Vietnam Work Culture
Vietnam Work Culture
To succeed in business in Vietnam, it is vital for both employers and employees to have a strong understanding of the business culture.
As a global PEO (Professional Employment Organization) it is our goal to be familiar and updated with the business culture in the country we work with and in. By sharing our knowledge about Vietnamese work culture, we want to support your global expansion plans. Therefore, we will address all the aspects of the work culture in Thailand to start your expansion well-informed.
Work Culture in Vietnam
International companies expanding into Vietnam will be taking part in one of the most remarkable economic stories of the last 30 years. Vietnam has left behind the world’s poorest nations and been transformed from a closed economy into an open one and a lower to middle income nation.
Since 2002 Gross Domestic Product (GDP) per capita has increased by almost three times, approaching US$ 3,000. Vietnam bucked the global trend in 2020 to increase GDP by 2.9% and it is predicted to grow by 6.6% in 2021.
This transformation has made Vietnam a driving force among the Association of Southeast Asian Nations (ASEAN) and an attractive target for Foreign Direct Investment (FDI) and multinationals including IBM, Microsoft, PepsiCo, Samsung, and Honda.
However, adjustments must be made. Dealing with financial institutions and tax authorities can be challenging, especially as there have been changes to tax filing, employment, and social security regulations since 2020. Western incomers also must deal with a vastly different workplace culture.
It’s time to ‘get down to business’! Our guide to work culture, business etiquette and employment requirements will help you take those important first steps.
- Punctuality: Being on time is important in building a business relationship, as being late is considered rude. After arranging the meeting by a phone call, be sure to confirm in advance. If the first contact was by email, promptly follow up with a call to show respect and that you value the relationship. Unfamiliarity with the location makes it essential to allow plenty of time through the traffic in one of the larger cities.
- Language: Business will likely be conducted in Vietnamese; if not fluent, interpreters are essential.
- Business Relationships: Be prepared to deal with a hierarchical business structure where responsibility and decision-making filters down from the top. Respect for seniority is as common in business life as in the social world. Always be respectful and follow certain protocols; being too frank or argumentative might cause your counterpart to ‘lose face’ with their peers. If managing a team of Vietnamese, take the time to get to know them.
- Introductions and Greetings: Exchanging bi-lingual business cards is an important ritual and offer your card to the senior member first with the Vietnamese side facing up, using both hands. Vietnamese appreciate being addressed initially in their own language, coupled with a handshake and slight bow.
Allow a female member of the other team to offer her hand first and if it is not offered, a slight bow will suffice. Play safe and address your counterpart by their title and surname. Once the ‘getting to know you’ stage has been reached Vietnamese enjoy exchanging small talk about families and life in general. - Gift-giving: Exchanging small ‘token’ gifts such as pens is common during the first meeting of a developing business relationship.
- Dress Code: Business attire tends to be more formal in the north of Vietnam. But in the hot months, shirtsleeves are acceptable anywhere.
- Negotiating the deal: Protracted discussion can be lengthened by periods of silence – a sign your opposite number is carefully considering the proposal, so don’t interrupt. Confusingly, a silence may be a polite, face-saving way of saving ‘No’. When your counterpart says ‘Yes’ it may simply mean they understand what you are saying and not necessarily agreeing. Avoid misunderstandings by following up meetings in writing.
- Business Meals: Sometimes opposite numbers would like to suggest dining out as a way to get to know you and build trust. Be sure to have a toast ready – and direct yours at the head of their team.
Vietnam’s Minimum Wage
The national minimum wage rates are region-based.
Regions 1 and 2 (covering Ho Chi Minh City and Hanoi urban and rural areas) have a monthly minimum of (Vietnamese Dong) VND 4.42million (US$183). Regions 3 and 4 (provincial cities) VND 3.43million (US$150).
Remainder of country – VND 3.07million (US$133). The rates apply across all sectors of commerce and industry.
Probation Periods in Vietnam
Probationary or trial periods are agreed on a case-by-case basis, depending on the type of job and the qualifications or experience of the new employee.
The Labor Code allows for probation periods of six, 30, 60 or 180 days as agreed by the contract.
Working Hours in Vietnam
The Labor Code of 2020 stipulates working hours should not exceed eight per day and no more than 48 per week. Overtime, by mutual agreement, is restricted to four hours per day, 40 a month or 200 in 12 months.
Industries subject to seasonal variations, such as textiles and clothing, have an annual overtime maximum of 300 hours. Normal working hours are generally from 7.30am till 4.30pm, with a minimum of one free day per week. Workers should have at least one 30-minute break or a 45-minute break for night work.
Shift work is defined as where two people or two groups of workers share the same position in rotation for a period of 24 consecutive hours with a transition of up to 45 minutes between shifts
Overtime in Vietnam
Any time worked over the agreed hours is overtime and should not exceed 50% of normal working hours to a total of 12 hours per day or 40 per month and 200 in the year.
Remuneration is paid at 150% above the hourly rate during a working day and 200% during days off, 300% for working during a public holiday or the following day off. Consent for overtime must be given by the employee.