While orders are relatively stable, footwear businesses are worried about labor shortages and rising labor costs that have eaten into profits.
There was a factory that had to close down.
Along with textiles, in recent years, the leather and footwear industry has always been in a state of labor shortage, with no young workers to supplement. Sharing with reporters of the Industry and Trade Newspaper, Ms. Phan Thi Thanh Xuan - Vice President and General Secretary of the Vietnam Leather, Footwear and Handbag Association said that labor shortage is a big challenge that makes it difficult for businesses to maximize production capacity.
“ Last year , there were footwear businesses that had to reduce production scale and even close factories due to lack of labor ,” Ms. Xuan emphasized.
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| Ms. Phan Thi Thanh Xuan - Vice President and General Secretary of Vietnam Leather, Footwear and Handbag Association |
In labor-intensive industries such as textiles and footwear, labor is still the decisive factor in production efficiency, business, and investment attraction when this cost accounts for up to 25% of product cost. According to Ms. Xuan, if this cost continues to increase, businesses will almost lose profits, not to mention reducing the competitiveness of Vietnamese footwear products in the market.
The cause of the labor shortage, besides competition for labor within and outside the industry, is also due to many workers quitting their jobs to work abroad.
Vietnam is gradually losing its advantage in labor, an issue that has been warned by domestic and international experts for a long time. Looking at the labor costs of the textile industry - a labor-intensive industry similar to leather and footwear, it can be seen that the "picture" is not very optimistic. The average monthly salary cost for garment workers in Vietnam is at 300 USD/person/month, much higher than Bangladesh at 95 USD/person/month, Cambodia at 190 USD/person/month, and India at 145 USD/person/month.
With such labor costs, it is not difficult to see that businesses in the two industries are struggling to find ways to compensate, ensure profits and social security pressure for workers.
There is no other way but to increase productivity.
As labor becomes increasingly scarce, labor costs are no longer a support and competitive advantage, forcing footwear businesses to increase productivity through the application of modern machinery and technology.
Regarding this, Ms. Xuan also shared that in recent years, the number of leather and footwear enterprises has not increased, even decreased, but the average footwear output has increased by 10% each year. " Where does this number come from? It is from the effort to innovate technology and increase production capacity," said the leader of the Vietnam Leather, Footwear and Handbag Association.
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| Labor shortage is a big challenge for leather and footwear businesses. Illustrative photo |
Ms. Xuan also acknowledged that applying technology to increase labor productivity is a mandatory path for businesses to solve the "problem" of survival in the context of increasingly "hot" labor shortages.
But to do this, businesses must solve the "problem" of increasing costs, because innovation in production technology and management is related to resources, and not every business is qualified to do so.
Moreover, leather and footwear is a very specific industry. “ It is not enough to have finance to invest in production, but you must have a profession, and this profession is very difficult, ” said the leader of the Vietnam Leather, Footwear and Handbag Association.
It can be seen that leather and footwear enterprises are in a "difficult situation" when they are under pressure from labor shortage and pressure from meeting green standards of the import market. " If they do not comply, enterprises will not have orders and will be eliminated. In fact, there have been enterprises that have been eliminated, especially small and medium enterprises ", Ms. Xuan also said. The solution to this problem is still the application of science and technology, enterprises in the industry are gradually meeting the requirements.
Faced with the difficulty of labor shortage, besides managing capital to bring machinery and equipment into production, domestic footwear enterprises have tried to find ways to retain workers through social welfare. However, there is still a need for state policies to further support workers. According to Ms. Xuan, such policies also need to be studied in harmony, suitable for both workers and employers.
From another perspective, Dr. Nguyen Thi Lan Huong - former Director of the Institute of Labor Science, some industries are likely to have labor shortages. To "retain" workers, a long-term plan is needed. The biggest bottleneck now is the quality of the labor force.
Therefore, it is necessary to pay attention to training and retraining to suit the recovery and expansion of the market. At the same time, it is necessary to link with the needs of enterprises and the economic development requirements of each region. The system of job training centers must have good reforms, increasing the need to connect jobs on a larger scale so that workers can grasp it.
| In 2025, the leather and footwear industry aims to increase exports by 10% compared to 2024, reaching about 29 billion USD. One of the challenges for the industry to achieve this goal is to solve the increasingly difficult "problem" of labor shortage. |
Source: https://congthuong.vn/thieu-lao-dong-canh-bao-nong-voi-doanh-nghiep-da-giay-376253.html
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