Concerns about PCI component indexes of Nghe An

Problems and bottlenecks

According toVCCI's announcement results in 2022Of the four indexes that fell in Nghe An's rankings, the two indexes that fell the most were the market entry index (from 29th to 46th) and the labor training index (from 31st to 48th).

The next index is time cost from 30 to 42; land access index continues to decrease from 40 to 45.

On the contrary, 4/10 indexes decreased in score, falling to the average level (outside the top 30): market entry decreased by 0.22 points, down 17 places; land access decreased by 0.25 points, down 05 places; time cost decreased by 0.49 points, down 12 places; labor training index decreased by 0.77 points, down 17 places.

The business support policy index alone decreased by 0.93 points but increased by 6 ranks.

Provincial Competitiveness Index PCI 2022.

The decline in the component indexes has brought disappointment to many people and raised questions and pressure for managers in related fields.

Recruiters meet vocational students at the Vietnam - Korea Technical Vocational College Job Connection Conference. Photo: Nguyen Hai

In fact, the low scores of the above component indicators in 2022 are not surprising, but have been pointed out in the seminars and analysis of the PCI index published in previous years. Accordingly, the indicators of land access, informal costs, market entry and labor training of Nghe An have continuously ranked at the bottom in recent years.

Specifically, the market entry index ranked 16th in 2019 but dropped to 44th in 2020, down 28 places; in 2021 it rose to 29th, up 15 places, but in 2022 it dropped to 44th, down 17 places. Next, the land access index ranked 42nd in 2019, rose to 35th in 2020, up 7 places, but in 2021 it dropped to 40th, down 5 places, and in 2022 it continued to drop 5 places to 45th; the labor training index ranked 23rd in 2019 but dropped to 42nd in 2020, down 19 places; in 2021 it rose 11 places to 31st and in 2022 it dropped 17 places to 48th.

Observing the PCI indexes in the past 4 years, we see that although the province has made efforts to improve, in general, the indexes and PCI components of Nghe An are still not stable and sustainable. This year, they improve a little but next year they decrease and vice versa. There are indexes that have increased by dozens of levels this year but last year they also dropped and no one is sure that next year they will drop even further.

Consulting for students on vocational training after graduation, completing long-term vocational training programs at the Provincial Employment Service Center. Photo: Nguyen Hai

An expert from VCCI Nghe An frankly said: The above component indexes, especially the index of land access or labor training, have inherent limitations and bottlenecks such as small and medium enterprises are not qualified to rent land in industrial parks with complete infrastructure investment and do not have resources to clear and find production sites; if labor income is not improved, it is difficult to recruit skilled, high-quality workers and vice versa... In the near future, if the province does not have a fundamental and breakthrough solution, it will be very difficult to improve in the short term.

Mr. Tran Quoc Thanh - Director of the Department of Science and Technology - the agency assigned by the Provincial People's Committee to develop criteria and methods for assessing the competitiveness index at the department, branch and district and town levels in the first phase shared: The fact that the component indexes have decreased does not mean that the locality or branch has done nothing, but it could be that the locality's attention and efforts in the field are not good enough; or it could also be that the province has also improved, but other provinces have determination and specific solutions, so the results are better and should push our indexes down. The problem is that after each time the ranking is down, the province and related fields need to objectively evaluate to find solutions to improve...

How to improve labor training index?

In the PCI 2022 announcement table, there are 4 indicators that have not improved for many years and are still "stuck in place", including labor training, land access, market entry and time costs.

Among the above indicators, the one that is underrated and unfortunately falls in rank is the labor training index. The reason is that it is regrettable becauseNghe An has the strongest vocational training system in the Central region., abundant unskilled labor force and a large proportion of trained workers. However, the labor training index (including small variables such as the proportion of enterprises assessing whether it is easy to recruit unskilled workers, technical staff, and supervisory management staff (%); the proportion of workers in enterprises who have graduated from vocational training institutions). With the ranking based on these small variables, Nghe An ranked 48/63 and is in the bottom group of the country and the score ratio is 20-30% lower than the top provinces and cities.

Practical lesson on the machine of teachers and students of Nghe An Vocational College of Small Industry. Photo: Nguyen Hai

Mr. Dinh Van Phong - Head of Enterprise and Labor Management Department, Southeast Economic Zone frankly said: The labor training index is actually the comments and assessments of private enterprises in the area on recruiting unskilled labor, technical labor, management and supervisory staff in our province. In this regard, Nghe An has an abundant labor source, but due to the low salary and income, no skilled or technical laborer wants to stay.

In fact, with monthly salary only 70% of that of other provinces and no benefits or seniority allowances, and expensive living expenses such as rent, electricity and water bills, recently, instead of staying in their hometown to work, many workers after attending job interviews at industrial parks have decided to go to other provinces to work or export labor.

Company leaders check the quality of garment products at Minh Anh - Kim Lien Garment Joint Stock Company. Photo provided by the supplier

A representative of an enterprise investing in industrial park infrastructure in Hung Nguyen district said: Contrary to expectations, enterprises renting land and building factories find it very difficult to recruit Nghe An workers to work. To find out the reason, the administrative and human resources department conducted a survey and found that with a fixed regional salary of around 7 million VND/month, workers living far away, without a dormitory or private house, cannot make ends meet; in localities, people building houses for workers to rent, each household has a different price, electricity and water bills are collected quite arbitrarily without any management board to supervise.

Choosing to work abroad has been the main trend of Nghe An workers in recent years, affecting recruitment by local businesses. Photo: Nguyen Hai

Sharing the same view, Mr. Tran Phi Hung - Head of the Department of Employment and Labor Safety, Department of Labor, War Invalids and Social Affairs said: The PCI index on labor training mainly refers to the recruitment and use of labor. In recent years, enterprises in the province's industrial parks have needed a lot of labor.

However, these enterprises only recruit unskilled workers, female workers, some FDI enterprises also require knowledge of Chinese, so it is difficult to find workers to apply, because workers with expertise and foreign languages ​​must have gone to university or college. The problem is, enterprises want to recruit high-quality workers but do not want to spend money to connect and coordinate with vocational schools to teach language to workers.

The annual labor supply-demand connection between vocational training facilities and enterprises is organized by the Southeast Economic Zone in coordination with the provincial Department of Labor, Invalids and Social Affairs. Photo: Ng. Hai

Statistics of the Southeast Economic Zone show that in the 3 years from 2020 to 2022, enterprises in the Economic Zone recruited nearly 20,000 workers, but only 12 workers had college or university degrees, the rest were unskilled workers and female workers.

On the other hand, because the average income of workers in Nghe An is quite low (minimum wage in regions 3 and 4), it is also difficult to attract high-quality workers and skilled workers who are experts.

Workers participating in job connection in 2022 at VSIP Nghe An Industrial Park. Photo: Nguyen Hai

This is very different from the key provinces of industrial parks in the North and South, where businesses that need highly skilled workers and know foreign languages ​​proactively contact vocational schools for training from the third year onwards.

"The labor force of factories in industrial parks in Nghe An is almost left to the locality and vocational training facilities to survive. Therefore, each year, vocational schools in Nghe An train about 1,000 workers, but only about 30% of them work in the province, the rest are welcomed and invited to work by enterprises from other provinces," shared Dr. Ho Van Dam - Principal of Vietnam - Korea Industrial Technical College.

Signing of labor supply agreement between Vietnam - Korea Industrial Technical College and labor using units. Photo courtesy of Nghe An Newspaper

To improve this index, according to Mr. Dinh Van Phong - Head of Enterprise and Labor Management Department, Southeast Economic Zone, there is no other way but for businesses to improve and increase monthly income for workers; pay attention to social security and welfare regimes, build social housing, dormitories for workers and laborers; businesses with large, specialized labor needs need toStrengthening coordination with vocational schoolsto train resources and recruit...

Since the beginning of 2023, Nghe An has been approved by the Prime Minister to adjust the regional minimum wage for industrial parks in Vinh, Hung Nguyen and Nghi Loc from zone 3-4 (lowest) to zone 2. With the current trend of competition to attract workers, enterprises in industrial parks in our province will have to gradually increase income to attract quality workers; at the same time, if conditions permit, Nghe An will propose to raise the minimum income to zone 1. Hopefully, at that time, the labor training index in the province's annual PCI will be improved more firmly.

(Representative of the Department of Enterprise and Labor Management, Southeast Economic Zone shared)