Why should you outsourcing to Vietnam? Top 5 Reasons
By: Speranza
Tags: Offshore Development, It, Speranza, Vietnam, Outsourcing

1. Stable politics, promising economy

Thanks to being a country led by a single party, Vietnam has a stable political background, Risk of terrorism, ethnic and religious instability is something you won’t find in Vietnam, Stable society is the foundation for the country to realize its economic determination. The Communist Party of Vietnam has set a target that by 2045, Vietnam will become a developed, industrialized nation with high incomes [7].

The government of this country wants to catch up with the industrial revolution 4.0, so they have developed a national strategy on research, development, and application of Artificial Intelligence [8]. By 2030, Vietnam aims to become one of the four leading countries in ASEAN and among the top 50 countries in AI globally. The Vietnamese government itself also clearly sees benefits from the way businesses have foreign investment. They issued Decree 29 in 2019 to facilitate labor outsourcing [9]. Accordingly, the term of the work permit is increased from 36 months to 60 months, removing the 12-month restriction on hiring outsourced employees, and increasing the number of jobs that are allowed to be outsourced.

Vietnamese Prime Minister Nguyen Xuan Phuc experienced ordering food with Misa, a robot integrated with artificial intelligence, on January 15, 2019. Source: vietnamnet (https://vietnamnet.vn/vn/cong-nghe/thu-tuong-nguyen-xuan-phuc-tham-trien-lam-cac-san-pham-cong-nghe-make-in-vietnam-502874.html)

These actions show that the Vietnamese government attaches great importance to maintaining social stability and developing the country’s economy. This is also what has been repeatedly affirmed in the COVID-19 prevention and control strategy, which is “both to prevent and control the epidemic, and to promote production and business”. This is also the reason that helps Vietnam suffer less damage from the epidemic but still increase GDP by 2.9% in 2020 [10], one of the highest growth countries in the world.

2. Great human resources for the software industry

According to TopDev’s 2021 report [11], Vietnam currently has about 430,000 software engineering engineers and 55,000 software graduates every year. Highly qualified Vietnamese programmer, ranked 5th by Kearney Global Services Location Index 2019 and 18th in the Tholons Top 100 Outsourcing Destination 2016. Nearly 55% of developers in Vietnam are between the ages of 20 and 29 [11]. The survey from TopDev on the age of developers will give you a full picture of the youthfulness of the majority of developers.

Infographic made with Infogram. See details at: https://infogram.com/age-developers-in-vietnam-in-2021-by-topdev-1h7j4dv0erqev4n?live

More and more Vietnamese are assessed as capable of learning many new technologies, well-trained, professional manner, able to compete fairly with engineers in other countries.

3. High-quality technical education

Figures from TopDev 2020 show that there are more than 153 information technology training schools. TopDev also said that 70% of programmers are educated at universities and colleges. This shows that most programmers in Vietnam are well trained. Recently, the Ministry of Information and Communications of this country has approved a draft of the development orientation of the information and communication industry to improve the level of human resources in the software field of this country. In fact, so far, there are some Vietnamese students have demonstrated their ability to reach out to the world. In 2020, a group of 4 students from the University of Technology — Vietnam National University Ho Chi Minh City, became one of the 10 winners of the Google Solution Challenge 2020 [12]. They created the Shareapy application to help support online psychology. This shows that talent in the software field can always be found in Vietnam.

Students from Vietnam present Shareapy at Demo Day. Source: Google Developers (https://youtu.be/63RTBxRyFX8)

4. Labor costs are lower than in industrial countries

Vietnam has an abundant labor force, meeting the demand for high qualifications. People in the software sector in Vietnam have better wages than other fields, but their incomes are still lower compared to other countries, especially compared to industrial countries. This gives Vietnam the advantage that labor costs are much cheaper than in industrialized countries like the US, and among the lowest in the world. To make it easier for you to imagine, we have created an infographic comparing the income of some positions in the software field between the US and Vietnam.

Infographic made with Infogram. See details at: https://infogram.com/comparing-developer-salary-by-positions-between-us-and-vietnam-in-2021-1ho16vogv0qjx4n?live

Some positions are about 3 times different, some are more than 10 times. It shows that Vietnam’s labor cost advantage is still very attractive but may not be in the future.

Not only labor costs but warehouse operating costs in Vietnam are also among the lowest in the world [13]. Savills conducted research in 21 countries with 54 cities. According to Savills, warehouse operating costs in Hanoi and Ho Chi Minh City are the lowest in the world. Savills assesses that the boom in e-commerce drives warehouse demand in the majority of the market. The increasing pressure on warehouses makes this also an advantage of Vietnam in attracting investment.

5. English is not a barrier for Vietnamese people and Vietnam is a convenient location

More and more foreign companies are setting up headquarters and recruiting Vietnamese employees. This leads to increasing demand for English communication among Vietnamese employees. They have constantly improved their communication skills so that English is not a barrier in the working process. In Vietnam, English is taught from grade 1. To graduate from university, almost all schools in Vietnam require an international English certificate to ensure students’ ability to work in English. Therefore, you do not need to worry about communication problems with IT engineers in Vietnam. This should be mentioned with another advantage, which is Vietnam’s favorable position in the trade. It only takes you a few hours to get from Ho Chi Minh City to the tech hubs of Asia. Currently, direct flights are established between Vietnam and the US, Vietnam, and Europe, allowing you to travel directly to these places in less than a day.

Original Content: https://www.speranzainc.com/why-outsourcing-to-vietnam-5-reasons-you-should-do-it/

Source:

[7] https://vietnamnews.vn/politics-laws/870284/13th-national-party-congress-sets-out-bold-path-to-prosperity-for-viet-nam.html

[8] http://www2.chinhphu.vn/portal/page/portal/chinhphu/noidungchienluocphattrienkinhtexahoi?_piref33_14725_33_14721_14721.strutsAction=ViewDetailAction.do&_piref33_14725_33_14721_14721.docid=5058&_piref33_14725_33_14721_14721.substract=

[9] http://vanban.chinhphu.vn/portal/page/portal/chinhphu/hethongvanban?class_id=1&_page=1&mode=detail&document_id=196496

[10] https://www.gso.gov.vn/du-lieu-va-so-lieu-thong-ke/2021/01/kinh-te-viet-nam-2020-mot-nam-tang-truong-day-ban-linh/ [

11] https://topdev.vn/page/bao-cao-it-viet-nam#2021

[12] https://developers.googleblog.com/2020/07/dsc-global-students-solutions-with-code.html

[13] https://e.vnexpress.net/news/business/industries/vietnam-has-lowest-warehouse-operating-costs-4256600.html