Most, if not all, job openings in Vietnam posted on LinkedIn write “13th month or Tet bonus” above all other benefits and perks. And many job seekers actually specifically look for this before they click the Apply button.
Tet, the biggest and most important holiday in the country, promises not just a long break from work or a chance to be with loved ones; for millions of laborers, it’s that time of the year to get paid about twice the monthly salaries stipulated in their contracts.
A report from VnExpress noted that the highest Lunar New Year bonus given this year reached VND 1 billion ($42,350) by a firm in Danang. Companies in Ho Chi Minh City, the financial capital of Vietnam, are paying an average of VND 13 million ($550), a 45% increase from last year.
Tet bonuses are not compulsory, a fact that the Ministry of Labor, War Invalids, and Social Affairs reiterates every year. Employers set their own rules on how much or if they’d be giving out bonuses. With many companies, especially in the manufacturing sector, impacted by the global economic downturn in the last months of 2022, paying out bonuses will be an added pressure.
HCMC labor department director Nguyen Van Lam told local media that of the over 1000 businesses surveyed, nearly 400 said they have financial troubles but would still try to give employees Tet bonuses.
Proof of appreciation
Hung, a travel consultant in Ho Chi Minh City, is excited to get his first Tet bonus in three years. He’s been with the luxury travel agency for nearly a decade and has always received bonuses on Tet holiday. However, the pandemic halted his company’s operations. He said he considers himself lucky to still have a job even when there was basically nothing to do in the office.
Now that tourism is regaining momentum after a two-year hiatus, his company promised to give out at least 75% of the monthly salary as a bonus before the holiday on January 20-26.
With confirmed bookings coming in, in big groups at that, Hung said the travel agency is making big progress in becoming financially stable again.
For Bao Ngan, bonuses are definitely a great motivating factor to be more productive at work. She knows her employer at a villa resort in Phu Quoc is not mandated to give out Tet bonuses, “but it’s something many workers look forward to every Tet holiday. I think it’s already part of our culture.”
Even foreign employees in Vietnam get excited about Tet bonuses. Depending on their contracts, expat employees have the chance to also get at least a month’s worth of salary as an annual bonus.
Filipino expat Liss got her first-ever Tet bonus — half of her monthly salary — while working at a startup in 2020. It came as a surprise, she said, as she didn’t expect she was entitled to such a benefit.
“I was the only foreign worker in a small startup with no revenue yet, so I didn’t really expect to receive that much. On a more personal note, since it was my first Vietnamese employer, I felt valued and seen because, more than the money, receiving a bonus is like a tap on the back for a job well done.”
However, while many workers consider the annual bonus as proof of appreciation from their employers, many also take it as the last hurrah before they jump into another job.
“I won’t say a Tet bonus would guarantee loyalty. Many don’t even inform their employers when they leave. That’s why many companies release bonuses after the holiday,” noted Ngan.
The three-month period between January or February and April is considered the golden period of recruitment, when thousands of people are eager to start new careers. With the new year symbolizing a new beginning, workers take it as an opportunity to look for greener pastures, leaving employers with empty seats they couldn’t immediately fill in.
Beyond bonuses, invest in company culture
FlexOs, a new HR tech startup that helps companies manage hybrid teams and offices,” will be giving out Tet bonuses to its 15-member team, its founder, Daan van Rossum, told Vietcetera. The rates will be based on the duration of the team member’s contract until February and pay it out in March.
“We are a new company (founded in August after our successful fundraiser), so it was actually a topic of discussion when we discussed our budget,” said Daan.
“My question to the management team, who are local, was whether the Tet bonus is a nice extra or something that’s expected. The feedback was clear that it’s the latter. So we decided to give out the Tet bonus to all of our team.”
He admitted that Tet bonus significantly impacts company finances. But FlexOs considers it part of headcount-related expenses. “It’s the cost of doing business and hiring people,” Daan explained. “If you budget it from the beginning, it wouldn’t be an issue.”
But it’s not everything employers and employees should focus on. It’s received positively, of course, but real investment should be poured into greater career opportunities for workers, a healthy work culture, fun days at work, and hiring the best talents.
Companies should create an environment where workers know their purpose and are appreciated for their good performance. Tet bonuses only come once a year, so it doesn’t really encourage loyalty or productivity, said Daan. But a workplace that inspires growth and fosters employee engagement does.