Despite a surplus of buyers willing to pay top dollar, a labor shortage continues to stymie the garment industry’s production capacity and business.
Prices have jumped an average of 15 percent from year to year and some firms are booked with orders through the end of 2010. According to Le Quoc An, chairman of the Vietnam Textile and Apparel Association (VITA), some business owners have had to turn customers away due to the manpower shortage.
Vietnam exported US$5.87 billion worth of textiles and garments in the first seven months of this year, a 17.4 percent rise over the same period last year, according to the General Statistics Office. Shipments to South Korea saw the biggest hike, some 80 percent. The Southeast Asia market is up 30 percent; the US, 23 percent; and Japan, 15 percent.
Do Dinh Dinh, general director of the garment firm Hung Long, said demand for Vietnamese garment products from big importers like the EU and the US soared. Many customers turned to the Vietnamese market after China increased its production prices to serve its salary increase policy for employees.
“There are too many orders for garment firms to fill,” he said. “Orders from the US rose by 40-50 percent.”
Le Ngoc Hoan, general director of Nha Trang textile and garment firm, said the global economic recovery has increased consumption. Thus, the number of orders from his firm’s two biggest buyers, the US and EU, has increased by 30 percent.
But as the number of orders skyrockets, the number of available workers is plummeting. According to the VITA, the number of laborers in the industry dropped by 17 percent in the first half of this year.
Dinh said his firm needs an addition of 1,000 laborers to meet all of its new orders. Now, the firm has 2,700 employees, but the actual number of people reporting for work on a given day is only some 2,400.
“We see workers leaving their jobs every day. Meanwhile, some others are off sick or on leave for their children’s illness,” he explained. “Most garment workers are female.”
His company has had to lower its employment requirements in an effort to recruit, Dinh said. “Now workers only need know how to sew; we had to drop our standards for health and education. Some laborers can’t even fill out an employment application.”
There is an abundant source of laborers in rural areas, but employees in the countryside generally aren’t interested in industrial jobs.
Pham Thi Du, director of garment firm Tien Tien, said garment laborers earn an average of VND3 million ($157.9) and often quit because of low salaries.
“We always have demand for more employees; we could never hire enough workers,” she said. At the moment, the company employs more than 2,000 people.
Hoan from Nha Trang said over 200 workers have quit the company since the beginning of this year for more cushy jobs in the tourism industry – Nha Trang is a famous coastal resort destination.
Meanwhile, his firm has had to hire mostly unskilled workers. “We spend VND500-600 million on vocational training for workers each year, but after undergoing training, they leave for other jobs,” he said.
The labor shortage has affected the turnaround time for many firms. Dinh said his firm typically ships its products out by sea. When orders are overdue, however, he has to use airplanes. Meanwhile, aviation fees are very high, some $10 per kilogram for products delivered to the US.
Many garment firms have increased workers’ salaries to lure more laborers. Dinh said his company increased the starting salary for its employees by 15 percent to no avail.
His firm has also opened a production establishment in rural Son Dong District of Bac Giang Province, to lure local laborers. The firm offered allowances and vocational training to the laborers, with unimpressive results.
“Early this year, we held a vocational training course for over 200 laborers there, but only 70 percent of them stayed to work for us after the course finished,” Dinh said.