Recruitment Companies Face Challenges in Meeting Targets

Estrala, a prominent recruitment company based in Ho Chi Minh City, is struggling to meet its recruitment target for the year, a situation echoed by many businesses, according to Nguyen The Dai, its Deputy CEO.

For years, large companies like Estrala have partnered with local government agencies to recruit guest workers for Japan, allowing them to reduce costs. However, in recent years, many newly established intermediary firms without labor export licenses have been ramping up recruitment by paying high fees to brokers, making it difficult for traditional recruitment firms to compete.

The Role of Illegal Intermediaries

Duong Thi Thu Cuc, CEO of Saigon Intergo, highlighted that recruitment firms like hers now have to "buy" candidates from intermediary firms for up to VND30 million (US$1,200) per person. Companies with no expertise in labor recruitment are cornering the market, she lamented. The government has acknowledged the issue, with Deputy Minister of Labor, Invalids and Social Affairs Nguyen Ba Hoan stating that while the number of Vietnamese workers going abroad has increased overall, major recruitment firms are sending fewer of them compared to previous years.

Illegal intermediaries promise workers a speedy process and high salaries, only to sell them to traditional recruitment firms, Hoan explained. Japan has long been a top destination for Vietnamese guest workers, with 48% of 130,600 overseas workers heading for Japan in the first 10 months, according to official data. However, the weakening yen and Japan’s increasing inflation have made workers feel less enticed to work there, as the cash they send home is not as valuable as before.

The Shift in Worker Preferences

Pham Viet Vuong, director of a Japanese language center for workers, noted that certain factors are contributing to a decline in the number of workers going for Japan. Increasing costs in Vietnam and the weakening yen have made the prospect of working in Japan less attractive. Many workers who initially chose Japan now prefer European countries since they see long-term potential there, Vuong added. Dai called for stronger action by the government to stop unlicensed recruiting, saying this would protect workers and ensure Japan remains an attractive destination for them.