INTERNATIONAL CONFERENCE: DEVELOPMENT OF SMALL AND MEDIUM ENTERPRISES IN VIETNAM IN THE CONTEXT OF INDUSTRIAL REVOLUTION 4.0 LABOR AND EMPLOYMENT IN SMALL AND MEDIUM ENTERPRISES IN VAN LAM DISTRICT, HUNG YEN PROVINCE Dao Van Tu and Pham Minh Duc, University of Finance and Business Administration, Vietnam Abstract: The number of small and medium enterprises in Van Lam district, Hung Yen province have recently increased rapidly Accordingly, the labor force has increased and there are many shortcomings and difficulties for enterprises in human resource management The paper focuses on studying the situation of labor, labor structure, labor qualification, consciousness, labor discipline, clearly indicating the causes of these shortcomings; Based on the results of the analysis the article offers some solutions to improve the efficiency of labor use, improve business efficiency for SMEs in Van Lam district, Hung Yen province Key words: Small and medium enterprises, labor situation, employment Introduction Van Lam is a district in Hung Yen province, bordering on Gia Lam district, Hanoi city has the process of rapid industrialization The number of enterprises has increased rapidly, they have operated in many fields Most of them are small and medium-sized enterprises (SMEs) accounted for 98.5% These SMEs have played an increasingly important role in local economic development However, in the process of developing enterprises, there are still many problems and shortcomings, making the quality and efficiency of operations not high Among them, labor is one of the most influential factors, the content of the paper will focus on the actual situation of labor and employment of SMEs in Van Lam district Actual situation of labor and employment of SMEs in Van Lam district 2.1 Number of SMEs in Van Lam district Table 1: Number of SMEs by administrative units of district administrative units of district 2016 2017 number of SMEs % number of SMEs 2018 % number of SMEs % Nhu Quynh town 203 27.0 245 29.06 252 26.89 Trung Trac commune 113 15.0 121 14.35 136 14.51 62 HỘI THẢO QUỐC TẾ: PHÁT TRIỂN DOANH NGHIỆP NHỎ VÀ VỪA CỦA VIỆT NAM TRONG BỐI CẢNH CUỘC CÁCH MẠNG CÔNG NGHIỆP 4.0 Tan Quang commune 88 11.7 97 11.51 112 11.95 Lac Dao commune 78 10.4 81 9.61 93 9.93 Dinh Du commune 71 9.5 86 10.20 95 10.14 Lac Hong commune 46 6.1 55 6.52 67 7.15 Chi Dao commune 45 6.0 45 5.34 51 5.44 Dai Dong commune 42 5.6 45 5.34 52 5.55 Minh Hai commune 42 5.6 43 5.10 47 5.02 10 Luong Tai commune 16 2.1 17 2.02 21 2.24 11 Viet Hung commune 0.9 0.95 11 1.17 751 100% Total 843 100% 937 100% Source: Van Lam Tax Department The North of Van Lam district borders on Hanoi capital and Bac Ninh province; Road No5 also passes through this district, which affects the distribution of SMEs in the area The number of enterprises is not evenly distributed in the administrative units of the district, the enterprises are most concentrated in Nhu Quynh town, the economic and commercial center of the district accounts for over 25%, the followings are Trung Trac commune, Tan Quang and Dinh Du communes; Viet Hung commune is ranked last The number of enterprises concentrated along Road No5, industrial zones and trade villages, Nhu Quynh commune has Nhu Quynh industrial zone, Minh Khai commune has trade village, Tan Quang commune has Tan Quang industrial zone (Table 1) Table 2: Number of SMEs classified by number of employees 2016 Number of employees of the enterprise employ ees 2017 % employe es 2018 % emplo yees % Less than 10 employees 406 54.10 478 56.70 534 56.99 From 10 to 19 employees 236 31.40 247 29.30 261 27.85 From 20 to 49 employees 83 11.10 87 10.32 96 10.25 From 50 to 100 employees 21 2.80 25 2.97 37 3.95 Over 100 employees 0.50 0.71 0.96 Total 751 100 843 100 937 100 Source: Van Lam Tax Department Enterprises employing less than 10 employees account for over 55%, enterprises employing from 10 to 19 employees account for from 27% to 31% These two groups account 63 INTERNATIONAL CONFERENCE: DEVELOPMENT OF SMALL AND MEDIUM ENTERPRISES IN VIETNAM IN THE CONTEXT OF INDUSTRIAL REVOLUTION 4.0 for over 80% of the number of SMEs in Van Lam district The number of SMEs employing over 100 employees accounts for a very small proportion 2.2 Actual situation of labor and employment of SMEs in Van Lam district The paper is based on the actual research at 125 enterprises with the number of employees from 15 people or more, belonging to many sectors, in the communes in Van Lam district (the total number of employees at the end of 2018 is 6406 employees) The research shows the labor status in enterprises as follows: Firstly, A large number of workers in SMEs are not residents of Van Lam district (accounting for over 80%), mainly from the provinces of Son La, Phu Tho, Bac Giang, etc most of which are ethnic minorities This has a great impact on the efficiency of human resource management and business performance of businesses They are unskilled workers with educational level from high school or lower, a large number of laborers are young employees According to the data in Table 3, the number of employees aged 35 and under accounts for about 83% Table 3: Labor structure of SMEs in Van Lam district by age and household registration in 2018 Criteria Age Permanent residence Total Amount Ratio 17-25 years old 3185 49.72% 26-35 years old 2171 33.89% 36-50 years old 876 13.67% >50 years old 174 2.72% From Van Lam district 1192 18.61% From other places 5214 81.39% 6406 100% (Source: summary of survey) Regarding labor structure by gender, the proportion of men and women is approximately 50% In industry and construction, men account for a higher proportion than momen (over 70%), while in trade and services, women account for a higher proportion than men (over 80%) Secondly, the situation of workers quitting, skipping and being sacked in small and medium enterprises takes place regularly, especially after the Lunar new year every year Returning home to celebrate the Lunar new year , leaving the company to work in other places, jumping to other businesses for better compensation, According to a survey data, up to 78% of businesses think that the phenomenon of job severance in labor is frequent; 20% of businesses have little severance status, only 2% have very little job severance The situation of the laborers entering and leaving the enterprises is very popular, which has caused shortage of laborers and difficult recruitment for many years Therefore, businesses often need to recruit more, most businesses have to recruit workers for the whole year, 72% of businesses say that they recruit regularly during the year, 15% of businesses recruits once a quarter, 9.1% of businesses recruits twice a year, 3.9% of businesses recruits once a year 64 HỘI THẢO QUỐC TẾ: PHÁT TRIỂN DOANH NGHIỆP NHỎ VÀ VỪA CỦA VIỆT NAM TRONG BỐI CẢNH CUỘC CÁCH MẠNG CÔNG NGHIỆP 4.0 Thirdly, the education and qualification of the laborers are low Many of them are from other provinces, especially from mountainous areas Most of the workers in SMEs have low education, many have not graduated from high school The training activities of enterprises are still poor, not conducted properly They can only provide training in the form of mentoring, guidance, and only carried out in the probationary period Table 4: Labor structure in the SMEs in Van Lam District by qualification in 2018 Criteria unit Manufacturing Construction Trade - Services Number of employees Employ Average / enterprise ees 67.7 29.8 27.5 High school and lower % 67.3 65.3 56.5 Vocational school , college % 24.2 26 29.5 University degree and post graduate % 8.5 8.7 14 (Source: summary of survey) Fourthly: Accommodation of the workers is still a problem About 70-80% of the labor force is living in rented rooms and houses They come from very remote and mountainous provinces The rented rooms are in bad condition which are scattered in residential areas adjacent to industrial zones They are built and leased by local residents at low prices The security is not very good Most enterprises not have houses for their workers Fifthly: The management apparatus of SMEs in Van Lam district is simple, unorganized and lack of cohesion leading to inefficiency in leading and operating businesses Most enterprises not have an independent department of human resource management or there is usually only one person in the department and he has to a lot of work More than 80% of human resource positions are assigned directly without official appointments For enterprises with a labor force of less than 30 employees, the human resource management is conducted directly by the director, deputy directors, accounting department, or workshop managers Sixthly: Human resource management is still limited: + Most enterprises (90%) make demand estimates based on the number of employees that need to be replaced, only about 10% based on changes in science, technology, demand for products and services, capital, and future development trends When a worker leaves the job, he will be replaced by another, immediately the recruitment will be deployed or planned to be implemented under the direction of the business owner for the department of human resource management or to issue a direct notice in the newspaper or at the gate of the business + Corporate governance activities are mostly directives that have not been documented Many enterprises have no specific working regulations, regulations on wages and bonuses or regulations on economic responsibility, and the discipline of the business is quite loose The leadership and management are mainly based on sentiment, spontaneity Oral direction instead of 65 INTERNATIONAL CONFERENCE: DEVELOPMENT OF SMALL AND MEDIUM ENTERPRISES IN VIETNAM IN THE CONTEXT OF INDUSTRIAL REVOLUTION 4.0 documents causes the situation of neglect of work, debate about responsibility when there are mistakes in work + The evaluation of work is limited, just covering the time of attendance, controlling the time of entry and exit, monitoring the consciousness of employees when taking leave with and without permission, etc the quality of work has not been evaluated, there are no specific criteria for evaluation Most enterprises just evaluate labor by month and by year This activity is for the payment of monthly salary and the "13th month salary" before the Lunar New Year The number of enterprises that not evaluate the work accounts for 5.6%, the enterprises evaluate the work by week account for 10%, the rest evaluate the work by month and by year + Management capability and style of business owners are still backward Management style is very authoritarian and small Sometimes the workers are shouted with vulgar words which causes very negative psychology to the workers Causes of the above situation - The viewpoints of many small business owners on the role of workers are not adequate They think that the main factor creating profits for businesses is not employees but employers, due to the employer's good relationship with the government and local authorities The good ability of relationship will determine the development of the business - Administration is based on experience Small enterprises are developed from small merchants who have low education In general, knowledge of business management and human management are not well-trained, mainly based on personal experience Most business owners who cannot afford to take full-time classes Even short-term courses are not considered - Material benefits not meet the needs of the workers Their wages are low resulting in hard life, especially for the workers renting accommodation, it can be said that "sweating is out of money" The salary for an employee mostly ranges from VND 3,000,000 per month to less than VND 7,000.000 per month The percentage of enterprises paying from VND 3,000,000 to VND 4,000,000 per month accounts for 41.8%, the enterprises paying from VND 4,000,000 to VND 7,000,000 accounts for 40.2% and the enterprises paying over VND ,000,000 accounts for a low rate (6.2%) Year-end bonuses (before the Lunar New Year) are always concerned by the businesses (97%) and they are usually equal to one month's salary, so it is also known as the 13th month salary - The working mentality is still unstable, especially for young laborers When getting better opportunities from other enterprises, they are ready to move Their education is still low They haven‘t been trained, sense of responsibility, attitude of working is very poor; Awareness for the profession and the work is very simple and limited - Local training activities have not yet been paid attention to, funding for training is very low Most small enterprises have a small number of employees, so the organization of vocational training courses and qualifications are very limited Moreover, the business owners not want to spend money on training workers Some solutions to improve the quality of labor for SMEs in Van Lam district, Hung Yen province For enterprises: - Managers and business owners need to have a proper view of the role of human resource in general and laborers in particular in improving labor productivity, increasing profit 66 HỘI THẢO QUỐC TẾ: PHÁT TRIỂN DOANH NGHIỆP NHỎ VÀ VỪA CỦA VIỆT NAM TRONG BỐI CẢNH CUỘC CÁCH MẠNG CÔNG NGHIỆP 4.0 and the sustainable development of the enterprise In the viewpoint of management scientists whose school aimed at human being, in the long term, the determinant of the existence of the business is the laborer Managers in Vietnamese small enterprises should learn from small enterprises of Japan - the country has many similarities with Vietnam In the viewpoint of Japanese small enterprises, the human factor decides to turn a small enterprise into a large corporation, the factor brings strong and sustainable development - There should be good policies to attract and use laborers For the leadership, from the deputy head of the departments or higher, it is necessary to have stability and policies to attract and retain the contingent of administrators In the current condition, the living standard of Vietnamese people is still low, the policy of economic encouragement is still very effective - Taking care of the laborers who are from remote and mountainous provinces, focusing on training, encouragement, housing issues, etc Enterprises need to build reasonable wage policies in the direction of having a strong decentralization of wages Capable laborers must have a high salary and vice versa, and they take clear regulations of authority and responsibility No matter how small the enterprise is, it is necessary to have a complete salary, bonus and working regulation and be implemented in a sufficient, open and fair manner There should be a reasonable salary to ensure a living standard, especially for young employees After one year of work, the employee can see the income results or may accrue a part of the income For universities and colleges in Van Lam district: - Needing training according to the requirements of the labor market, renovating and expanding the types of training to meet the needs of enterprises, especially SMEs It is also necessary to open short-term training courses from to months,etc in the trend of practical training They should train just the knowledge and skill for the work, cutting off unnecessary content Training courses can be conducted at the business in the evenings, on Saturdays or Sundays - Coordinating with local authorities to exploit the financial solutions from the Government to support SMEs in the labor training effectively - It is necessary to build a close relationship between universities, colleges and the enterprises in the district in training and retraining activities; job placement for students; in training and practicing for students; providing qualified laborers for enterprises For the local government: - Promoting the propagation and education of laborers: The state agencies of the district, the communication agencies need to have programs and activities to educate laborers (employees), especially the employees coming from other provinces and mountainous provinces about employees' sense of responsibility for enterprises, localities, and society This makes employees work voluntarily and responsibly This should be done by the communication agencies of the district and communes, and the system of the labor union and the youth union - The authorities of the district should establish an interdisciplinary organization in charge of helping SMEs develop The focus is on human resources, the laborers from mountainous provinces such as Son La, Lai Chau, Dien Bien, etc The intellectual level is much 67 INTERNATIONAL CONFERENCE: DEVELOPMENT OF SMALL AND MEDIUM ENTERPRISES IN VIETNAM IN THE CONTEXT OF INDUSTRIAL REVOLUTION 4.0 lower than that of the local people Rented housing, social evils, poor sense of labor, are issues that cause many difficulties for enterprises, and need the help from the local authorities - Combining and supporting enterprises in sustainable human resource training and development Organize training courses on "Industrial manners" for the employees to raise awareness and help employees understand the importance and necessity of industrial manners in working environment towards professionalism of the labor force - Ensuring security for laborers in the district Most workers have to rent houses of the local people Therefore, the situation of security, social order and safety, social evils in residential quarters of workers still poses many risks The The Labor Union should propagate and disseminate laws, capture the thoughts and aspirations of workers and solve urgent problems of workers Conclusion Small and medium-sized enterprises in Van Lam district, Hung Yen province have increased rapidly in recent years A reality is that labor and employment in SMEs is still limited and weak The majority of workers have low education and qualifications and a weak sense of labor discipline; low labor productivity The reason is that many workers from remote and mountainous provinces, young workers have not received professional training; housing issues of workers is still difficult, management qualifications of business owners are poor; From analysis of the current situation of labor and employment in SMEs in Van Lam district The paper has proposed a number of solutions for the businesses, local authorities, universities and colleges in the locality to improve labor efficiency and production efficiency, business operation and sustainable development of small and medium enterprises in the district REFERENCES 68 Human resource management in SMEs in Van Lam district: Situation and solutions, grassroots level projects, University of Finance - Business Administration, 2017, code: 02.17.02; Proceedings of Scientific Conference (2017): Actual situation of human resource management in SMEs in Van Lam district: Situation and solutions ‖, Department of Business Administration, University of Finance and Business Administration, June 14, 2017 Van Lam Tax Department, (2018), Situation of enterprises in Van Lam district from 20162018 Le Nguyen Duy Oanh, (2013), Small and medium enterprises need more support, www.hids.hochiminhcity.gov.vn Nguyen Ngoc Thang "Enhancing the management capacity of small and medium-sized enterprises", economic magazine and forecast No 17, September 2012 ... Conclusion Small and medium- sized enterprises in Van Lam district, Hung Yen province have increased rapidly in recent years A reality is that labor and employment in SMEs is still limited and weak... district in training and retraining activities; job placement for students; in training and practicing for students; providing qualified laborers for enterprises For the local government: - Promoting... authorities - Combining and supporting enterprises in sustainable human resource training and development Organize training courses on "Industrial manners" for the employees to raise awareness and help