2025 Labor Market: Navigating Hiring Optimism and the Hidden War for Tech Talent

Key Takeaways

• The 2025 labor market isn’t about rapid growth anymore; it’s about being selective and efficient with the people you have.
• The talent war has shifted from a numbers game to a fierce competition for key technical roles, where hiring costs are rising at double the market rate.
• Local Vietnamese companies are closing the pay gap with multinationals not by matching base salaries, but by using smarter, performance-based bonus strategies.
• With a shallow talent pool, investing in the skills of your current team is now more critical than just hiring new people.

Understanding the labor market is about more than just tracking hiring numbers or turnover rates; it’s about seeing the hidden shifts that are rewriting the rules of talent competition. The 2025 Talentnet-Mercer salary and labor market report, based on data from 678 of Vietnam’s top companies, reveals what the high-level indicators don’t: beneath a surface of stability, a deep divide is creating clear winners and losers.

The big picture: a stable surface hides a hidden split

The 2025 labor market is no longer a single story. What’s happening in one industry is completely different from another, and one company’s opportunity is another’s risk. Understanding what labour market factors are driving these changes is the key to making the right decisions.

1. Hiring is happening, but it’s focused

Data from the 2025 Talentnet-Mercer Salary Survey shows that 35% of businesses plan to hire more staff. But this isn’t a sign of widespread optimism; it’s a sign of careful, calculated moves. These companies are investing in roles that give them a direct competitive edge, not just adding to their headcount. Meanwhile, nearly half the market is choosing to stand still—a defensive but equally strategic choice.

The companies that are hiring aren’t competing with those standing still. They are competing against each other for the same extremely small pool of top talent. This is driving up recruitment costs and employee costs, even as the overall market numbers look stable.

2. Lower turnover doesn’t mean your best people are safe

A lower turnover rate seems like good news, but it’s misleading. The risk of losing people is now concentrated in competitive sectors like Retail, Financial Services, and Real Estate. More importantly, key technical roles in every industry are seeing higher turnover than average because this is the talent pool everyone is trying to raid.

You can’t use a one-size-fits-all retention policy anymore. You need to identify your highest-risk positions and focus your resources on protecting the people whose departure would hurt your business the most.

3. The supply and demand paradox

There’s a growing disconnect in Vietnam’s labor market: we have a surplus of some workers and a scarcity of others at the same time. Opportunities for recent graduates have dropped, while the demand for professionals with 1-3 years of experience has soared. Companies are desperate for people who can contribute from day one to cut down on training costs, but everyone is fighting for this same small group.

This paradox leads to a new reality:

• Recruitment costs are rising for reasons beyond just higher pay.
• It’s taking much longer to find the right person for the job.
• The cost of leaving key positions empty is going up.
• The pressure to hire quickly increases the risk of making a bad hire.

It’s time for businesses to ask a fundamental question: is hiring from the outside still the best strategy, or is it time to start building a talent pipeline for your most critical roles?

How the war for talent is changing

The talent competition in 2025 isn’t about just hiring people; it’s about hiring the right people at a cost you can sustain. The companies that get this are winning.

The 3 job functions getting all the attention

The hunt for talent is no longer spread out. Data from the Talentnet-Mercer Salary Survey shows that three areas are attracting the majority of recruitment and compensation budgets:

1. Sales and Marketing | The teams that directly drive revenue.
2. IT and Telecoms | The engines of digital transformation.
3. Engineering and Science | The foundation of innovation.

These three functions are where growth comes from. Any business that wants to win in this market has to win the race for talent in these areas. As a result, the cost of hiring for these roles is rising much faster than for support functions.

Pay is now based on skill, not just title

The 2025 market is re-evaluating what different skills are worth. Roles in Engineering, Science, and Data Analytics now command the highest average salaries, while roles in industries being automated, like Banking and Insurance, have the lowest pay growth.

This isn’t just about supply and demand; it’s a signal of the strategic value the market now places on specific skills. Your company needs a flexible pay structure that allows you to be competitive for key roles while still managing your overall budget.

This is a tough balancing act that requires detailed salary data for each position in your industry.

The smart rewards strategy of Vietnamese companies

Local Vietnamese companies can’t win a bidding war with multinationals that pay up to 43% more for leaders. Instead, they’re taking a smarter approach: they are offering significantly higher performance-based bonuses.

This strategy allows them to offer competitive total pay to top performers while keeping their fixed costs flexible. It also builds a culture where results matter more than just seniority or title.

Of course, this only works if you have a clear and fair way to measure performance. Without it, you risk losing trust and increasing turnover.

How much are you paying for key technical roles compared to the market? Download the full report for detailed benchmarking data by position, level, and industry.

[Download the 2025 Salary Survey Report]

Should you invest in your current team or hire new people?

Today’s talent war is just the beginning. By 2030, the four most critical skill sets in Vietnam will be AI and Big Data, Cybersecurity, Talent Management, and Agile & Creative Thinking.

Is there enough talent with these skills out there to just go out and hire them, or is it smarter to invest in training and upskilling the team you already have?

With many industries facing severe talent shortages by 2030 and recruitment costs rising, many businesses are realizing that developing their own people is not only cheaper but also better for retention. This is a critical strategic decision in designing a flexible workforce ecosystem that every leader needs to consider.

The 2025 labor market is sending a clear message: winning isn’t about hiring the most people. It’s about hiring the best people and keeping them the longest. The challenge for every leader is to figure out how to compete for key technical talent while managing overall costs.

The Talentnet-Mercer Total Remuneration survey gives you the data you need to do just that. It provides a comprehensive look at competitive salaries for key roles, bonus structures by industry, and a detailed analysis of the pay gap between different types of companies. This is the data you need to build a winning talent strategy in a changing market.

[Download the 2025 Salary Survey Report]