizen

19

75

Mean distribution of respondents’ perception in terms of average
evaluation following working sector

18

74

Mean distribution of respondents’ perception in terms of average
evaluation following citizen

17

73

82

Ranking of factor priority in term of International employers’
perception following citizen

83


x
LIST OF FIGURE
Figure
1

Page
Conceptual framework showing the factors affecting the
competitiveness of labor in the Vietnamese market.......................

44


Chapter 1
INTRODUCTION

Background of the Study
In the last some years, the world has witnessed the economic recovery of a
number of countries affected by financial crisis in the period 2008 to 2009.
International economy is in ongoing strong growth. However, the unemployment all
over the world puts pressure on labor and jobs. Obtaining the moving regular of

international labor market, Vietnam already offered specific policies and resolutions
to expand some new labor markets. In particular, the Communist Party of Vietnam
and its Government defined that labor and specialist export is an important external
economic sector and is also a part of handling employment policy. This policy is put
in the annual target by the Congress.
Expanding the labor export market is a suitable economic development
direction with an open integration path. This expansion takes part in handling jobs for
the laborers throughout the nation. Labor exportation contributes to eliminate famine
and reduce poverty. The remittance from about a half million employees, including
technicians and unskilled employees who live in 40 countries and regions, contributes
a lot to the national budget (approximately 1.6 billion dollars per year). Recently,
labor exportation strongly develops and positively participates in handling
employment policy, increasing income, creating stabilization and developing the
country. However, the requirements for labor exportation is stricter and stricter
regarding labor qualification, workmanship, work regulations and foreign language,
especially for works in workshop, factory. Nowadays, Vietnamese laborers who work
overseas basically match foreign demands but their skills and qualifications are still so


2
limited that this makes it hard to attack any developed economy’s labor market.
Hence, what we must do is to make Vietnamese labor strong and to affirm our
trademark in international market. It requires the real action of the government, the
enterprises, the managers, and the employees interested in labor exportation.
There are many factors, which influence the labor export. Firstly, the
economic crisis dramatically influenced the context in which a growing number of
international migrants had begun to spread from poorer to more industrialized
countries. Secondly, the universalization also affects labor export in a positive way.
Thirdly, competitiveness is one main influence on labor export. In addition, global
labor market is also very important factor.

The labor market is a generalized concept denoting the interaction between the
supply (number of persons available for work) and the demand (number of jobs
available) and the wage rate. The high-income countries are always the potential
destinations for migrant workers.
Labor export in recent years has been one effective solution to generating
employment, helping to increase workers' income and earning foreign currency for the
country. According to the Department of Overseas Labor (DOLAB) (2011) which is
under the direct management of the Ministry of Labor, Invalids and Social Affairs
(MOLISA), since 2001 more than 295,000 Vietnamese have gone to work abroad,
bringing the total number of Vietnamese workers in foreign countries to 400,000. In
2005, the country sent nearly 70,600 workers abroad, a 5 percent year on year
increase. The overseas workers have remitted about 1.6 billion USD to the country.
The labor export sector is one of Vietnam's 1 billion USD export value earners.
Labor export has also helped generate jobs in related services, such as job and
foreign language training, thus reducing the pressure of the matter of employment for


3
workers in the country. Labor export businesses have annually contributed to the State
budget tens of billions of VND from their profits and management fees.
The number of Vietnamese workers in traditional markets has remarkably
increased, including more than 30,000 workers in the Republic of Korea, 10,000
workers in Malaysia, 90,000 workers in Taiwan, and 20,000 workers in Japan.
Vietnamese

workers

have

been

also

sent

to Canada,

United

States

of

America, Australia, Italy and some Middle Eastern countries. These new markets are
attractive for their high wages and proper worker protection laws (DOLAB, 2011).
Vietnam has licensed more than 100 businesses for labor exports, including
40 businesses specializing in labor supply. Many businesses of ministries and
localities have sent large numbers of workers abroad and have taken a high level of
responsibility for their workers, particularly in reducing risks (DOLAB, 2011).
According to MOLISA (2011), in the coming years, Vietnam has a chance to
expand markets for labor exports as the world labor market is in great need of foreign
workers, for a variety of work in construction, manufacturing, electronics assembly,
garment and textile, services, hospitality, health care, domestic labor, sea transport,
fishing, seafood processing, forestry and agriculture, which are suitable to Vietnamese
workers.
Vietnam now has more than 44 million people of working age, with about 1.2
million more people per year reaching working age, a major resource of work force
supply for the domestic and foreign labor markets. According to foreign employers,
Vietnamese workers are industrious, clever and creative. The rate of exported workers
given job training has increased from 35 percent in 2003 to nearly 50 percent in 2005

(DOLAB, 2011).


4
The Ministry of Labor, Invalids and Social Affairs plans to promote the
education and job training for export, and prevent breaches in of the law on labor
exports and instruct local authorities to promote cooperation with businesses in the
recruitment of labor for export. Exporting labor to wealthier parts of the world has
long been something in which Vietnam has lagged behind its Asian neighbors, but the
government hopes to change that soon. As the government sees it, labor exports could
help to ease the country's growing burden of unemployment, as well as alleviate
poverty. It is now pushing to have the number of Vietnamese overseas workers soar
over the next few years. At the same time, the country is already grappling with the
social costs of the campaign: poor people are getting into debt to pay for overseas
trips and workers abroad are becoming vulnerable to abuses (MOLISA, 2011).
Last year, Vietnam exported nearly 15,000 workers, who sent home some
US$220 million. Many countries like Malaysia, Middle East countries, Laos, Japan,
Taiwan, South Korea and Libya, employed in construction, manufacturing industry,
sea transport, seafood processing, hospitality, health care, home service, fishing
industry, forestry and agriculture (MOLISA, 2011).
Falling GDP growth and dwindling foreign investment inflows are largely to
blame for the rising number of jobless workers. Compounding the problem is an
administrative reform drive that plans to slash the government payroll by 15 percent,
and growing redundancies from loss-making state-owned enterprises (DOLAB,
2011).
But it is among farming households, which account for more than 70 percent
of the population, that unemployment could have the most severe long-term
consequences. As the rural community swells and less new land becomes available

5
for cultivation, unemployment is becoming a widespread problem, resulting in largescale unplanned migration to cities (DOLAB, 2011).
It is young, largely unskilled laborers that the government is targeting for
export. But while overseas employers may consider it a plus that they cannot
command high wages, these workers' relative lack of skills in comparison with those
from other countries is a major drawback, as is their inability to converse or
understand a foreign language (DOLAB, 2011).
These shortcomings are already proving problematic for labor exporters here.
Although meager benefits were among things cited as the main recruitment hurdles,
the foreign employers also set high qualification requirements. Applicants had to meet
specific health and age requirements, have a sound knowledge of English, hotel
industry skills and work experience but successful applicants get low, and they have
had to endure a seven-day per week.

Statement of the Problem
Each year, Vietnam economy have more than 1 million new labors (GSO,
2011), and labor status is always excessive as we mention before. Hence, exporting
labor is essential way to solve this issue and earning foreign currency for economy.
Competition happen in everywhere and every sectors, including labor export. Hence,
determining competitiveness of Vietnamese labor is a key point to develop. However,
articles which discuss about this issue are very rare.
Therefore, this study focused on three main concerns. First, this paper will
compare competitiveness of Vietnamese labor export with other three countries:
Philippines, Indonesia, and Thailand. Hence, we can see the gaps between
Vietnamese and other candidates within ASEAN in term of academic performance,


6
technical skill, communication skill, working seniority, working attitude, and
compliance with labor contract.

Second, this study aimed to determine evaluation of international employers
from Taiwan, Japan and South Korea to Vietnamese labor export. In addition, we also
can see comparison between Vietnamese, Filipinos, Indonesian, and Thai about
competitiveness and their factors. More importantly, qualifications of international
managers about imported labor are expressed clearly. Hence, we can understand
strength and weakness of Vietnamese labor, troubles in exportation process and the
gaps of quality we must try achieving.
Third, the level of impact and priority in selecting applicants were interpreted
fully and clearly. Hence, this paper will give some suggestions for both governmental
and local administration to improve competitiveness of labor export that will lead to
an increase in labor export.
Specifically, this study sought to answer the following questions:
1. What is the profile of the respondents in terms of age; sex, health status,
civil status, preceding jobs, weight, height, and work area?
2. What is the level of competitiveness of labor export across countries in
terms of

academic performance, technical skill, communication skill,

performance rating of previous employers, working seniority (in previous
companies), working attitude, and compliance with labor contract as
perceived by the workers and the employers?
3. Is there any significant difference between the level of competitiveness of
labor export as perceived by the international employers and the
international workers?


7
4. Is there a significant difference in the perceived competitiveness of labor
export across countries?

5. What are the factors that affect labor competitiveness?

Objectives of the Study
The study aimed to evaluate the status and competitiveness of Vietnamese
labor in comparison with labor from other Asian countries.
Specifically, this study aimed:
1. To describe the profile of the respondents in terms of:
a) Age
b) Gender
c) Civil status
d) Health status
e) Preceding jobs or previous jobs?
f) Weight
g) Height
2. To analyze the level of competitiveness of labor export across countries in
terms of:
a) Academic performance
b) Technical skill
c) Communication skill
d) Performance rating of previous employers
e) Working seniority (in previous companies)
f) Working attitude
g) Compliance with labor contract


8
3. To compare the perceived competitiveness of the labor export by the
international employers and the international employees.
4. To compare the perceived competitiveness of labor export across
countries.

5. To determine the factors affecting labor competitiveness.

Hypotheses of the Study
The following hypotheses were tested in the study:
1. There is a significant difference in the competitiveness of labor export
across countries.
2. There is a significant difference in the competitiveness of labor export as
perceived by the international employees and international employers.
3. Competitiveness of labor export is significantly affected by academic
performance, technical skill, communication skill, performance rating of
previous employers, working seniority, working attitude, and compliance
with labor contract.

Significance of the Study
The result of this study is envisioned to contribute knowledge to effective and
efficient management of labor export; hence, it will benefit the following:
For the international employers. Based on analysis of this paper, Vietnam’s
government will build special action plans to improve competitiveness of Vietnamese
labors. Hence, international employers can have better and more competitive labors in
the future.
For the Vietnamese laborers. This study will help them understand their
strong and weakness. In addition, laborers also know the requirements from


9
international employers in term of academic performance, technical skill,
communication skill, performance rating of previous employers, working seniority (in
previous companies) and personal characteristics. Hence, Vietnamese labors can
prepare and study to improve their abilities and easier to get success in the future.
This will provide them with assessments and directions for a better future to apply to

working abroad.
For the managers of exportation.

This research will help them in

understanding requirements of international employers. These analyses will be very
important suggestion to build action plains for improving labor competitiveness of
Vietnamese labor. The paper will build up the image, competitive advantage through
superior innovation, improve and meet expectations of international employers.
For the Vietnamese government. This paper will express current status of
Vietnamese labors in term of strength and weakness points; it also shows lots of
useful information about requirement of foreign labor importers. It will be good bases
for Vietnamese government to plan labor development, especially export activities.
For other researchers. This study will help other researches to collect
necessary information in relation to their research fields. Other researches will also
consider the limitations of this research to avoid in case they conduct the research in
same fields.

Scope and Limitations of the Study
The study assessed the competitiveness of export labors among four countries
(Vietnam, Philippines, Indonesia, Thailand) in terms of the following major seven
variables: Academic performance, technical skill, communication skill, performance
rating of previous employers, working seniority, working attitude, compliance with


10
labor contract. This paper considered North-East Asia market only, under evaluation
of three international employer groups, which include Japanese, Korean and
Taiwanese. These main variables were due to the results of reviewing related
literatures and studies.

Definition of Terms
Academic performance refers to the level of education (Primary school, high
school, undergraduate, post-undergraduate) of the respondents.
Competitiveness is the ability of a firm or a nation to offer products and
services that meet the quality standards of the local and world markets at prices that
are competitive and provide adequate returns on the resources employed or consumed
in producing them (Business Dictionary, 2012).
Technical skill refers to the knowledge and abilities needed to accomplish
mathematical, engineering, scientific or computer-related duties, as well as other
specific tasks.
Communication skills refer to capacities of using foreign language of
orientation country to communicate. Knowing English will earn extra point.
Seniority means that an employer considers date of hire a factor in deciding
workplace benefits like promotions, leave schedules, days off, shifts, overtime, and
selection for training.
Demand for labor is a concept that describes the demand for labor that an
economy or firm is willing to employ at a given point in time. This demand may not
necessarily be in long-run equilibrium, and is determined by the real wage, firms are
willing to pay for this labor, and the number of labor workers is willing to supply at
that wage.