UNIVERSITY OF ECONOMICS HO CHI MINH CITY International School of Business ------------------------------ Ly Duy Nam THE IMPACT OF EMPLOYABILITY SKILLS ON FRESH GRADUATES’ JOB OPPORTUNITIES IN HOCHIMINH CITY MASTER OF BUSINESS (Honours) Ho Chi Minh City – Year 2014 1 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com UNIVERSITY OF ECONOMICS HO CHI MINH CITY International School of Business ------------------------------ Ly Duy Nam THE IMPACT OF EMPLOYABILITY SKILLS ON FRESH GRADUATES’ JOB OPPORTUNITIES IN HOCHIMINH CITY ID: 22120132 MASTER OF BUSINESS (Honours) Supervisor: Dr. Nguyen Quynh Mai Ho Chi Minh City – Year 2014 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com TABLE OF CONTENTS CHAPTER 1: INTRODUCTION .1 Overview of Vietnam’s Economic Growth .2 Overview of Vietnamese Education and Employability for Labor Market .2 Statement of the Problem .6 The Scope and Limitation. 4 CHAPTER 2: LITERATURE REVIEWS .1 Concepts and Definitions .6 Job Opportunity/Employment Gaining: .2 Role of Employability Skills toward to Job Opportunities .1 Technical Skills Impact on Job Opportunities .2 Importance of Work Experience toward to Job Opportunities .3 Impact of Soft Skills on Job Opportunities .4 Impact of Foreign Languages on Job Opportunities .1 Research Method and Procedure .1 In-depth Interview .3 Questionnaire Design and Pilot Test:. 26 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.1 Description of Questionnaire .1 Population and Sample.2 Sample size and sampling .3 Data Analysis Method.
29 CHAPTER 4: DATA ANALYSIS AND FINDINGS .3 Exploratory Factor Analysis .4 Revised Model and Hypothesis .5 Correlation and Regression Test .7 Influence of Background study. 42 CHAPTER 5: CONCLUSIONS, IMPLICATIONS AND LIMITATIONS .1 Implications of research .2 Limitations and Directions for Further Research. 56 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com GRATEFULNESS I honestly thanks to Dr. Nguyen Quynh Mai who always help me to carry out this study.
I highly appreciate her comment and support because it gave me a chance to learn how to do an academic research. By the way, I would like to thank to all lecturers of ISB who taught us master program, especially some subjects for carrying out research such as research design and data analysis. However, I also don’t forget to thanks to all my friends who help me to collect data. Firstly, Ms Le Thanh in University of Social Science Humanities (USSH) industriously came to every class to deliver questionnaires.
Secondly, Ms Lien who is ISB staff supported me about email address to collect online- data. Thirdly, Mr Ngo Cuong in Ho Chi Minh City University of Transport always gives me a hand to do this study. I also want to thank to all students in ISB, USSH who filled questionnaires. At last, my sincere thanks owe to my family, especially my mom, brother and sister who supported me both of physical and mental conditions to complete this study.
LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com PLAGIARISM STATEMENTS I would like to say that I have done this study by myself, with quantitative research, all material was read to summarize the appropriate main ideas, or keep in “…. As plagiarism warning, I totally avoid breaking this rule. As a student in ISB and economics, I totally disagree with plagiarism. LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com LIST OF TABLES Page Table 2.1 Skills under Four Factors 5 Table 2.2 Skills Grouped into Three Factors 6 Table 3.1: Preparing contents for discussion 24 Table 3.2: Measurement Scales from Interview and Reference Sources 26 Table 3.3: Pilot Results 27 Table 3.4: Measurement Scales 27 Table 4.1: Total Variance Explained 35 Table 4.2: Revised Measurement Scales 36 Table 4.3: Items Deleted 36 Table 4.5: Descriptive Statistics A 39 Table 4.6: Descriptive Statistics B 40 Table 4.7: Model Summaryb 41 Table 4.9: Coding variables to test H5 42 Table 4.10: Model Summaryb 43 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com LIST OF FIGURES Page Figure 1.1: Vietnam GDP Growth Rate 1 Figure 2.1: Problems Faced by Employers in Hiring Fresh Graduates 16 Figure 2.2: Employers Dissatisfaction with the Key Skills of Young Recruits 17 Figure 2.3: Research Model 21 Figure 3.1: Research Procedure 23 Figure 4.1: Graduated Year 31 Figure 4.3: Studying Status 32 Figure 4.4: Working Status 33 Figure 4.5: Background Study 33 Figure 4.6: Foreign Language 34 Figure 4.7: Revised Research Model 37 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com ABBREVIATION CV - Curriculum Vitae ISB – International School of Business IT - Information technology FDI - foreign direct investment FIA - Investment Agency GDP -Gross domestic product HCMUTRANS – Ho Chi Minh City University of Transport OECD - The Organization for Economic Co-operation and Development USSH – University Of Social Sciences and Humanities UEH – University of Economics Ho Chi Minh City WTO - World Trade Organization LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com ABSTRACT Vietnam education is more and more developing, however majority of students seem to be hard to find a job when graduating.
The problem is lack of employability skills and unable to meet labor market’s requirements. This study’s carried out to determine the important skills which fresh graduates need to apply for a job. The research model includes dependent variable “Job Opportunity” and independent variables “soft skills, technical skills, foreign language, work experience and computer skills, which are tested to know our relationship. It means that the study is carried out to know how the impact of employability skills on job opportunity.
The methodology focuses on interviews and surveys to collect information and data. The conclusion has been drawn based on random examination from 200 fresh graduates, aged between 22 and 27 years, in Ho Chi Minh City, they were either working or studying accounted for about 70 percent and about 30 percent respectively. In multiple linear regression analysis, all independent variables significantly impact on dependent variable. Especially, technical skills have strong effect on job opportunity.
It can be said that their relation is closer than others. Moreover, there has no impact of moderating variable on relation between job opportunity and employability skills. And this result had no change in case they had different background study. It was a good result for psychological and behavioral research.
The conclusion was that employability skills are very important to find jobs and work. In addition, implications and limitations are deeply discussed with both of good and no-good sides. The more fresh graduates practice and learn, the more they have high job opportunity. KEYWORDS: Fresh Graduates, employability skills, soft skills, technical skills, foreign languages, work experience, impact.
LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com CHAPTER 1: INTRODUCTION 1.1 Overview of Vietnam’s Economic Growth Viet Nam is ranked 34 out of 60 countries in terms of globalization (Ernst &Young; UK Economist Intelligence Unit) and it trends positively. Foreign Direct Investment in Vietnam (Lam, 2012) reports that its economy has grown at an annual average rate of around 7.5 percent during the past two decades. GDP of Vietnam has gradually increased through 2006-2012 (Figure 1.1) and grown at 5 percent in 2013. Exports increase by more than 12 percent yearly.
Several administrative actions bring the trade deficit back into balance.1: Vietnam GDP Growth Rate (Source: www.com) Vietnam Ministry of Planning and Investment (MPI, 2012) reports that Vietnam has been good at attracting foreign direct investment (FDI) with an average rate of 8.3 percent of GDP for the last five years (2008-2012) which is among the highest rates in the whole of the global frontier and emerging space in Asia. According to the Foreign Investment Agency (FIA), Vietnam reaches $21.6 billion of FDI in 2013, up 54.5 percent yearly and it will play an important role in strengthening Vietnam’s economic growth in 2014. FDI in Affiliates of Foreign MNCs (Multi- National Companies) are virtually non-existent through 1988, but it subsequently increases to annual averages of US$493 million in 1989-1995 and US$1. 1 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com Today Vietnam has become a one of the best choices for multinational corporations to expand, such as Intel, Foxconn and Compal which have built their largest plants.
Vietnam licenses 1,100 new projects and approved 435 existing projects registering to increase capital in 2012, bringing the total value of the newly licensed and added capital to $13 billion, equivalent to 84.7 percent of total in 2011. Foreign banks with 50 foreign companies operating via branch offices and five wholly-owned bank subsidiaries have reached Viet Nam (Nakra, 2013). By 15 December 2013, 98 countries and territories have invested in 14,489 Vietnamese projects with a total registered investment capital of $213.2 Overview of Vietnamese Education and Employability for Labor Market By 2011 there are 204 universities and 226 colleges, Viet Nam needs 10,000 to 15,000 skilled employees annually in fields such as information technology, tourism, harbor management, finance and banking to keep up with demand. The number of universities in Ho Chi Minh City is more and more increasing that has created 18 new universities since 1998.
There are five institutes and 28 universities including 15 public ones and 13 private ones until now. Employers identify job-specific technical skills as the most important skill, and equally look for cognitive skills such as problem-solving and critical thinking, and behavioral skills such as team work and communication. Foreign investors reveal soft skills and professional skills are equally important in their recruitment decision. At this moment, Ho Chi Minh Forecasting Manpower Needs and Labor Market Information center reports that there are 10,000 vacancies per month in 2,000 companies in Ho Chi Minh City and 15,000 employees needing for jobs.
In stage of 2015- 2020, estimated labor demands are 270,000 vacancies per year including 89,100 ones for higher graduates in Ho Chi Minh City. Contrarily labor supplies are short of quantity and quality, so unemployment is still happening. Main cause for these problems is lack of employability skills (Pham & Tran, 2013). A paradox of the employment market emerges in Ho Chi Minh City.
At the moment, Vietnam is facing shortage of good skill employees in various service sectors including finance, banking and business and tourism. There is up to 60 percent of Vietnamese graduates who are unable to secure employment and need to be re-trained. Employers still face difficult to find suitable graduates with the knowledge, skills and attributes require for their workplace, according to OECD (2012). Taylor Nelson Sofres survey (2002) has pointed out that Vietnamese workers lack in soft skills consisting of Team work, Communication and adaptation to new circumstances, foreign language proficiency, problem-solving skills, time management abilities,…In addition, Vietnamese lack of employability skills presenting in different levels, industries and professions.
Their ‘High 2 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com shortages’ are in four of six major job categories: engineers, managers, skilled manual trade people, laborers. In industry knowledge, the most severe deficits are in the fields of health, telecommunications, machine manufacturing, retail, construction, transport and logistics, chemicals and fertilizers. Actually, fresh graduates have not met need of labor market and employers’ expectation for their jobs in Ho Chi Minh City. The Survey has examined 234 recruiters and 3,364 graduates from 20 universities, showing 36.3 percent of recruiters’ agreement with retraining for students in all-around skills, 28.3 percent in specialized skills, and 33.6 percent in both skills and professional knowledge (HCM University of Pedagogy, 2010).2 Statement of the Problem There has an increase in wide ‘gap’ between fresh graduates’ skills and capabilities, as well as the requirements and demands of the working environment in raising changeable and globalized society.
There is a notable shortage in current knowledge linking graduates’ possession and employers’ needs of the context to employability skills. Exactly, 50 percent of graduates lack professional skills and need retraining to meet recruiters’ requirement, according to “Ho Chi Minh City Are Weak in Soft Skills report” of HCM University of Pedagogy (2010). Therefrom, unemployment still happens in Ho Chi Minh City of Viet Nam, even though labor demand is available and abundant.