Chinese firms' aggressive recruiting and shifting job preferences among Vietnamese youth have left Korean companies facing a labor shortage.
Chinese companies such as Goertek and Luxshare have brought in large production facilities, and among foreign firms newly entering Vietnam in the first half of this year, Chinese companies accounted for the largest share.
Chinese companies are offering exceptional terms to lure away core employees of Korean firms in Vietnam.
Under the guise of signing bonuses, they pay about one month's salary, roughly 500,000 to 600,000 won, in cash, and they offer employees with four to five years of experience at Korean companies salaries up to twice the prevailing market wage.
Vietnamese young people's preferences in language study are changing, and in fact the admission cutoff for Chinese language programs at Hanoi University has overtaken that for Korean programs.
Job postings requiring Chinese rose 50 percent in a single year, and Chinese proficiency is becoming essential even in service sectors such as real estate.
Vietnam's youth unemployment rate remains close to 9 percent, and more than 1.6 million young people are classified as not in employment, education or training, reflecting a shift in the job market.
Rather than working in industrial park factories, they prefer urban "city jobs" in tourism, education, and services, and they look to platform work such as food delivery and ride-hailing as alternatives that can pay more than factory work.
Some analysts also say that negative perceptions of the demanding work pace and so-called "kkondae culture" at Korean firms are further fueling young people's reluctance to work in factories.
Each year, 130,000 to 150,000 young Vietnamese take jobs overseas, and working in Korea or Japan can earn them three to five times what they would make in Vietnam.
Some Korean large and mid-sized companies already operating in Vietnam are easing the labor shortage by reducing their reliance on manpower through smart factory systems, and efforts such as incentives for long-serving employees and expanded promotion opportunities are needed.
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