Succession Planning in 2025: Building a Future-Ready Workforce in Vietnam

Vietnam’s economy is at a turning point. As foreign investment surges and industries transform, businesses face new challenges: high turnover, an aging workforce in key sectors, and rising competition for leadership talent. Against this backdrop, succession planning is no longer a “nice to have” but a critical HR strategy for Vietnamese companies that want to remain competitive and future-ready.

Succession planning is about more than preparing for CEO changes. It’s a structured approach to identify, develop, and retain top talent at all levels, ensuring that organizations don’t lose momentum when key employees leave or retire. In 2025, companies in Vietnam must embrace succession planning not just as a risk management tool, but as a driver of growth.

1. Why Succession Planning Matters Now

Vietnam’s workforce is dynamic but also fragile. Several realities make succession planning urgent today:

• Aging workforce in key industries: In manufacturing and energy, many managers and technical specialists are approaching retirement. Without successors in place, businesses risk losing knowledge capital.

• High employee turnover: Vietnam’s average turnover rate remains among the highest in Asia, especially in sectors like retail, IT, and manufacturing. Leadership positions are not immune.

• Expanding foreign investment: Multinationals are scaling operations and looking for ready-to-lead managers. Local firms without succession strategies may lose their best talent to foreign competitors.

A recent workforce survey showed that 62% of businesses in Vietnam plan to expand hiring in 2025, yet many lack a clear leadership pipeline. This gap highlights why structured succession planning is essential for stability and growth.

2. The Cost of Not Planning Ahead

The absence of succession planning leads to:

• Leadership vacuums: Key roles remain unfilled for months, hurting productivity and employee morale.

• Increased hiring costs: Companies end up scrambling to recruit externally, often paying 20–30% more for senior hires.

• Knowledge drain: Retiring or departing leaders take institutional knowledge with them.

• Lower retention: High-potential employees leave if they don’t see clear growth paths within the company.

In short, not planning for the future leaves businesses reactive rather than proactive—constantly fighting fires instead of driving forward.

3. What Effective Succession Planning Looks Like in Vietnam

Effective succession planning is more than listing possible replacements. It requires a structured approach that includes:

• Identifying critical roles: Focus not only on top executives but also mid-management and technical experts who are vital to operations.

• Assessing internal talent: Use performance reviews, 360-degree feedback, and career development discussions to spot high-potential employees.

• Developing successors: Create tailored training, mentorship, and rotational assignments to prepare candidates for future roles.

• Balancing internal and external pipelines: While developing from within is ideal, companies must also map external talent pools to avoid gaps.

• Regular review: Succession plans should be revisited at least annually to reflect business growth, industry shifts, and employee turnover.

4. Succession Planning as an HR Priority for 2025

In 2025, HR leaders in Vietnam are focusing on three key themes that tie directly to succession planning:

• Future-ready workforce: Preparing employees for roles in emerging sectors such as renewable energy, fintech, and digital transformation.

• Retention through development: Providing high-potential staff with structured career paths reduces turnover and builds loyalty.

• Resilience in uncertain times: Economic shifts, global supply chain changes, and talent shortages require companies to stay agile with leadership pipelines.

By embedding succession planning into the broader HR strategy, companies not only protect themselves from disruption but also strengthen their employer brand. Workers are more likely to stay with companies that show a genuine commitment to career development.

5. Best Practices for Vietnamese Companies

Here are practical steps companies in Vietnam can adopt in 2025:

• Link succession to business goals: Align leadership pipelines with long-term strategy, whether expanding internationally or investing in new technologies.

• Engage senior leaders: Succession planning must be championed by top management, not left to HR alone.

• Prioritize diversity: Ensure gender, generational, and cultural diversity in your leadership pipeline.

• Leverage technology: Use HR analytics to track performance, identify high potentials, and forecast talent gaps.

• Partner with recruitment specialists: External experts can help benchmark roles, identify gaps, and provide access to talent not visible through traditional channels.

6. The Role of Reeracoen

At Reeracoen, we work closely with businesses across Vietnam to design future-ready workforce strategies. Our team helps companies:

• Assess leadership pipelines against industry benchmarks.

• Identify high-potential employees through structured evaluation.

• Develop workforce strategies that align with Vietnam’s evolving economy.

• Provide external recruitment support for specialized and leadership roles when internal pipelines are thin.

In today’s competitive landscape, having a partner who understands both local market dynamics and global HR best practices is invaluable.

Frequently Asked Questions (FAQ)

1. What is succession planning in HR?

Succession planning is the process of identifying and developing employees to fill key roles when they become vacant. It ensures leadership continuity and business stability.

2. Why is succession planning important in Vietnam now?

With high turnover, an aging workforce, and strong foreign investment, Vietnam needs future-ready leaders more than ever. Companies without succession strategies risk losing competitiveness.

3. Should succession planning focus only on top executives?

No. While C-suite roles are critical, companies should also plan for mid-management, technical specialists, and other roles vital to operations.

4. How often should succession plans be reviewed?

At least once a year, or whenever major changes occur in strategy, workforce demographics, or industry conditions.

5. How can recruitment partners like Reeracoen support succession planning?

We help companies assess internal pipelines, provide workforce insights, and source external leadership talent when necessary.

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References & Further Reading

• Advancing success planning efforts for a future-ready workforce – ETHRWorld SEA

• Vietnam workforce expansion trends – VnExpress

• Workforce development priorities in Asia – People Matters