CHAPTER 3: IMPLICATIONS AND SUGGESTIONS TO IMPROVE
3.2. Human Resource Challenges facing SMEs in Vietnam
Small and medium sized enterprises (SMEs) in Vietnam are the dominant form of enterprises and play an important role in creating jobs as well as increasing incomes for laborers. Every year, these businesses create more than 500,000 employees, employing up to 50% of social workers and contributing more than 40%
of the country's GDP. Owners of SMEs are often engineers or technicians who set up and operate their own businesses. They are managers and have direct involvement in production, so the level of expertise in business management is not high.
3.2.1. Human Resource Planning
At present, there are few SMEs planning human resources in the long run.
According to statistics, 85% of total enterprises forecast demand based on the number of employees to replace, only about 15% is based on changes in science, technology, demand In addition, the determination of surplus or shortage of labor is determined by each department based on the current workload rather than on the human resources.
Many Vietnamese SME owners also identify the need for human resources in the short term or even just in the present time to make decisions. Only companies with a size of 50-300 employees are interested in HR strategy, but these strategies are very sketchy. For the assessment of the implementation of the human resource plan and the projection for the next year's plan, the management of Vietnam in general and SMEs in particular is not yet considered.
3.2.2. Job analysis
Most Vietnamese SMEs are doing the job analysis, especially those with 50 employees or more. Each company has its own job description template, however, job analysis is only conducted when there is space in the enterprise. Vietnamese SMEs do not offer a procedure, or an evaluation of the work, but is conducted by an individual who is then approved by the department head and sent to the human resources department.
3.2.3. Recruitment and selection
For internal recruitment, when the recruitment is conducted, the organization - administration will notify the units in the system and other professional departments. Each department will consider among its member the individual who is capable of undertaking the work informed by the Organizing Board. However, because human resources at small and medium-sized enterprises are limited, the advantage for internal recruitment is insignificant.
For recruitment from outside, the recruitment through employment agencies is very modest. The sources from the training institutions and mass media playsan important role to ensure that the company recruited the right people to work. Mass media recruitment is mainly applied in enterprises with the size of 50 laborers or more, mostly via the internet, and newspapers. In fact, many SMEs, do not usually assess the effectiveness of the recruitment process after implementing the recruitment. Only about 35% the the SMEs conduct assessment of recruitment process.
3.3. Summary of research findings 3.3.1. Human resource planning
Human Resource Planning is required to understand the job vacancies that are available in the organization at any given point. According to DeCenzo and Robbins (2005), whenever the organisation is engaged in aprocess of determining its human resource needs, it becomes involved in a process calledHuman Resource Planning. Human Resource Planning is one of the most importantelements within a successful Human Resource Management Program, since it is a processby which the organisation ensures that it has the right number and kinds of people, who areat the right place, at the right time, capable of effectively and efficiently completing thosetasks that will help the organisation to achieve its overall strategic objectives.
Employmentplanning translates the organisation's overall goals into the number and types of workers thatare needed to meet those goals. Without clear-cut planning and direct linkage to theorganisation's strategic direction, estimations of an organisation's human resource needs arereduced to mere guesswork. Employment planning cannot exist in isolation it must be linkedto the organisation's overall strategy.
The survey data suggested that HR planning has not been carried out regularly at by SMEs in Vietnam. Specifically, only 4.5% of them reported that they do HRM planning to a great extent. Similarly, 11% of the firms only carry out HR planning to a large extent. The data also revealed that nearly 25% of the firms do not implement HR planning while more than 33% of those firm only do it to a small extent. The findings were in consistent with previous findings from survey of SMEs in Vietnam. According to Tram (2016) and Cuc (2016), at present, there are few SMEs planning human resources in the long run. According to statistics, 85%
of total enterprises forecast demand based on the number of employees to replace, only about 15% is based on changes in science, technology, demand In addition, the determination of surplus or shortage of labor is determined by each department based on the current workload rather than on the human resources. Many
Vietnamese SME owners also identify the need for human resources in the short term or even just in the present time to make decisions. Only companies with a size of 50-300 employees are interested in and set up a human resources strategy, but these strategies are very sketchy. For the assessment of the implementation of the human resource plan and the projection for the next year's plan, the management of Vietnam in general and SMEs in particular is not yet considered.
3.3.2. Job analysis
Survey data showed that in general job analysis was conducted quite regularly by the SMEs in Vietnam. The data showed that 50% of the firms reported that they conduct
job analysis at least to some extent. On the other hand, about half of the firm only conduct jpb analysis to a small or very small extent. A majority of the firms in the sample have job descriptions and job specifications for some positions at their companies. About 33% of the firms reported that they have job description and job specification for every position. On the other side, 14 of the surveyed companies indicated that they almost do not only have jobdescriptions and job specifications.
This came as a bit surprise because many of the firms did not carry out job analysis but job descriptions and job specifications are availble in many of the firms.
3.3.3. Sources of candidates
According to the data, only a small proportion of the firms consider current employees and ex-employees as a serious source for candidates. About half of the respondent firm answered that they only use current employee and ex-employees to a small or very small extent. The ultilization of various source of external candidates was also limited. As much as 70% of the surveyed companies reported that they use various source of external candidates to a small or very small extent.
Only 15% of the sample reported that they use various sources of external candidates to a great or large extent.
3.3.4. Use of preliminary screening
SMEs in Vietnam used application and CV screening as a popular method of selection. The data showed that application form screening has been used to at least some extent by 60% of the firms in the survey. About 45% of the surveyed firms, however, used resume screening as a way of selecting the applicants only to a small or very small extent. The use of screening not only save time but also hiring costs, this could be the reason for the popularity of the method among SMEs in Vietnam.
Telephone interview method was also familiar in the surveyed SMEs. The data sugested telephone interviews were even more popular among SMEs than CV and application screening. More than 13% of the surveyed firms used telephone screening to a great extent while nearly 20% of the firms used this method to a large extent. On the other hand, less than 10% of the firms used telephone interview to a very small extent.
3.3.5. Use of selection test
The data suggested that in general, the use of testing for selection by Vietnamese SMEs was quite limited. About 50% of the surveyed enterprises used IQ test and apptitude test to a very small extent while about only 26% of all firms ever used personality test during selection process. Regarding personality test, the data showed that only a few firms implement this type of test to a great extent.
Overall, about half of the respondents reported that they ever used such tests. Other half of the firms in the sample almost never used these tests. Survey results in Vietnam proved that personality testing is very unpopular in Vietnam as only about one-fourth of the firms have ever used the method for selection
3.3.6. Use of interviews
The data indicated that most of the companies in the survey used biographical interview method for selecting employees. Situational-based interview was not very popular among SMEs in Vietnam. However, there are about 37% of the firms used the method to some extent. However, about 42% of the firms used this method to a small or very small extent. On the reverse side, about 21% of the