Pandemic will have long-lasting impact on business operations in Vietnam
Many factories, including about 200 contracted factories that make sportwear for Nike Corporation, resumed production in Vietnam earlier this month.
However, if this return is to be resilient and long-lasting, a range of changes to business practices and relationships may have to be realised.
|Tan De Garment provides COVID-19 vaccines to its employees in Thai Binh Province. Photo courtesy of the firm|
Nobel Kinder, Sustainable Development Director of Nike Corporation, committed to continuing to invest and expand production in Vietnam when he met Prime Minister Pham Minh Chinh on the sidelines of the COP26 Conference in Glasgow, Scotland on November 2.
As of November 1, as many as 1,324 of 1,412 enterprises in the export processing zones and industrial zones of HCM City have registered to resume operations. Of these, 216,000, or 88 per cent, of employees have returned to work.
More than 83 per cent of businesses in Can Tho have also returned to production. As of November, 2,975 manufacturing enterprises have resumed operations.
A representative from an industrial park in HCM City told local media that plants operated by Samsung Electronics and Intel will "provide assistance so that both companies' facilities will return to full production this month.”
Bui Ta Hoang Vu, director of the Department of Industry and Trade, HCM City, told local media: “With the implementation of different solutions to support enterprises to restore production, the industrial production situation in the city has gradually improved."
The October IIP index of Ho Chi Minh City increased by 23.6 per cent compared to September, while the processing and manufacturing industry in October also increased by 19.7 per cent from the previous month.
To continue to support businesses in restoring production, Vu’s department will strengthen connections between banks and businesses, provide each industry with preferential support packages, implement programs to stimulate investment, support enterprises in renewing machinery, equipment, and technology to improve product quality and increase trade promotions to support enterprises in expanding into domestic and export markets.
Though similar actions have happened in most industrial parks around the country, local clusters, enterprises, and production facilities have faced difficulties in terms of raw material and labour costs.
According to PwC, the spread of COVID-19 is still being felt globally across operations in ways that are difficult to model and assess. Supply chains in every country, including Vietnam, are affected.
As the country has moved from crisis response to recovery, experts from PwC have encouraged local businesses to better prepare their supply chains for future shocks.
According to the firm's survey in May, the supply chain of tomorrow no longer centres around efficiency and cost management but rather on building a secure and resilient supply chain that can handle changes in the relationship between employees and employers.
Request to change corporate governance
Nguyen Thanh My, chairman of Rynan Technologies Joint Stock Company, says that it is time for enterprises to introduce policies that allow for uncertain situations, that maintains production and does not disrupt supply chains.
He told Việt Nam News: "Enterprises need to adjust their pace with specific five-year and ten-year plans and an adjustable roadmap to fit any context."
Many experts consider the business situation at present as long-lasting, adding that if enterprises want to rebuild as before, they must change themselves.
A few months ago, they needed to fit with the new working method of three-one-site. Now that production activities have been restored, they are struggling to solve labour shortages and build a defence system against the risks of the next possible COVID-19 wave.
In particular, to adapt to the new situation, enterprises must solve the problem of renewing business models and creating new cultures in factories and workshops, said the experts.
Nguyen Ha Trang, Human Resources Director of Pepsico Foods Vietnam, pointed out that, with empathy and concern, the company was able to preserve uninterrupted production and business activities.
Trang told Việt Nam News: "We always paid attention to employees so that nobody felt abandoned during the pandemic, so they can work with peace of mind and take care of their families."
The firm set up health hotlines and gave welfare gifts to employees' homes, said Trang, adding the activities have not only helped employees overcome difficulties, but also demonstrated the corporate culture of solidarity, attachment and mutual support in corporate governance and operation.
Nguyen Minh Tuan, Human Resources Director for Southeast Asia of Avery Dennison RBIS Company, said most of the employees felt the inconvenience of not being able to go home in the pandemic. Understanding from the company leadership played an important role in giving great motivation to the employees in such a difficult time.
As CEO of the human resource firm of Talentnet, Tieu Yen Trinh said that businesses will no longer operate like a machine, but will organise flexibly like a "living entity". Corporate governance methods should be operated in a circular model where the leader will easily cover all activities of the business by connecting, interacting and supporting all staff.
Trinh said it would help eliminate unnecessary boundaries between leaders and employees, encouraging them to stay with the company.
As an example, Tan De Garment, with 18,000 workers, has launched a mobile app in October to connect all its employees from all nine factories in Thai Binh and Hung Yen provinces.
Nguyen Tien Phuong, chairman and CEO of Tan De Garment Company, told Việt Nam News: “The app is to help his workers get updates on the company’s policies and to connect them as a family."
As part of its long term and sustainable development plans, Phuong's firm has been recruiting local employees in Thai Binh to work in the plants in the province, so it does not have to face the issue of workers leaving in the crisis.
Source: Vietnam News
Deputy Prime Minister Vu Duc Dam has asked the Ministry of Labor, War Invalids and Social Affairs (MOLISA) and localities to design a support package for people returning to their jobs after lockdown.
After the fourth Covid-19 pandemic, more than 1.3 million workers have returned to work in Ho Chi Minh City.