Vietnamese worker psychology when negotiating salaries

Vietnamese worker psychology when negotiating salaries

Gross salary or NET salary?

Gross salary is the total income that the employee receives, including salary, allowance, commission … The employee who receives the gross salary monthly must deduct a prescribed amount to pay social insurance. (According to Decision 595 / QD-BHXH, employees must contribute 8% to the retirement and death fund; 1% to the unemployment insurance fund and 1.5% to the health insurance fund)

To attract skilled workers, Vietnamese companies often set an average gross salary of 5-7 million / month. The income structure includes basic salary, allowances, productivity bonus …

Net salary is the salary minus items such as insurance, personal income tax or other deductibles of the employee.

Thus, gross salary = net salary + 10.5% of insurance premium; meanwhile, net salary = gross salary – 10.5% of insurance. Gross salary is the gross income; net salary is the actual salary received.

Vietnam labor minimum wage

Read more: Basic salary in Vietnam: issues that investors need to know

Factors affecting labor when negotiating salaries

Many foreign investors believe that Vietnamese workers have a habit of comparing the wages of different factories, with the mentality of “the grass always looks greener on the other side of the fence”. This is not a bad thing. However, in a competitive human resource environment, besides salaries and promises to increase salaries, skilled workers in Vietnam are also interested in other factors such as working conditions, management methods … of the factory.

  • Working conditions: does the infrastructure such as dormitory system, canteen, air conditioning system – ventilation – workspace … ensure the quality of life? Are the working conditions guaranteed …?
  • Management method: is the production of the factory reasonable or not? Is it guaranteed to be fair?

Therefore, in addition to paying attention to salary / income distribution, the Investor should also care about infrastructure, working conditions … as well as applying some new technologies in management to bring a fair management system, ensuring the interests of employees.

Read more: 5 Characteristics of Vietnamese workers at work