Cost pressures and AI are shaping corporate reward strategies in Vietnam
Facing rising costs shifting talent demand and diverse employee expectations Vietnamese businesses are rethinking workforce investment
Vietnam's corporate reward strategies are being influenced by cost pressures and advancements in AI, with companies adopting a more targeted approach to talent investment. The Talentnet-Mercer 2026 Total Remuneration Survey, presented at The Makeover 2026 conference, revealed that productivity in Vietnam is projected to reach $28,956 per worker in 2026, a 24.4% increase from 2022.
AI adoption is accelerating across Asia-Pacific and Vietnam, demanding data, digital, and AI capabilities. Despite signs of labor market stabilization, businesses are cautious about hiring, with 43% planning to increase headcount and another 43% to maintain current workforce levels. Compensation is selective, with merit increases projected at around 6% for both multinational and local companies, while variable bonuses remain crucial.
Development remains a priority, with over 70% of organizations providing training support for technical and job-related skills. Employers are moving towards targeted human capital investment, where decisions must demonstrate their impact on organizational performance. The RE.ACT session discussed mounting cost pressures, with energy, gold prices, US Federal Reserve rates, domestic borrowing costs, and inflation all rising in 2026.
Businesses are implementing tailored rewards strategies, prioritizing critical roles and skills, to balance cost control and talent attraction. The RE.DEFINE session highlighted that while salary, bonuses, and medical insurance remain top priorities across generations, preferences differ. Gen X values flexibility and recognition, Gen Y seeks career development and recognition, and Gen Z prioritizes learning, recognition, and wellbeing.
Organizations need to link pay to employee-created value, such as contribution, role, and skills, to allocate resources strategically. Overall, a successful Total Rewards Strategy should balance market competitiveness, employee expectations, and long-term business priorities, emphasizing that "PEOPLE First."
Written by urgent.news from Vietnam Investment Review's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
