Vietnam’s dynamic economy is characterized by a fascinating dichotomy in its labor market: a vast, youthful workforce coexisting with persistent skill gaps. This situation has led to the seemingly paradoxical strategy of actively encouraging labor export even as the country faces domestic shortages in critical sectors. Understanding this complex interplay is key to appreciating Vietnam’s unique development trajectory and its strategic engagement with the global labor market.

The Landscape: Vietnam’s Workforce in 2025

Vietnam’s labor market in 2025 continues to demonstrate robust growth and stability. The workforce aged 15 and above is approximately 53 million, with a high labor participation rate. The unemployment rate remains notably low, signaling a highly engaged workforce.

However, a closer examination reveals a significant structural challenge:

Skill Deficit: Despite the large numbers, a critical bottleneck remains the low proportion of highly skilled workers. Over 70% of Vietnam’s workforce lacks formal professional training or certifications. This creates a substantial mismatch between the skills available and the escalating demands of its rapidly modernizing industries.

Sectoral Shift: The economy is undergoing a continuous transformation, with employment increasingly shifting from agriculture towards industry, manufacturing, and services. Key industries like processing and manufacturing, technology, renewable energy, and logistics are experiencing vigorous growth and high demand for talent.

Informal Sector Dominance: A significant portion of the workforce (over 54% in Q1 2025) operates within the informal sector, which often lacks job security, benefits, and formal training pathways, posing both opportunities and challenges for policymakers.

Domestic Shortages: Paradoxically, even with its large workforce, Vietnam faces labor shortages in specific high-demand sectors within its industrial hubs, particularly for skilled roles in areas like electronics manufacturing, mechanics, automation, IT, and even certain roles in garments and footwear as production expands. This often leads to fierce competition for qualified candidates and wage inflation.

Vietnam as a Major Labor Exporter

Parallel to its domestic labor dynamics, Vietnam remains one of the world’s leading labor-exporting countries. Hundreds of thousands of Vietnamese workers are employed abroad under contractual agreements, with key destinations including Japan, South Korea, and increasingly, European nations like Germany, Austria, Romania, Bulgaria, and Croatia. In 2023 alone, 155,000 Vietnamese workers went abroad.

Significant Remittances: This outward migration generates substantial remittances, estimated at billions of dollars annually (around US$16 billion in 2024), which significantly bolster Vietnam’s foreign exchange reserves and contribute directly to the incomes of countless families, alleviating poverty and stimulating domestic consumption.

Government Policy: The Vietnamese government has a long-standing and proactive policy of promoting labor export. This is driven by several motivations: addressing underemployment, developing human resources by allowing workers to gain international experience, and leveraging remittances for economic development. Laws and regulations are in place to manage this sector.

The Paradox Explained: Why Export Labor While Needing It?

The apparent contradiction of needing workers at home but sending them abroad is rooted in a combination of economic realities and strategic considerations:

The Skill Mismatch is Paramount: The most fundamental reason is the disconnect between the skills possessed by the majority of the Vietnamese workforce and the advanced, specialized skills increasingly demanded by high-value domestic industries. Many of the jobs available abroad (e.g., in basic manufacturing, construction, agriculture, caregiving) can be filled by workers with foundational skills, or those willing to be trained on the job, even if they lack formal certifications.

Higher Wages and Livelihood Improvement: For many Vietnamese workers, particularly those from poor, rural, and remote areas, working overseas offers a significantly higher income and better living standards than what they could achieve domestically. This strong economic incentive is a powerful “pull” factor for individuals and families seeking to escape poverty and invest in their future.

Remittances as a Macroeconomic Tool: The substantial flow of remittances provides a crucial and consistent source of foreign currency, supporting the balance of payments, stimulating domestic investment and consumption, and acting as a buffer against economic shocks.

Human Capital Development and Knowledge Transfer: The government views labor export as an avenue of  human capital development for some categories of population. Workers gain valuable vocational skills, learn advanced work practices, and develop soft skills (like language proficiency and adaptability) during their time abroad. The long-term vision is that these returning workers will bring back valuable knowledge and experience to contribute to Vietnam’s own industrial upgrading.

Demographic Needs of Destination Countries: Many developed nations, particularly in Europe, face aging populations and labor shortages in specific sectors. Vietnam’s young demographic provides a natural solution to these countries’ workforce needs.

In essence, Vietnam’s labor export strategy is a pragmatic response to its immediate socio-economic needs and global opportunities, while simultaneously aspiring for the long-term benefit of a more skilled and globally integrated workforce.

Orienting Workforce to the EU Labor Market: Key Sectors

The European Union, facing significant demographic shifts and labor shortages, represents an increasingly attractive market for Vietnamese workers. To effectively orient its workforce towards the EU, Vietnam should focus on sectors where EU demand is high and where Vietnamese workers can be adequately trained and certified to meet international standards.

Based on current EU labor market demands, the following sectors offer significant opportunities:

1. Manufacturing and Industry (Skilled Trades):
   
   • Welders: There is a critical shortage of skilled welders across numerous EU countries (e.g., Germany, Poland, Romania), particularly those certified to international standards like ISO 9606. Vietnamese welders, with proper training and certification, are already proving to be a strategic solution.
   • Factory Workers (Specialized): Demand exists for factory workers in automotive, machinery, and other manufacturing industries, especially if they possess specialized skills in operating advanced machinery or quality control.
   • Automation Technicians: As European industries automate, there’s a growing need for technicians capable of installing, maintaining, and troubleshooting automated systems.
2. Construction:
   
   • Skilled Trades (e.g., Carpenters, Masons, Electricians): Countries like Germany, France, and Poland have high demand for skilled construction labor due to expanding infrastructure projects. Vietnamese workers with vocational training in these trades can fill crucial gaps.
   • General Construction Workers: While not highly skilled, a consistent demand exists for general construction labor, particularly for larger projects.
3. Healthcare and Care Services:
   
   • Caregivers/Nurses’ Aides: Due to aging populations, the EU faces severe shortages in long-term care and elder care. Vietnamese workers trained in caregiving, with language proficiency, can find significant opportunities.
   • Nurses and Doctors (Longer Term): While requiring higher qualifications and stricter recognition processes, there is a consistent long-term demand for qualified medical professionals across the EU. This requires substantial investment in language and professional recognition.
4. Hospitality and Tourism:
   
   • Service Staff (e.g., Hotel Staff, Cooks, Restaurant Workers): Popular tourist destinations in France, Italy, and the UK often require service-oriented staff to meet the demands of their thriving tourism sectors.
5. Agriculture:
   
   • Seasonal and Farm Workers: Countries like the Netherlands, Italy, and Spain frequently require seasonal labor for harvesting and livestock management, particularly in their agricultural sectors.

(Sources from different oficial studies)