“Is my company’s turnover rate high or low?”—this is one of the most common questions we hear from executives and HR managers at Japanese companies operating in Vietnam. In most cases, however, the answer is framed as a gut feeling: “It just feels like people quit a lot around here.”
Turnover is not a matter of intuition. It is a management issue that should be understood in terms of numbers and structure. In this article, we first organize the key survey data on turnover in Vietnam—with sources—then move into how to diagnose your own company’s turnover and, finally, the concrete measures that the data points toward. By the time you finish reading, you should be able to see where your turnover problem lies and what to do next. This is the first installment in our “Preventing Turnover and Retaining Talent” series.
1. Vietnam’s Turnover Rate at a Glance
Vietnam is known for having one of the highest turnover rates in Asia. According to a survey by the HR consultancy Anphabe, “The Leavers” (published 2019), the average turnover rate across Vietnam reached 24%. Meanwhile, the level companies regard as healthy—an ideal turnover rate of around 10%—is less than half the actual figure, meaning reality runs at more than double the desirable level.
Note that this 24% is based on a survey published in 2019 and does not represent the very latest level. Even so, it remains widely cited today as an emblematic figure illustrating the structurally high fluidity of Vietnam’s labor market.
How Vietnamese Workers View Changing Jobs
In Vietnam, the perception that changing jobs equals a step up in one’s career is common, and psychological resistance to job-hopping is far lower than in Japan. In fact, a Talentnet-Mercer survey found that 64.8% of employees are considering changing jobs within six months, underscoring how fluid the labor market is overall. A focus on immediate, tangible gains and strong sensitivity to pay gaps are cultural factors that further sustain the high turnover rate. The Japanese premise that “the longer you stay, the more you are valued” cannot simply be transplanted here.
2. How Turnover Differs by Company Type
Turnover rates vary sharply depending on the type of company. According to 2025 data from the HR consultancy Talentnet, voluntary turnover (departures initiated by the employee) by company type is as follows.
| Company Type | Voluntary Turnover | Source |
|---|---|---|
| Multinational corporations (MNCs) | 12.8% | Talentnet 2025 |
| Local companies | 20.3% | Talentnet 2025 |
| Factories paying below market wages | 30-40% per year | Talentnet |
While MNCs hold voluntary turnover at a relatively low 12.8%, local companies run at 20.3%—a gap of roughly 1.6 times. More serious still are manufacturing plants: factories offering wages below the market rate can see 30-40% of their workforce leave every year. In fact, Talentnet’s survey found that 65% of manufacturers cite “retaining talent” as their single greatest challenge.
The important point is that this gap is not “the fate of the industry.” The nearly 8-point difference between MNCs and local companies stems from differences in system design—compensation, career structures, and management. Put the other way around, this means that by building systems on par with MNCs, there is room to curb turnover. Japanese companies often sit somewhere in the middle, which means the upside is considerable.
3. The Pay-Tier “Inversion”
The idea that “if you raise pay, people won’t leave” does not necessarily hold in Vietnam. Anphabe’s data reveals a pay-tier inversion that Japanese companies tend to overlook.
| Monthly Salary Band | Turnover Rate | Source |
|---|---|---|
| Under 10 million VND (lower earners) | 29% | Anphabe |
| Over 80 million VND (high earners) | Around 50% | Anphabe |
Whereas lower earners making under 10 million VND a month show turnover of 29%, high earners making over 80 million VND a month show turnover of around 50%—in other words, it is actually higher. This is because high earners possess skills and market value, and are therefore constantly courted by headhunters. In fact, 65% of high earners are said to be contacted by headhunters three or more times a year. The first thing to understand is the structural reality that compensation alone cannot hold on to high-value talent.
4. Why They Leave: The Top Three Reasons
The reasons Vietnamese employees decide to leave (Adecco, “Vietnam Salary Guide 2024”) cluster tightly at the top three.
| Rank | Reason for Leaving | Share |
|---|---|---|
| 1st | Career prospects and growth opportunities | 58% |
| 2nd | Compensation and benefits | 57% |
| 3rd | Salary | 55% |
What stands out is that career prospects and growth opportunities (58%) rank above salary (55%). The assumption that “people leave because of pay” steers your countermeasures in the wrong direction. This tendency is especially pronounced among younger workers: among the 9X generation (born in the 1990s), 17% say they plan to leave within a year even when they are satisfied with their current situation. There is also data showing that employees with less than two years of tenure are the most likely to leave, which tells us how important early-stage retention measures are.
Pulling the data together so far, we can see that turnover in Vietnam is bound up with three axes—career, compensation, and the early tenure period. These three axes form the backbone of the measures we discuss below.
5. Understanding Turnover “Structurally”: A Diagnostic Perspective
The key to translating the data we have seen so far into actual measures is the perspective of “understanding turnover structurally.” Many Japanese companies judge by the aggregate figure alone—”annual turnover is 20%, so that’s probably about average.” But this is the most dangerous way to look at it. Behind an overall figure of 20% often hide skews such as “40% in one department” or “50% in the first year of employment.”
Turnover should be broken down and examined along at least the following three axes.
- By department: Is turnover concentrated in a specific department or line? (Suggests a management problem)
- By tenure: Is it concentrated among first- and second-year employees? (Suggests a hiring or onboarding problem)
- By pay tier and position: Which layer is walking out the door? (Suggests a problem with pay competitiveness or the career path)
Why break it down this far? Because turnover is not a cheap cost. According to Talentnet, the cost of a single departure at a factory is equivalent to three to five months’ salary. Mercer’s 2025 analysis likewise puts the cost of turnover at 0.5 to 1.5 times salary depending on the role. These figures accumulate from recruiting fees, education and training costs, lost productivity, and the effort of handovers.
The “20% Overall, So It’s Normal” Trap
Quite a few Japanese companies fail to tally leavers accurately and dismiss turnover as “a matter of personal circumstances.” But unless you pinpoint where the problem lies, you cannot allocate your limited recruiting and development resources by priority. Rather than smoothing everything into an average and feeling reassured, identifying “where you are bleeding the most” is the starting point for your next move.
6. Three Measures the Data Points Toward
Mapping to the top three reasons for leaving (career, compensation, and the early tenure period), we present three concrete measures. Each comes with supporting data and real-world examples, and each is something you can start considering tomorrow.
Measure 1: Make Career Paths Visible (Addressing the #1 Reason—Career, 58%)
For the biggest reason to leave—”career prospects”—the direct countermeasure is to make the path to growth visible. Specifically, this means the following three things.
- Dual ladder: Offer a management track and a specialist track on equal footing. Since not everyone can aim for a management role, give the path of deepening expertise equivalent status and rewards
- Transparent promotion criteria: Put required skills, expected results, and minimum tenure in writing. The transparency of the criteria itself works to retain people, as shown in a survey of 208 respondents in Hanoi (NIC Global 2025)
- Individual Development Plans (IDPs) and regular career conversations: Set growth goals for each person and create regular opportunities for dialogue with their manager
The impact shows up in the numbers. Organizations with structured development programs have retention rates +34% higher than those without (Talentnet 2025). And the share who cited mentoring programs and hands-on learning opportunities as a “reason to stay” reached 71% (Reeracoen).
A Trap Peculiar to Japanese Companies—the “Glass Ceiling”
A structure often overlooked at Japanese companies is one in which top-down control by Japanese expatriates persists and the promotion of local managers is limited. Academic research points to a tendency for local talent to leave more readily at companies with a higher ratio of expatriates. If you make people feel that “everyone above me is Japanese, and this is as far as I go,” the most capable employees leave the soonest. Promoting local talent into executive roles and delegating authority is precisely the key to retention. In fact, Nakano of Osaka has been reported as a case that abolished the “glass ceiling” for its foreign staff and opened up a path for advancement (Nikkei Asia).
Measure 2: Market Competitiveness and Transparency of Pay (Addressing the #2 Reason—57%, the #3 Reason—55%, and the Inversion)
Compensation is a crucial factor occupying the second and third reasons for leaving. However, as the inversion described earlier shows, if you turn it into a contest of simply raising the number, the higher earners are the hardest to hold on to. The keys are “understanding the market level” and “transparency.”
- Understand the market level: Benchmark using compensation surveys such as Talentnet-Mercer’s. Compare pay-raise trends (in 2024, local 6.3% / MNC 6.5%) against your own company and make the gaps visible
- Make the salary table and pay-raise logic transparent: Show how people are evaluated and how their pay rises. Transparent criteria are said to matter more to retention decisions than the bonus amount itself (NIC Global 2025). This lets you hold on to people without descending into a bidding war
- Position the 13th-month salary and Tet bonus: Not a legal obligation, but in practice a powerful retention tool. The nationwide average Tet bonus for 2026 was 8.69 million VND per person (+13% year on year) (Ministry of Home Affairs). If you fall below the market level, the risk of post-Tet departures rises sharply
- Voluntary health insurance: US$300-1,200 per employee per year is the standard range. A representative benefit that helps retain the mid-tier and above
The Retention ROI of Benefits—Seen in Real Examples
Compensation is not only cash. There are real examples where investing in “an environment where people can keep working” generated a large return.
- Evervan Factory (a footwear factory in Binh Duong Province): By investing in an on-site daycare, it halved its monthly turnover rate from 4.1% to around 2%, saving roughly US$537,000 a year through higher productivity and lower training costs (Talentnet / IFC)
- Taekwang Vina (a major footwear manufacturer): By setting up childcare facilities, it cut unauthorized absences by 20% and curbed turnover. Absenteeism costs the company close to US$1 million a year, and it trimmed that figure by a fifth (Talentnet / IFC)
Note that the pay gap between expatriates and local staff breeds more distrust the more you try to hide it. Presenting a reasonable explanation of the gap, together with a localization roadmap that progressively raises the treatment of local talent, is the way to secure transparency while building a sense of fairness.
Measure 3: Retention in the Early Tenure Period (Addressing Employees with Under Two Years’ Tenure and the 9X Generation)
Turnover is concentrated “right after joining.” AON’s 2025 analysis found that 34% of voluntary departures occur within six months of joining. In other words, the first few months are the decisive period for retention. And investment in this window pays off—according to Gallup’s 2025 survey, providing structured feedback in the first 90 days makes an employee 2.5 times more likely to stay for three or more years.
- 30-60-90 day onboarding plan: At the 30-, 60-, and 90-day milestones, align on expectations and provide regular feedback. Clarify “what is expected of me” early on
- Bilingual buddy system: Assign each new hire a senior colleague to support them in both work and daily life. At a Japanese manufacturer (Binh Duong Province), this arrangement reduced early turnover from 28% to 9% (Reeracoen)
- Learning opportunities for young staff: An IT company in Da Nang cut intent to leave by 40% with monthly “Learning Fridays.” The opportunity to learn is itself a retention incentive
- Clarify the role before joining: Communicating the job description clearly before onboarding is said to be especially effective for retaining Gen Z. It prevents “this isn’t the job I was told about”
At Japanese companies, where language and cultural barriers exist, the buddy system is especially effective. Isolation—”there’s no one I can turn to”—is a hidden cause of early departures.
7. A Mechanism to “Keep” the Measures Going
The three measures do not work if you run them once and call it done. As noted, Vietnam is a high-fluidity market where 64.8% are considering a job change within six months (Talentnet-Mercer), and intent to leave shifts over short cycles. An employee who was satisfied six months ago may want to test their market value once Tet is over—this is everyday reality. That is precisely why you need a mechanism for continuous monitoring.
The foundation of continuous monitoring is the following three-piece set.
- Pulse surveys: Run short questionnaires at high frequency to track changes in satisfaction and engagement
- Stay interviews: Rather than asking after someone has left, ask while they are still employed “what keeps you here, and what frustrates you”
- Analysis of exit interviews: Don’t stop at individual impressions—aggregate the trends by department, tenure, and pay tier
Alongside this, you will want a perspective for catching the “warning signs” of turnover. In general, factors such as a sudden spike in overtime, irregular attendance, a stalled evaluation, and a divergence between pay and the market level are said to be possible signs. Treat these strictly as hypotheses and verify them against your own data. Metrics worth monitoring on a fixed basis include turnover rates by department, tenure, and pay tier, as well as benefit-utilization rates and internal promotion rates.
8. Summary: From Gut Feeling to “Data and Structure”
Preventing turnover in Vietnam begins by shifting your mindset from the gut feeling that “people just seem to quit” to an approach of understanding it through data and structure. Let us organize the key points of this article.
- Diagnose: Rather than the overall turnover rate alone, break it down by department, tenure, and pay tier to pinpoint “where you are bleeding”
- Act: Mapping to the top three reasons for leaving, take action in three directions—(1) make career paths visible, (2) pay competitiveness and transparency, and (3) retention in the early tenure period
- Sustain: Monitor on a fixed basis with pulse surveys, stay interviews, and exit analysis, and keep tracking the ever-shifting intent to leave
What must not be forgotten is the fact that raising pay alone does not retain people. There is an inversion in which the higher earners leave more, and the number-one reason for leaving is career. Improving treatment is a necessary condition, but not a sufficient one.
The Starting Point of Everything Is “Centralizing HR Data”
To run the diagnose–act–sustain cycle, the prerequisite is first to centralize your HR data. When employee information, attendance, payroll, and evaluations are scattered across payroll software, Excel, and paper application forms, you can neither break turnover down by department, tenure, and pay tier nor catch the warning signs. Only once the data is consolidated in one place does turnover change from a “gut feeling” into a “number.”
The HR management system “EST,” built for Vietnam’s labor-management practice, manages not only attendance, payroll, social insurance, and labor administration but also performance evaluation, goal management, recruitment, and training and development on a single platform. Its strength is that it lets you run, as a continuous mechanism, the very measure that tops the list of reasons for leaving—”making career paths visible,” through the operation of evaluation, development, and career paths.
EST further features “HR Insight,” which uses AI to analyze accumulated attendance and HR data and detect employees at high risk of leaving early. It visualizes the factors we cited as “warning signs”—a spike in overtime, irregular attendance, and low use of annual leave—as a quantitative risk score, and surfaces risk trends by department, high-risk individuals, and even signs of overwork (burnout).
Built on a foundation of centralized HR data, it covers everything from talent management to AI-driven turnover analysis—moving you from gut-feel turnover measures to data-driven, continuous retention management. Start by grasping your own turnover in “numbers.”
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