1
INTRODUCTION
1- Necessity of the thesis
Resources used for production include labours,
equipments, material, land and others, among that labours play
a decisive role for development. Human capital belongs to the
labour resource and it is the core of this resource.
Nowadays, countries all over the world in general and
in Vietnam in particular is transferring into the knowlegde
economy, the economy much bases on intelligence in order to
develop. In this economy, the most precious resources are the
intellectual assets and the intelligence in enterprises. In order to
promote the sustainable development of enterprises in the
knowledge economy, human capital plays a decisive role so that
we need to research to find out the ways to have the high
quality of human capital meeting our country’s demand of
industrialization and modernization next.
Vietnam garment enterprises have grown strongly in
export turnover recent years. However, according to the
statistical data of some Ministries and Branches, although
Vietnam garment enterprises have been equipped with modern
equipments and technology not worse than other countries in
the area but the labor productivity of them is still much lower,
do not create their own brands of export products so they can
not make products that contain high intellectual. This is the
reason why Vietnam garment industry makes little added value
and labours usually must work overtime. The main causes are :
- Firstly : although the garment industry has been
equipped with modern equipments but because of


3
garment industry and this is the purpose of the thesis ”Enhance
the quality of human capital of Vietnamese garment
enterprises”
2- Literature review
At enterprise level, human capital has been
acknowledged that it affects strongly the individual productivity
(Schultz 1961a, b; Becker, 1962) and recently, more and more
people believed that the human capital affects the
competitiveness of enterprises (Davenport, 1999; Teixeira,
2002; Phillips, 2005; Griffith, 2006; Dinh Viet Hoa, 2009).
Some researches on human capital of some authors of
Vietnam and overseas have mentioned fulltime training, off the
job training as the factors creating general human capital; on the
job training helped to create the specific human capital (Becker,
1962; Tran Tho Dat and Do Tuyet Nhung, 2008). Borjas (1996)
in the book “Labour Economics” has developed the theory of
accumulation of human capital and the return rate in education.
Few researches have mentioned the quality of human
capital. The Polish economist used the difference of salary as
the measurement to compare the quality of human capital
between America and Poland (Cichy and Malaga, 2006). So the
questions that the thesis must answer are : what is the quality of
human capital ? What criteria can we use to assess the quality of
human capital ?
3- Purpose of research
- Clear concepts and arguments of human capital, the
quality of human capital and criteria to assess the quality of
human capital of garment enterprises.



5
of the quality of human capital as following : Quality of human
capital is the degree to which a set of characteristics of human
capital make human capital able to fulfill the proposed or
implicit needs.
+ Based on 4 characteristics showing the quality of
human capital and the features of human capital of Vietnam
garment industry, based on the models and the definition of
human capital developed above, the thesis has proposed 7 new
criteria to assess the quality of human capital of garment
enterprises. Those are : Financial investment in education,
schooling years, number of years of working experience,
average earnings, increasing rate of earnings, labour
productivity, labour turnover.
+ Based on the results of the specific researches on the
quality of human capital of Vietnam garment enterprises, the
thesis has found out that there are 6 factors which affect the
quality of human capital of garment enterprises. Those are : full-
time training, enterprise management, human capital needs of
enterprises, demography, circumstance of family and policies of
government.
- The new findings and recommendations drawn from
the research results
+ The thesis assessed the quality of human capital of
Vietnam garment enterprises according to the 7 criteria
proposed above and found out that the quality of human capital
of Vietnamese garment enterprises was very low.
+ The research results show that there are 5 strategies to
invest in the human capital of garment enterprises, but if we

Chapter 3 : Solutions to enhance the quality of human
capital of garment enterprises (46 pages)

7
CHAPTER 1: SCIENTIFIC ARGUMENT ON HUMAN
CAPITAL AND THE QUALITY OF HUMAN CAPITAL OF
GARMENT ENTERPRISES
1.1 Definition of human capital
1.1.1 The point of view of employees are assets of firms
The point of view of employees are assets of firms
mentioned 2 matters respectively but related to each other.
Firstly, this point of view dignified employees because it
emphasized the value which the employees contributed to
enterprises. Secondly, this point of view may cause
misunderstanding that enterprises owned the employees.
1.1.2 Definition of human capital
1.1.2.1 Definition of human capital
Human capital is the aggregation of skills, working
experiences, training level and the exploited ability of
employees.
1.1.2.2 The point of view of employees are investors
There are 2 ideas emphasizing employees are investors:
Owning and controlling human capital : employees
themselves, not organizations own human capital.
Rate of return : employees act as investors and they will
invest their capital where the rate of return is the highest.
1.1.2.3 Features of human capital
General features of human capital : human capital is a
non-tradable good; individuals do not usually control the way
and the speed by which they obtain human capital; human

made up of human capital of individuals, so researching the
whole forming process of human capital of individuals is
needed to research human capital of enterprises.

9
1.1.5 Differences between human resource and human capital
Table 1.1 : Compare human resource with human capital
Human resource Human capital
- Employees are the human
resource of an organization
- Employees are the investors
- The role of employees is
p
assive
- The role of employees is ver
y
active
- Research the man who has
enough legal ages to work
- Research all process of forming
human capital from being born.
- Can not value human resource - Can value human capital
1.1.6 Differences between human capital and physical capital
Table 1.2 : Compare human capital with physical capital
Item Human capital Physical capital
Property
right
- Can not separate the owner - Can separate the owner
Characteristic - Intangible - Tangible
Marketability - There is no market to

- Easier because it is easy
to be seized, sold, jointly
owned…
Return -Employees are active to create
the returns for themselves
- Owners accept the
returns of the market

10
1.2 Human capital models
1.2.1 The Schooling model
Supposing that W
COL
is the sign of earnings of college
graduates, W
HS
is the sign of high school graduates, H is the
sign of cost for one year learning in a college.
Present value of earnings stream if the employee
only gets a high school diploma is :
∑
=
+
=
+
+++
+
+
+
+=

r
w
r
w
r
H
r
H
r
H
HPV
COLCOLCOL
COL
+
+++
+
+
+
+
+
−
+
−
+
−−=
(1-2)
Post-college earnings
strea
m


%∆w ∆w/∆s
Percentage change in earnings = = (1-3)
∆s W
Source : [58]
The schooling model find out “the stopping rule” that
tells a worker when he should leave the school. That is :
Quit school when the marginal rate of return to schooling = r (1-4)
1.2.2 The human capital model of Mincer
1.2.2.1 Age-earnings stream

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Earnings increase over time but at a decreasing rate.
1.2.2.2 Invest in human capital after schooling
On the job training helps to accumulate human capital
1.2.2.3 On the job training and the age-earnings stream
The age-earnings stream of different education groups
diverge over time.
1.2.2.4 The human capital model of Jacob Mincer
log w = βs+δ
1
t+δ
2
t
2
+ other variables (1-13)
Source : [58]
W is the worker’s wage rate, s is the number of years of
schooling, t is the number of years of labor market experience.
1.3 The process of building human capital
1.3.1 Building human capital by formal and informal learning

earnings, labour productivity, turnover of labour.
1.4.4 Factors which affect the quality of human capital of
garment enterprises
There are 6 factors which affect the quality of human
capital of garment enterprises. Those are : full-time training,
enterprise management, human capital needs of enterprises,
demography, circumstance of family and policies of government.
CONCLUSION OF CHAPTER 1
Chapter 1 has systemized the argument on human
capital, models of human capital, measurements of human
capital, building human capital, strategies to invest in human
capital; developed the definition of the quality of human capital,
mentioned the characteristics of human capital of garment
enterprises and the factors affected the quality of human capital.
The thesis has proposed 7 new criteria to assess the quality of
human capital of Vietnamese garment enterprises

13
CHAPTER 2 : CURRENT SITUATION OF HUMAN CAPITAL AND THE
QUALITY OF HUMAN CAPITAL OF GARMENT ENTERPRISES
2.1 The overview of Vietnam garment industry
From 2000 to 2011, the average growing rate of export
turnover of Vietnam garment industry was 21,3%. In 2011,
garment industry used 970.660 employees (equal to 17,8% of
total industrial workers). Most of the garment enterprises are
small based on the labour criterion.
2.2 Current situation of building human capital for garment
enterprises
2.2.1 Assess the organizations which implemented the human
resource training for garment enterprises

is mainly the full-time training in the educational organizations.
2.2.4 Training workers for garment enterprises
2.2.4.1 Training the skilled workers
The specific human capital of skilled workers of
garment enterprises is built by full-time training or by the fact
that they obtained experiences during the working process for
10-15 years.
2.2.4.2 Training the semi-skilled workers
The specific human capital of semi-skilled workers of
garment enterprises is built by participating in the short-term
courses organized in formal educational organizations,
vocational centers or being trained in enterprises.
2.2.5 Building human capital of workers by organizing group
activities
For the past 5 years, building human capital by
organizing group activities in garment enterprises has been
quite popular because garment lines are usually organized
according to the mode “group line”

15
2.2.6 Building human capital of garment enterprises by
forming a knowledge market
Nowadays, in garment enterprises, the perception
that an enterprise must form a knowledge market or must
upgrade data to information capital in order to expand the extent
of human capital is not good.
2.3 Current human capital and quality of human capital of
Vietnamese garment enterprises
2.3.1 Assess the quality of human capital by criterion
Financial investment in education

managers and workers in garment enterprises are lower than the
ones in textile garment enterprises surveyed so the quality of
human capital of garment enterprises is lower than the one of
textile garment enterprises.
2.3.4 Assess the quality of human capital of garment
enterprises by criterion Average earnings
The quality of human capital of garment enterprises
was quite low and its trend was lower and lower for the years
2000 to 2011. In 2000, the average earnings per 1 unit of human
capital of garment enterprises equaled 85,7% in comparison
with the one of industrial enterprises, this gap was bigger and
bigger when in 2011, the average earnings per 1 unit of human
capital of garment enterprises only equaled 74,3% in
comparison with the one of industrial enterprises.
2.3.5 Assess the quality of human capital of garment
enterprises by criterion Increasing rate of earnings
The increasing rate of the average earnings of the
garment industry has been 9,2%/year for the years 2000 to 2011,
the increasing rate of the average earnings of the industry has
been 10,7%/year for the years 2000 to 2011, which is 1,16 times

17
higher than the one of the garment industry. Obviously, the
quality of human capital of garment enterprises is very low.
2.3.6 Assess the quality of human capital of garment
enterprises by criterion Labour productivity
The quality of human capital of garment enterprises is
low. In 2011, one unit of human capital of garment enterprises
only created the labour productivity which equaled 83,4% in
comparison with the one of industrial enterprises. On the other

as : fulltime training in formal educational organizations and
training in enterprises; the enterprise management of enterprise
itself; human capital needs of garment enterprises; circumstance
of family of employees working in garment enterprises;
demography of employees working in garment enterprises;
policies of the government as well as Vietnam textile and
garment association and Vietnam Textile and garment group.
CONCLUSION OF CHAPTER 2
Chapter 2 has assessed the current situation of building
the specific human capital and assessed the quality of human
capital of Vietnam garment enterprises according to 7 criteria
mentioned in chapter 1. During the assessment, the thesis has
shown clearly that the quality of human capital is both good and
not good according to the criteria mentioned and the thesis
found out the causes of that current situation. The thesis has
chosen Garment company 10 as a typical garment enterprise
and uses the criteria above to assess its quality of human capital.
The assessment results helped to confirm the correctness of the
criteria which the thesis proposed to assess the quality of human
capital of garment enterprises and helped to illustrate the picture
of the quality of human capital of a typical garment enterprise
in Vietnam garment industry nowadays.

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CHAPTER 3 : SOLUTIONS TO ENHANCE THE QUALITY OF
HUMAN CAPITAL OF GARMENT ENTERPRISES
3.1 The viewpoints aim to enhance the quality of human
capital of Vietnam garment enterprises
3.1.1 Heighten the garment enterprises’ awareness of roles of
human capital and its quality for the development of enterprises.

so that their training objectives such as knowledge target, skill
target, attitude target are suitable with the demand of enterprises.
Garment enterprises need to improve their system of
training management and make it professional, enhance the
quality of on the job training by analyzing the job of enterprises
and only train according to the job analysis table.
3.2.2Determining optimal strategies to invest in human capital
The big enterprises which have the strong financial
ability should use the strategy of investment in the human
capital whenever remaining the profit. The small and medium
enterprises which the financial ability is limited should use the
strategy of investment in the human capital according to the
benchmarking way. For the investment, garment enterprises
need to pay attention at the suitability between the human
capital and physical capital to avoid wasting the capital.
3.2.3 Solutions to upgrade data to information capital
Garment enterprises need to upgrade data of the job
analysis to information capital, thence making knowledge
products aims to spread rapidly human capital inside enterprises
in order to enhance the quality of human capital.
3.2.4 Solving harmoniously the labour relations in garment
enterprises
Garment enterprises need to comply seriously the
collective labour agreement of Textile Garment industry,

21
enhance the earnings of employees. That help to solve
harmoniously the labour relation inside garment enterprises in
order to enhance the quality of human capital.
3.2.5 Innovating the production organization to enhance the

garment enterprises to build and remain the advantages of
competitiveness in globalization, enhance the business
efficiency and contribute actively to the sustainable
development of garment enterprises. The subject ”Enhance the
quality of human capital of Vietnamese garment enterprises” is
a work on human capital of garment enterprises. The thesis has
found out the new and major results as following :
1. The previous researches on the quality of human
capital have not started from the nature of the quality of human
capital, instead of that, they started from the measurements so
the academic system of these researches is not perfect. To repair
this disadvantage and lay the solid foundation of researching the
quality of human capital, the thesis has developed the definition
of the quality of human capital as following : Quality of human
capital is the degree to which a set of characteristics of human
capital make human capital able to fulfill the proposed or
implicit needs.
2. Based on 4 characteristics showing the quality of
human capital and the features of human capital of Vietnam
garment industry, based on the models and the definition of
human capital developed above, the thesis has proposed 7 new
criteria to assess the quality of human capital of garment
enterprises. Those are : Financial investment in education,
schooling years, number of years of working experience,
average earnings, increasing rate of earnings, labour
productivity, labour turnover.

23
3. Based on the results of the specific researches on the
quality of human capital of Vietnam garment enterprises, the

colleges which belong to equitized enterprises as Vietnam
textile and garment group; in addition, the thesis also proposed
the government to allow to establish the university of the textile
and garment industry.
8. Some opened matters of the thesis which may be
continued to research are :
a- Researching the rate of return of human capital of
garment enterprises.
b- Researching the correlation between the investment
in human capital and the investment in physical capital in order
to create the optimal efficiency for garment enterprises.