Facing resignations of public employees, Vietnam plans to raise the salary index by 21%

With almost 40,000 public employees who resigned in two and a half years, especially in healthcare and education, Vietnamese authorities plan to increase the public salary index by 21 percent.

National Assembly of Vietnam
The National Assembly of Vietnam on October 20 2022, during the opening of a 21-day session during which the legislature reviews budget allocations and draft laws | © Vietnam National Assembly

Updated October 21

Vietnam public administration has been experiencing a surge in resignation, since the COVID-19 pandemic started, with people preferring to take jobs in the private sector.

Almost 40,000 public employees quit their jobs in the past two and a half years, according to the deputy minister of Home Affairs of Vietnam. They account for about 0.8% of all Vietnamese public administration staff. In Vietnam, one in ten employees works for the administration.

A vast majority of people who resigned, 35,000 of them, were under contract and 4,000 held permanent positions as civil servants. Resignations took place in local administration and agencies for 82 percent; 18 percent worked in the central public administration.

While authorities ambition to add 66,000 teachers by 2026, education leads the trend with more than 16,000 people who left their position. They are followed by 12,000 people from healthcare. Both sectors have seen their working conditions heavily affected by the COVID-19 pandemic. The country is also suffering from a shortage of drugs, medical supplies and equipment.

With people opting for better pay and conditions in the private sector, especially in large cities and remote areas, the Vietnamese government is therefore working on increasing compensation and the salary index by 21 percent.

Inflation was 3.8 percent in September 2022 and is forecast to be 4-4.5 percent in the coming months, according to Vietnam’s general statistics office.

Used as the calculation basis for the payment of public employees, the salary index will increase from 1,490,000 dongs ($61) per month to 1,800,000 dongs ($73). It hasn’t been adjusted since July 2019 instead of an annual evaluation. Meanwhile, the private sector saw a raise, the third in three years, of the minimum wage by 6 percent last July. The average monthly income of all workers nationwide in the first 6 months of 2022 grew by 5.3 percent.

With the new salary index, the lowest wage of a civil servant would be about 2.01 million dong gross ($81) per month and the highest pay would reach 14.4 million dongs ($581), according to Lao Dong, the website published by the Vietnam General Confederation of Labour, the sole national trade union center in Vietnam.

The National Assembly, the supreme organ of the state with constitutional and legislative powers where 97% of the seats are occupied by members of the Vietnam Communist Party, gathered on October 20 for a 21-day session during which it will review and approve the budget and some draft laws.

Assembly’s Finance and Budget Committee unanimously proposed the increase of salary index for the budget of 2023 to 2025 as well and suggested the government develop a financial plan to ensure its feasibility.

On October 21, the ministry of Finance’s plan expects to add 60 trillion dongs ($2.4 billion) for revenue adjustments. It includes the salary index boost and a similar increase (21%) in the monthly allowance, a permanent bonus check granted for important sectors like education and healthcare, as well as a 12.5 percent increase in social insurance benefits and a raise for some pensioners.

About 44 trillion dongs ($1.8 billion) will be allocated to the new salary index, according to the public newspaper VietNamNet. It would add 0.54 percent to the inflation rate authorities estimate.

Adjustments will take place starting July 2023.

Healthcare personnel’s monthly allowance will increase from 40% to 100% of what can be granted. This change will start from January 2023, accounting for about 5.4 trillion dongs ($218 million) a year in the budget.

However, it has been decided a broader salary reform in the country will not be included in the 2023 budget.

But this plan also comes at a time when Vietnamese authorities have been downsizing administration personnel, resulting in work overload and amounting pressure on individuals, according to the ministry of Home Affairs.

Nevertheless, the socialist country still plans on modernizing its administration, reducing layers of management and individualizing accountability to improve its productivity.

Read more about Vietnam

Ủy ban Tài chính - Ngân sách nhất trí đề xuất tăng lương cơ sở, Vietnam government information portal, October 2022

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