Trends, Capacity Constraints, & solutions

Intel Products VietnamOctober 16, 2019

content• Intel Vietnam

• Capacity Constraints

• Suggested Solution

• Comparison of Work Hours in Southeast Asia

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Intel Products Vietnam• 1997: Representative Sales Office

• 2006: Assembly and Test Factory

• Capital investment: US$1 Billion

• Assemble, test, and ship leading Intel products to customers worldwide

• 110 local suppliers

• 180,000 volunteer hours contributed by employees to date

• US$ 22 Million spent on Vietnam Higher Engineering Education Alliance (HEEAP) and scholarships

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Intel confidential

GREAT PLACE TO WORK – FACILITIES

TP Bank booth

Onsite retailer

7-Elevenconvenient store

Special TET meals

Mother roomNew Pop-up Station

Shuttle bus Upgrades

New collaboration

Auto bike parking

New lounge

RECREATION & WELLNESS CENTER (SS10)

Guest chef Café

New collaboration

94%4

Intel confidential

Great plan to work – PRIDE

COMMUNITY ACTIVITIESSummer Camp Blood donation

2019 YTD 16,895 hours, 820 volunteers (33% participation) Planting trees

Virtual Reality GameOffice Tour Giant Board GameDancing Game Balloon ClownFun Race Game

Family day 2019

Ethics – Controls & CS Road shows

Soci

al C

lubs

Female scholarship

Gifts and moreColoring statues

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One Employee, One Leader,

One Organization at a time

Capacity constraintsMany different work schedules and shift configurations exist today in Vietnam due to the wide variety of business models.

Vietnam’s work hours scheme fails to recognize the needs of different business operating models.

• Current Labour Code allows maximum OT of 300 hours/year limiting ability and opportunity to meet and serve global customer demand.

• Proposed Code reduces normal workweek hours from 48 to 44, but increases OT from 300 to 400 hours/year.

Proposed Code reduces total available work hours by 108 hours a year.• Normal work hours reduced by 208 hours/year• OT limit increase of 100 hours still results in a decrease of 108 total available work hours

Proposed work hour scheme serves as a constraint on Vietnam’s ability to attract additional investment

One Employee, One Leader,

One Organization at a time

Recommended working hours solutionProvide flexibility for different business models while protecting employee health due to excessive work hours.

Greater flexibility will attract investment and encourage production shifts

• “Workweek” is the fundamental building block of a work hours law. • Workweek is used to determine how many hours an employee may work and when overtime pay is due.• Normal work hours per workweek remain at 48 hours consistent with current law.• Maximum work hours per workweek (normal and overtime hours) are capped at 60 hours consistent with the

Responsible Business Alliance (RBA) Code of Conduct. • Overtime pay due for hours worked in excess of 48 hours per workweek.• Overtime premium rates remain as under current law depending on when the overtime is worked.

Vietnam could limit this approach through a trusted employer program or among less labor intensive industries to see how creating a more flexible work hours scheme will attract investment.

One Employee, One Leader,

One Organization at a time

-Current law vs demand : meet only 93.2% (2,796 / 3,000)-August 2019 Labor Code proposal vs demand : meet only 89.6% (2,688 / 3,000)*If the working time is about 44 hours per week

Call for Action

• Join in business letter to MOLISA & National Assembly supporting working hour proposal

• Attend meetings with MOLISA and National Assembly Social Affairs Committee to voice support for the proposal

• Share work hour proposal with other interested companies and seek their support of the proposal

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Q & A

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Back-Up Material

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One Employee, One Leader,

One Organization at a time

SOURCES FROM 2019 MERCER METTL & VIETNAM SALARY SURVEY 2019 FROM TALENTNET & MERCER

LABOR MARKET – A QUICK LOOK

A survey by recruitment firm Vietnamworks has shown that up to 78% of Vietnamese workers are looking to change jobs in 2019

VOLUNTARY STAFF TURNOVER –MNC TOP 3 & BOTTOM 3 - industries

SOURCES FROM VIETNAME SALARY SURVEY 2019-BY TALENTNET & MERCER

One Employee, One Leader,

One Organization at a time

SOURCES FROM VIETNAME SALARY SURVEY 2019-BY TALENTNET & MERCER

One Employee, One Leader,

One Organization at a time

Hiring intentions in 2020 : % companies plan to add headcounts

MNC : 52%Local: 71%

SOURCES FROM VIETNAME SALARY SURVEY 2019-BY TALENTNET & MERCER