High Bonus, Yet High Turnover: Decoding the Vietnamese Compensation Paradox with 2025 Salary Data
Nov 4, 2025
Last updated on Nov 5, 2025
Why are Vietnamese companies, despite offering much higher performance bonuses than their multinational competitors, still seeing a brain drain in their most critical roles? The "high bonus, yet high turnover" paradox isn't a sign of a lack of effort; it's a signal of a strategic gap between how companies are investing and what truly makes employees commit for the long haul.
Key Takeaways
- Local companies are using higher performance bonuses to close a base salary gap of up to 43% for leaders compared to MNCs—but they’re still losing their best people.
- A major gap exists between what employees want (stability, benefits, and personal growth) and what companies are doing (focusing on hiring channels and brand promotion, with pay as a secondary concern).
- The struggle to keep senior talent, even with high salaries, is mainly about non-financial factors.
- The solution isn’t a bigger budget; it’s about accepting that your budget is limited and that how you spend it is what truly determines whether people stay.
The compensation paradox in Vietnam is simple: companies are spending more on rewards but getting less commitment in return. This isn’t a problem of how much they’re paying, but of the effectiveness of that investment. The 2025 Talentnet-Mercer Total Remuneration Survey, with data from 678 top companies, gives a clear look at this hidden shift and the strategic problems that leaders now have to face.
The compensation paradox in Vietnamese businesses
Vietnam’s labor market is stuck in a tug-of-war. Companies are spending more but getting less in return when it comes to loyalty. Employees have more choices but are taking longer to find the right job. This isn’t a problem of a lack of bonus allocation or a lack of people—it’s a gap between what employees expect and what companies are offering.
Vietnamese companies offer high bonuses but still lose people
Data from the 2025 Total Remuneration Survey, announced on Day 2 of The Makeover 2025, shows that Vietnamese companies are paying out higher performance-based bonuses than multinational corporations in Vietnam. This is a respectable effort, showing that local businesses are determined to compete for talent despite a significant base salary gap. However, turnover statistics show that the voluntary attrition rate at local companies is still higher.
This paradox reveals a simple truth: compensation, while important, is no longer the only thing that keeps people engaged. Big bonuses are often tied to short-term KPIs, but an employee’s decision to stay or leave is based on their view of their long-term future. An employee might get a great quarterly bonus, but if they don’t see a clear path for growth in the next two to three years, they will still look for other options.
For senior leaders, the problem is even worse. Many top executives hired from major corporations are walking away after just 12-18 months, even with good pay packages. A high salary is necessary, but it’s not enough to keep senior talent for the long term. They prioritize a work environment that respects their values, offers a clear path for growth, and gives them the autonomy and creative space to do their best work.
There’s plenty of supply and demand, but they aren’t connecting
Although Vietnam has over 53 million working-age people and a low unemployment rate of just 2.22%, many businesses still struggle to hire and keep people in key roles. This isn’t just a simple labor shortage.
The core of the issue is a skills mismatch: most businesses report that very few candidates actually have the specific technical and practical skills they need. According to the General Statistics Office, only about 29% of the current workforce has formal technical or professional qualifications, creating a huge gap between what companies need and what the talent pool can offer.
So, even with a large market and low unemployment, the fiercest competition is for the small group of candidates with high-level professional skills. This gap can’t be closed with money or attractive bonuses alone. To achieve sustainable growth, businesses must invest in upskilling, practical training, and building a work environment that fits the modern workforce.
While many businesses feel that candidates’ expectations are too high, the reality is that most workers prioritize very practical factors when choosing a new job. According to the Vietnam General Confederation of Labour, instead of just looking at the maximum salary, modern talent considers:
- A reasonable total rewards package with clear benefits.
- Long-term stability at the company.
- A competitive salary compared to the market.
This shows that most workers aren’t demanding unrealistic paychecks—they just want a reasonable total package with some security about their future. When companies see this as “expecting too much,” what they’re really saying is that their current budgets and systems aren’t flexible enough to meet these needs.
The 2025 Talentnet-Mercer Total Remuneration Report analyzes turnover rates by industry, level, and region to help you build a more effective retention strategy.
Decoding the 3 reasons behind the compensation paradox
1. Employee expectations have changed
The priorities of Vietnam’s workforce have shifted dramatically after a period of market volatility. This is a natural reaction after seeing the wave of mass layoffs in the first half of 2025:
- Over 2,500 banking staff were laid off.
- Many industrial parks saw large-scale cuts in the textile and footwear sectors.
- The global tech industry laid off tens of thousands of workers.
When employees see that even high-performers with high salaries can be let go due to restructuring, they naturally start to value stability more than just a big paycheck. This has led to a shift in priorities from choosing high salaries to choosing long-term stability and a reasonable total rewards package.
The employees who remain after a layoff report that they have to take on more work while living with the fear that they could be next. In this environment, a company with clear benefits, a long-term commitment, and a transparent culture has a much bigger competitive advantage than one that just pays high salaries but offers no stability.
2. Companies are making short-term fixes for a long-term problem
This mismatch is the result of tough choices made with limited money. Many businesses find it easier to spend on recruitment channels and employer branding rather than investing in improving their internal environment.
This makes sense in the short term. The cost of posting job ads, attending job fairs, or hiring a headhunter is easy to calculate and control. In contrast, investing in improving company culture, building internal development programs, or fixing the performance review system requires a bigger budget, takes longer, and produces results that are harder to measure.
This short-term approach is creating a vicious cycle. When companies don’t invest in internal development, current employees see no opportunity, leading to higher rates in different turnover types. As turnover rises, recruitment cost and training costs go up, putting more pressure on the budget. To handle this pressure, companies lean even more on quick fixes, and the cycle repeats.
3. High salaries are not enough to keep top talent
For senior talent, the problem is more complex. The challenge of retaining leaders, even with high salaries, is mainly about non-financial factors: the work environment, company culture, autonomy, personal growth, and genuine recognition. This trend is becoming clearer in Vietnam in 2025, especially among listed companies and large private businesses, as the macroeconomic shifts of 2025-2026 reshape the battle for leadership positions. CEOs and senior executives are facing unprecedented challenges in digital transformation, restructuring, and a global talent war.
Building a total rewards strategy to escape the compensation trap
To solve the “high bonus, but high turnover” paradox, businesses need a more realistic approach. Budgets are limited, but how you spend that money is the deciding factor. Systematically building out the pillars of your employee benefits program will help you create lasting value instead of just focusing on short-term costs.
1. Redefine “rewards.” Shift your mindset from “how much do we pay?” to “how do we create value?” A total rewards package doesn’t have to be more expensive, but it must be designed based on data with a deep understanding of what creates long-term commitment. An internal training program costs far less than constantly hiring new people, but it delivers double the value: it improves your team’s skills and sends a message that you are invested in their future.
2. Start a dialogue instead of making assumptions. Many companies design their rewards policies based on what they think employees want, not what they actually need. Conducting regular internal benefits surveys, “stay interviews” (not just exit interviews), and creating anonymous feedback channels will help you understand their real concerns.
3. Empowerment and clear career paths are key for senior talent. This doesn’t mean handing over all power at once, but rather building a transparent roadmap for how authority will be transferred, based on specific milestones. This clarity helps both sides set realistic expectations and reduces conflict.
4. Personalize your policies. Instead of creating hundreds of different options, you can group employees by career stage (early, developing, established) and personal needs (single, with family, nearing retirement), then design 3-4 flexible packages for each group. For effective implementation, consider professional compensation consulting services to build a standard salary structure and an appropriate budget matrix.
5. Measure the impact of your rewards. Don’t just track turnover. You need to monitor deeper metrics like participation rates in development programs, satisfaction scores for each rewards component, and the rate of internal promotions. These numbers will give you an early signal of whether your strategy is working. Comparing your pay to the average salary in Vietnam and tracking market trends through a comprehensive salary report also helps you make data-driven decisions.
Download the 2025 Total Remuneration Report to access detailed data on benefits structures, performance bonus levels, and the rewards trends of 678 leading companies.
The war for talent can’t be won with high salaries and bonuses alone, but it also can’t be won with empty promises. It requires a realistic balance between what a company can afford and what creates long-term commitment. The compensation paradox in Vietnamese businesses will only be solved when leaders are ready to admit that the problem isn’t about spending too little or too much, but about spending it in the right places and creating value from what they’ve spent.
The Talentnet-Mercer Salary Survey provides detailed analysis of the non-financial benefits the market is using, comparative data on total income by industry and level, and insights into the motivations of different workforce generations—the essential information needed to build a rewards strategy that is both cost-effective and creates lasting commitment. Businesses should consult analyses on types of employee benefits and KPI bonus structures to make the right decisions. Don’t let large bonuses become a wasted expense—turn them into a real tool for talent retention.
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