Keywords

Vietnamese Textile and Garment Industry, Human Resource Development, Economic Integration.

Introduction

Overview of the Vietnamese Textile and Garment Industry

In the current trend of globalization and international integration, the world economy is moving from a simple labor economy to a technical and knowledge economy. High quality human resources have become one of the most important factors for developing not only the economy of the countries but also the enterprises.

According to the General Statistics Office 2018, The Vietnamese textile and garment industry is the key economic sector contributing the largest share of total export turnover, with a high average growth rate about 18% per year, it is the top five garment manufacturing countries in the world. However, it has some weaknesses such as low value added; mainly outsourcing for foreign countries so the profit margin is low about 5 to 8%. The main reason is that the current high quality human resource is weak; labor productivity is low; skill labors, design and management human resources have not been invested and trained.

Therefore the aim of this article is how to clarify the theoretical and practical issues of high quality human resources development. To analysis and evaluate the current situation of the Vietnam Textile and Garment industry. To highlight strengths and weaknesses in the development of high quality human resources in the sector, in order to propose solutions to the development of high quality human resources in the context international economic integration.

The development of the Vietnamese textile and garment industry in the period 2008-present is shown (Table 1 & Table 2) by the number of enterprises increased 4 times compared to 2008, in which the number of foreign invested enterprises also increased significantly. Labor force participation in the textile industry increased rapidly with the number increased more than 2.5 times compared to 2008. The investment capital for the renewal of equipment and technology of the sector also increased remarkably, reaching over VND95 trillion, up 4.9 times compared to 2008. In terms of industrial production value it is increased by more than 600%. In 2008, the sector's export value increased by more than 900%. By the end of 2018, Vietnam's textile and garment exports have been present in more than 60 countries and territories around the world.

Export value of the textile and garment industry in 2018 reached US $ 36.40 billion, up 4 times compared to 2008, with an average growth rate of 19.0% per year in the period 2008-2018, shown in Tables 3-6. In 2009, the growth rate was negative due to the global economic and financial crisis, but from 2010 until now, the textile and garment industry has regained its growth momentum with the growth rate of over 18%. The contribution of the textile and garment industry to the export value of the country is from 15-18% per year. The share of textile and garment exports has been consistently high at 9-12% per GDP, with the average annual contribution to GDP for 2008-2018 reaching 10.4% per year.

Current Status of Human Resources in Vietnam

The development of the Vietnamese textile and garment industry in the period 2008-present is shown by the number of enterprises increased 4 times compared to 2008, in which the number of foreign invested enterprises also increased significantly. Labor force participation in the textile industry increased rapidly with the number increased more than 2.5 times compared to 2008. The investment capital for the renewal of equipment and technology of the sector also increased remarkably, reaching over VND95 trillion, up 4.9 times compared to 2008. In terms of industrial production value increased by more than 600% In 2008, the sector's export value increased by more than 900%. By the end of 2018, Vietnam's textile and garment exports have been present in more than 60 countries and territories around the world.

Export value of the textile and garment industry in 2018 reached US $36.40 billion, up 4 times compared to 2008, with an average growth rate of 19.0% per year in the period 2008-2018. In 2009, the growth rate was negative due to the global economic and financial crisis, but from 2010 until now, the textile and garment industry has regained its growth momentum with the growth rate of over 18%.

The contribution of the textile and garment industry to the export value of the country is from 15-18% per year. The share of textile and garment exports has been consistently high at 9-12% per GDP, with the average annual contribution to GDP for 2008-2018 reaching 10.4% per year.

The Importance of Studying Human Resource Development

The industrial economy, the mass production process with a detailed separation of the intellectual and manual labor functions so the demand for High-Quality Human Resources is necessary in low level. In the knowledge economy nowadays, the production process is set up in the flexible model, requiring a labor force with high flexibility and creativity. Therefore, it is necessary to rapidly increase the number of qualified and skilled employees in order to develop High-Quality Human Resources.

The textile and garment industry also undergoes development stages:

i. The first stage, based on abundant natural resources (cotton, silk), low-cost labor with mass production, processing with low value-added products. The development of textile and garment industry in this period mainly developed in width. During this period, Enterprise use semi-automatic labor technology, low-skilled labor.

ii. In the industrialization period, the textile and garment industry develops thanks to the accumulated capital of the first stage and based on the technological development of the textile and garment industry. This period strongly developed intermediate industries and manufacturing chains with high flexibility and increasing automation level. The demand for semi-skilled and highly skilled labor force, managerial labor and professional labor is increasing, but labor costs are also increasing.

iii. The stage of applying the achievements of the knowledge economy, competitiveness thanks to the high technology capability (invention, application) and skilled human resources development. The demand for High-Quality Human Resources has increased sharply, focusing on human resources capable of researching and developing new products, human resources for designing, labor with many skills, and knowledge of the market.

Literature Review

Human resources and human resources development have been widely studied by a number of international scientists. According to Nadler (1984), Srivastava (1997), Human resources include the physical skill, intellectual skill and occupational skills for the individual. Human resources are understood as the most important factor for the production process of enterprises.

Stanton-Salazar & Dornbusch (1995) argues that, human resources is the all qualification accumulated by people. It can make income in the future. Zhao & Zhen (2006), focus on innovation and productivity of China Textile Industry.

Among the authors studying human resource and human resources development, Swanson & Holton III (2009) is the best representative. It has shown the importance of developing human resources for enterprises and development.

Saner (2001) based on Michel Porter's competitive theory, has put the high quality human resource being the top element in effective competition in business.

Sleezer & Denny (2004) focus on improving human performance and developing human resources. It emphasizes the importance of considering different strategies that can develop a skilled workforce in the future.

The literature on high skilled human resources in the world is concerned with issues of moving, changing, market, supply chain, or productivity and labor productivity or research on the status of human resources of a nation. Typical as “The Skill Development Landscape in India and Implementation of Quality Skills Training” by The FICCI - ICRA Management Consulting Services Limited (2010). This document helped to set the context in India, the current initiatives underway, challenges faced in skilling at a macro level as well as during implementation, and the way ahead.

For the case of Vietnam, Vu (2012) analyzed the importance of developing high quality human resources for socio-economic development in a country and for enterprises. However, this article is only at level for a journal article research.

Trung & Dung (2012), shown that some issues for developing high quality human resources in our country today. The article discusses the imbalance between supply and demand, the situation of High-Quality Human Resources still lacking and weak, the issue of human resources allocation among regions, regions, and the issue of state management of High-Quality Human Resources. The study proposes major solutions focusing on training and completing the system of human resources development policies.

Thu (2008) shows that developing a model of sustainable linkage between training institutions and textile enterprises in the trend of WTO integration. Research refers to the quality of human resources of the Vietnamese Textile and Garment industry, the scale of number of employees in enterprises. However, the research only stopped at the level of proposing solutions orientation way, but not yet having specific solutions for the development of human resources through training.

Research Methodology and Data

Research Model of the Study

There are many different models of human resource development, such as the Model of Human Resource Development, by McLagan (1989); The Skills Development Model, by Overtoom (2000); the Human Resource Development Model, by Ravand (2014) etc. However, this study chose the human resource development model of Swanson & Holton III (2009) for the research model of this paper because the model has proved human resource as the most important factor of a company. It also has analyzed of business production chains from input to output. In particular, processes put into the human resource development hypothesis. Therefore, the model is appropriate and high reliable as a conceptual framework for analysis and research on human resource, as well as recommend solutions to develop the textile and garment industry.

Within the limits of the study, the paper focuses on analyzing and evaluating the development of high quality human resources in the textile and garment industry, examining socio-economic factors, international economic integration, policies and overall strategy of the State. In addition, the article also analyzes the internal factors affecting the development of high quality human resources in the textile industry. Thus, the research model of the study is as follows (Figure 1):

Figure 1 The High Quality Human Resource Development Model

Research Method

The research used qualitative research method, in which the combination of the following main methods: Statistic methods, survey textile and garment companies, and in-depth interviews expert method.

Data Collection

Statistic methods

Secondary statistics used in the research were collected from the General Statistics Office (GSO), Vietnam Textile and Garment Association (VITAS), Vietnam National Textile and Garment Group (VINATEX), General Department of Customs. Besides, Data is used from reports of international organizations such as World Bank and ILO.

? Survey: Survey on human resource of 104 companies the textile and garment industry.

? In-depth interviews expert method: In-depth interviews 20 senior leaders and experts in the textile and garment industry with the questionnaire.

Results

In Tables 7a & 7b, summary of survey on human resource of 104 textile and garment companies are represented by considering various factors such as local, kind of company, capital, revenue, human resource, productivity, qualification, salary & income, training recruitment of those companies (Tables 8-11).

Evaluation of Human Resources in Textile & Garment Industry (by SWOT Matrix)

Strengths

The labor force involved in the production of the textile and garment industry has increased significantly in terms of quantity, fivefold compare to 2008. The strength of the human resources in Vietnam's textile and garment industry is labor Abundant, easy to train, young working age, industrious, skillful is regarded as one of the factors that create competitive advantage of Vietnam textile and garment industry in recent years. In the period from 2008 to 2018, the quality of human resources of the entire sector improved, if the proportion of trained workers in 2008 reached only 14.9% by 2018 this rate was 20% higher in the industry.

Labor force divided by professional qualification in which the proportion of workers with professional qualifications accounts for 21.1%, higher than the national average 16.6% and higher than the average of the manufacturing industry at the rate of 16.8%. The labor force working in the textile and garment industry accounted for 39.7%. Industry players have also been more active in investing in human resources related to the textile sector such as fabric and printing and garment sectors such as product design and marketing. Some enterprises, especially enterprises in the Textile Group (Vinatex) have introduced many preferential policies in training as well as attracting and using highly qualified human resources, creating favorable conditions. In pursuit of the strategic objectives of the development of the textile and garment industry.

Weak points

Most of the workforce engaged in textile manufacturing comes from rural areas of the country; Education, technical expertise as well as skills necessary for industrial production are not well-equipped. The quality of trained labor does not meet the technical requirements of the industry; English proficiency in the workforce only accounts for 0.28%, compare to the country is 2.5%.

The health of workers in the textile industry is average. Employee perceptions of apprenticeship and skill change are slowly changing. Many workers, however, have weak skills but are afraid to learn how to improve their skills. Some training institutions, with the exception of training institutions, focus on expanding the number of courses so that the conditions of training conditions are not commensurate with the size and level of training, especially the teacher’s quality.

The quality of human resources with high qualifications of the sector is still limited; the rate of trained workers in colleges and universities is only 4.67%, while the national rate of 7.85%. It is noteworthy that when the number of small enterprises in the industry increased rapidly in the past decade, the rate of technical workers decreased, technical workers from 11.05% to 8.82%, College degree from 5.15% down to 4.61%. Small and weak business size, low labor productivity and low investment efficiency. Unbalanced distribution between the textile sector (garment industry) and the apparel sector; between raw material supply and consumption area; between the main manpower supply zone and the human resource area.

The supporting industry for the garment industry has not developed yet. The number of trained employees in each year has increased, but the quality of the workforce is still seriously lacking in enterprises in the sector, especially the technical and managerial workforce, design, marketing etc. The supply of human resources for enterprises in the industry are inadequate is the ability to meet the human resources in place; especially high quality human resources are low.

Opportunities

Viet Nam is a potential domestic market of more than 90 million people; The exchanging of technology, equipment and management skills become easier in The integration trend; The moving of labour between countries and regions is stronger, helping to develop and attract investment and cooperation in education and training in order to develop high quality human resources; Government and businesses are increasingly interested in and investing more in the development of high quality human resources.

Threats

Competition for attract high-quality human resources among enterprises, sectors and countries is becoming more fierce; Labour costs of Vietnam and the textile industry are rising rapidly; Legal are becoming more and more tight; Developing high quality human resources take a lot of time and costs.

Human Resource Development of the Vietnamese Textile and Garment Industry in the Context of Integration

Forecast growth of the textile industry until 2025 is represented in Figure 2.

Figure 2 Forecast of Export Value of Textile and Garment Industry to 2025 (Bil USD / Year)

With the growth rate of labor productivity in the textile and garment industry in the last 10 years of 2008-2018 is 5.6% per year, it is possible to forecast the demand for human resources in textile and garment industry as follows:

According to the McKinsey Global Institute (MGI), in order to maintain the current economic growth, Vietnam needs to reach productivity growth of 1.5 times, means from 5.6% to 8.4% per year. Therefore, total labor demand for each period will decrease by 3%, but the demand for labor for technical workers, technicians will increase double and trained labor demand in textile and garment industry must reach 60%.

Solutions for human resources development in the textile and garment industry

In order to effectively and successfully integrate into the textile and garment industry, Vietnam needs to deploy quickly and synchronously the following solutions:

Establishment of value-added supply chain of Vietnam's textile and apparel industry

Design --> Production of raw materials --> Garment --> Export --> Marketing and Distribution

First, focus on the supply of raw materials, materials, processing and export ... and that is the direction is feasible and reasonable in the present. The textile and garment industry must develop a strategy on raw material areas, strategies on investing in technical advances, designing specific product designs, and building new thinking on product consumption. Switching from manufacturing (mainly importing raw materials) into the production of products from start to finish and marketing, OEM- Original Equipment Manufacture model.

Vietnam's textile and garment industry needs to step by step strengthen the vertical linkages at the regional and national level following the OBM-Organizational Behavior Management model. Establishment of domestic supply chain gradually involved in the regional and global textile value chain. By buying and selling associates of businesses into a corporation with a common ownership background, it can be intertwined between the garment company and the dyeing company, or the distribution companies involved in the sale. Well-known brands in the market to own or have a license between the garment company and the company that owns the brand. From the sector restructuring on in the value chain, it will guide the development of human resource development strategies.

Develop a program for human resource development for the sector

The demand for human resources needed to supplement the activities of the textile and garment industry will increase in the coming years. Therefore, the Ministry of Industry and Trade (MOIT) needs to develop the human resource development program. The strength of the textile industry is both the demand for quantity and the demand for qualified human resources. The human resource development program must have the participation of the Vietnam Textile and Apparel Association and Vinatex in order to be able to come up with programs that are relevant to the reality of the business. To step by step build and perfect the mechanism of labor supply and demand with transfer of skilled subjects.

Forming and developing the science and technology market and the university and college training market. Collaboration between sectors and training institutions in providing information for forecasting training needs and providing high quality human resources. Review the capacity of local training: quantity, level, industry ... assesses the level of response and the number of deficits needs to supplement training from outside.

The textile and garment industry needs to innovate in the training and use of human resources

Improve the quality of human resource training institutions, renovate training programs and adopt policies for highly qualified human resources such as fashion design, planning, marketing, especially for the leading experts in the field of executive management, production management.

With the status of human resources training is both weak and little as today, especially professional technical workers such as sample design, fashion, design production line, international market management... It is duty of MOIT, the Textile and Apparel Association, Vinatex and enterprises…, therefore, it is necessary to have policies to invest in development and to attract skilled and professional labor force to participate in production and business activities.

Specific solutions for training and using human resources are proposed as follows:

Develop the system of training institutions

The Vietnam Textile and Apparel Association should organize a survey on the labor structure, labor training process in enterprises in the textile and garment industry in order to set criteria for training well. The selection criteria of enterprises is the research base for the training units (universities, colleges, vocational schools, etc.) to provide appropriate training for enterprises preparing for Demands human resources sector.

The textile and garment industry needs to strongly develop a network of vocational schools to ensure that the scale, industry structure and level of training are closely linked to the development plans of sectors and localities. To invest in the construction and modernization of a number of job-training schools, technical colleges and technical universities, some advanced vocational schools in the planned garment clusters such as Pho Noi-Hung Yen, Nam Dan, Hue, Tay Nguyen, Binh An - Binh Duong. In the period of 2014-2020 and 2020-2025, priority should be given to the development of quality human resources in marketing, marketing, design and production line management to supply the industry.

Implementation of training link strategy

Establish linkages between vocational training units between local schools and the textile and apparel industry schools (Vinatex Technological and Economic College Ho Chi Minh City, Nguyen Tat Thanh College, College of Industry-Textile and Fashion Hanoi ...) with universities, colleges, vocational schools, ... in the big localities such as Ho Chi Minh City, Hanoi, Da Nang, Hue ... From there, there are plans for address training and in accordance with the standards set by the business such as design engineer, production manager, information technology, computer technician, Language, management, intermediate level to train the students and skilled workers to meet the requirements of the industry. Implement models of businesses that trainees practice towards the implementation of legal advice and services between employees and businesses.

In the program of linking vocational training under short-term and long-term plans, training institutions must regularly develop some strategic and sustainable vocational training programs, training units on the one hand. Promote job training. On the other hand, combining to improve the educational level for laborers to expand vocational training with the orientation to strive to meet about 40% of skilled labor for enterprises in the industry in the coming years.

The textile and garment industry in which representatives of the Vietnam Textile and Apparel Association and MOIT should sign cooperation programs with localities attracting investment such as Hung Yen, Nam Dan, Hue, Tay Nguyen, Binh Duong. Through the cooperation program, the human resources will be paid attention; especially in the cities are scarcities of labor for sewing. The industry is favorable for laborers to cover the cost of vocational training; in the immediate future, the training program will be implemented in two phases; Phase 1: trainees will be trained in the local area, Phase 2: MOIT cooperates with enterprises to continue training and selection if workers meet requirements. Especially, there are specialized programs to train the key personnel such as human resource managers, factory managers, chiefs and leaders of enterprises in the Vietnam Textile and Garment Group, for small and medium enterprises in the localities. Strengthening and encouraging the teaching and learning of foreign languages for the workforce mainly in English, Chinese, Japanese, Korean, etc.

To carry out training programs in a number of specialties which are currently not available in the country or have not yet been capable of training, using specialists or foreign technical laborers such as designing production lines, designing fibers Link with universities in the region and internationally to attract foreign resources (capital, technology, teaching methods, etc.) to the human resources development of the industry. Attract and encourage investment in the field of human resource development. To establish a center for expert brokerage, encouragement, support and facilitation to promote the development of relations and cooperation between Vietnamese enterprises and countries in human resource development. To speed up the training of technical workers to increase by 6.0-8.0% per year in the 2011-2020 period.

To attract and employ highly skilled and technical personnel

Actually in the industry, there are many trained people with high professional qualifications. However, when graduating, they are transferred to foreign companies or transferred due to lack of transparent treatment policy. Education sector, low income, unstable life, the environment to promote bad talent. Therefore, it is necessary to:

(i) Attract the most knowledgeable and specialized subjects in the areas of need, proceeding to apply the method of attraction according to job titles, specific positions or contracts ; At the same time, proactively approach and call for human resources,

(ii) Both physical and mental wellbeing commensurate with their contribution to attract,

(iii) Change of human resources development mechanism and policies

(iv) Develop a strategy for importing highly skilled labor to compensate for the shortage of skilled labor that the industry has not sufficiently trained.

Investment capital for human resource development

Investment capital is one of the important factors to ensure the human resource development of the textile and garment industry. At present, the Government also has policies to support the development of human resources of the sector through Circular No. 32/2010/TT-BTC, whereby for short-term training courses, the State budget shall support a maximum of VND 250,000/Student/year. Long-term classes will be supported up to 2.8 million VND per student per year. For foreign training, businesses and trainers are responsible for contributing funds. The program is applicable to the following subjects: management officers, legal officers, sales staff, technical staff specialized in textile and garment at enterprises, associations and textile groups; Workers are working in garment and textile enterprises and students graduated from universities, colleges, secondary schools, upper secondary schools and lower secondary schools.

In addition to government funding, enterprises need to increase the current rate of training fees from 2% to 3% now to 5-7% of total costs to maintain and grow. Human resources in both quantity and quality, so the industry can access markets rapidly in future.

Conclusion

Intensive international economic integration is becoming increasingly indispensable trend of the times, an opportunity and challenge for textile and garment enterprises. Therefore, the textile and garment industry must pay attention to the development of human resources in both quantity and quality.

The Vietnamese textile and garment industry needs to move from competition based on the low labor price advantage to competition with added value and innovation in service quality. In fact, Vietnam's garment enterprises are lacking in international competition, Vietnam should soon have a policy to support, encourage, attract and train managers, businessmen and designers, technical workers for the industry. The textile and garment industry need to strengthen cooperation with foreign companies in order to learn management experiences, transfer modern technologies, international marketing experience, and organize production management.

Step by step innovate technology, accumulate financial resources, and prepare the necessary conditions to implement the stages with higher value added in the global textile supply chain. So in the long time, direct exports must become the main export method of the Vietnamese textile and garment enterprises.

References

1. McLagan, P. A. (1989). Models for HRD practice. Training & Development Journal, 43(9), 49-60.
2. Nadler, L. (1984). The handbook of human resource development. John Wiley & Sons.
3. Overtoom, C. (2000). Employability skills: An update. ERIC Clearinghouse.
4. Ravand, M. (2014). Human Resource Professionalism: A Panacea for Public Organizations. Author House.
5. Saner, R. (2001). Competitive Advantage & Quality of Human Resources. Geneva: Center for Socio?Eco-Nomic Development.
6. Sleezer, C.M., & Denny, D. (2004). Strategies for developing a high?skilled workforce. Performance Improvement Quarterly, 17(1), 41-55.
7. Srivastava, M.P. (1997). Human Resource Planning: Approaches, Needs Assessment and Priorities in Manpower Planning. Institute of Applied Manpower Research.
8. Stanton-Salazar, R.D., & Dornbusch, S.M. (1995). Social capital and the reproduction of inequality: Information networks among Mexican-origin high school students. Sociology of Education, 116-135.
9. Swanson, R.A., & Holton III, E.F. (2009). Theory of human resource development. Foundations of Human Resource Development, 2, 97-111.
10. The FICCI - ICRA Management Consulting Services Limited (2010), The Skill Development Landscape in India and Implementation of Quality Skills Training. Retrieved from http://ficci.in/SPdocument/20073/IMaCS.pdf
11. Thu, N.T.B (2008), Training human resources for Vietnamese Textile and Garment industry to be competitive when being a WTO member.
12. Trung, P.Q., & Dung, D.Q. (2012), Issues for developing high-quality human resources in our country today, Political - Truth Publishing House, Hanoi.
13. Vu, V.P. (2012), Development of high quality human resources in state enterprises - Current situation and solutions, Communist Magazine, National Political-Truth Publishing, Hanoi.
14. Zhao, Y., & Zhen, F. (2006). Innovation and productivity of China Textile Industry.