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IT outstaffing in Vietnam has become a top choice for businesses seeking efficient and cost-effective staffing solutions. Vietnam offers highly skilled professionals, competitive pricing, and a thriving tech scene, making it an ideal destination for outstaffing. According to the Economy Southeast Asia Report, Vietnam's digital economy is expected to reach $50 billion by 2025 and could surpass $200 billion by 2045, growing at an annual rate of 10%. In 2023, Vietnam's ICT market was valued at USD 8.30 billion and is projected to grow at a CAGR of 8.31%, reaching $13.32 billion within the next five years.
According to a report by Emerging COVID-19 Success Story from Our World in Data, Vietnam is among the top countries least affected by and recovering quickly from the COVID-19 pandemic. The country's economic growth remained stable during and after the pandemic. While many nations struggled to maintain economic growth, Vietnam recorded positive GDP growth rates of 2.9% in 2020 and 2.6% in 2021. This reflects the stability and resilience of Vietnam's economy. Vietnam's GDP growth is projected to reach 5.5% in 2024.
Vietnam is considered a safe and stable investment destination, attracting numerous new investment projects. The country's deep integration into regional and global economies is particularly notable. Vietnam has signed and implemented multiple Free Trade Agreements (FTAs). With 16 FTAs already signed and 3 under negotiation, Vietnam is a crucial "intersection" and "link" in global and regional supply chains, ranking as one of the top 20 economies with the largest trade scale in the world.
The Covid-19 pandemic has brought about profound changes in the global software outstaffing industry. Previously, companies primarily focused their outstaffing efforts on a few major countries like India and China. However, the pandemic has highlighted the need to diversify outstaffing destinations to mitigate risks and ensure supply chain continuity.
One of the significant changes is the increased demand for software outstaffing services from other countries, including Vietnam. Vietnam has quickly adapted to the new situation, demonstrating the ability to provide high-quality services at competitive costs. Economic stability and effective pandemic control have made Vietnam an attractive outstaffing destination, drawing the attention of many global businesses.
Leading technology companies have begun expanding their operations in Vietnam, leveraging the abundant workforce and developed technology infrastructure. This shift not only helps mitigate risks from relying on a few countries but also opens new opportunities for Vietnamese businesses to participate in the global supply chain.
Furthermore, the shift in software outstaffing, including IT outstaffing in Vietnam, has driven the development of the tech ecosystem in Vietnam. Numerous startups and tech companies have emerged, contributing to the industry's growth and innovation. The Vietnamese government has also implemented various supportive policies, encouraging investment in technology and software outstaffing, creating favorable conditions for the sustainable development of the sector.
One of the biggest advantages of IT outstaffing in Vietnam is the quick time to hire. According to TopDev's 2023 report, around 530,000 professionals are working in IT and related services. With such a large pool of qualified IT experts, businesses can quickly find and onboard the talent they need. Vietnam's universities and technical schools consistently produce graduates with strong technical skills and expertise, ready to join the workforce. At present, some 50,000 to 57,000 students are taking up courses in these technology-oriented fields.
The large pool of talent allows companies to easily and quickly fill their open positions. Whether it is the need to scale a project up, or for that matter an urgency in requirements in the face of a critical task, the rapid hiring process in Vietnam ensures your projects kick off on time and are taken through to completion. This capability to onboard quickly skilled professionals in your team means reduced downtime and speeding up project timelines, thus giving your business a significant competitive edge.
One of the most compelling advantages of IT outstaffing in Vietnam is the competitive labor cost. The cost of living in Vietnam is significantly lower compared to Western countries, which directly translates to lower wages for highly skilled IT professionals. Typically, Vietnamese IT professionals charge between $20 to $40 per hour. This financial advantage allows companies to drastically reduce their operational expenses while still accessing top-tier talent.
An economy in Vietnam means that companies will be able to maintain high-quality output without the expensive pricing that has become a standard feature in most other high-quality markets. This plays well for startups and SMEs, which need to scale their operations without extending the budget too much. On the other hand, it provides a level of transparency of labor costs in Vietnam that is essential for easy financial planning. Budget with confidence, knowing that there will be no hidden or unexpected fees. Financial clarity simplifies budgeting and allows businesses to allocate resources more effectively, with the assurance that what is spent can be directly attributed to ensuring project success.
Vietnam boasts a highly skilled workforce known for its technical proficiency and strong work ethic. The country's robust emphasis on education, particularly in science, technology, engineering, and mathematics (STEM) fields, has cultivated a generation of IT professionals who excel in their fields. In all, Vietnam has more than 250 universities and 187 technical schools covering IT education. According to TopDev, over 50,000 IT graduates enter the workforce annually. This rigorous academic training ensures that these professionals are not only technically competent but also adept at critical thinking and problem-solving, making IT outstaffing in Vietnam a highly attractive option.
Vietnamese Education Background in Technology (2022 vs 2023)
Moreover, Vietnamese IT professionals are committed to continuous learning and professional development. They frequently participate in international conferences, workshops, and certification programs to stay updated with the latest industry trends and technologies. This dedication to lifelong learning means that they can quickly adapt to new tools and methodologies, providing businesses with the flexibility needed to stay competitive in a rapidly evolving tech landscape.
Additionally, the ability of Vietnamese IT professionals to work seamlessly with international teams is a significant asset. Many have experience working with global companies and are comfortable navigating cross-cultural environments. Their proficiency in English and other languages facilitates smooth communication and collaboration, ensuring that projects run efficiently and effectively. A report by EF Education First (2023) ranks Vietnam 58th out of 100 countries in the EF English Proficiency Index, with consistent improvements each year.
According to the Vietnam Software and IT Services Association (VINASA), the country’s IT industry has grown by an impressive average of 25-35% annually over the past decade. This remarkable growth is fueled by the ability of Vietnamese IT professionals to deliver high-quality services that meet international standards. The rapid development of Vietnam's IT sector has positioned the country as a formidable player in the global market, showcasing the high standards and technical competence of its workforce.
Furthermore, outstaffing Vietnamese IT professionals has proven to be a strategic advantage for many of the biggest names in the tech industry. Companies like IBM, Intel, and Samsung have established significant operations in Vietnam. These bigwigs of the industry are attracted by the talented workforce that the country holds in addition to its rich IT infrastructure. This investment reflects the faith that the captains of the industry have in the IT talent of the Vietnamese folks. The IT professionals in the country can effectively work with these global majors due to their capability to bring in results, adaptability, and the high standards they maintain in their professional life. This ability to collaborate with the world's industry leaders not only testifies to the outstanding quality of IT talent in Vietnam but also underlines the growing reputation of this country as a global tech hub, solidifying the benefits of IT outstaffing in Vietnam.
The IT ecosystem of Vietnam is on a fast, aggressive rise, with the help of several governmental initiatives and huge private investments. Major cities in Vietnam, such as Ho Chi Minh and Hanoi, are becoming vibrant tech hubs that have become catalysts for innovation and collaboration. This is mainly done due to the strategic policies that the government has implemented in order to promote the growth of the sector. These include friendly tax policies, business regulations that are easy to deal with, and heavy investment in infrastructure.
In addition, the involvement of the private sector, where most multinational companies have been investing in the local talent, further adds to the skill and expertise of Vietnamese IT professionals. Companies can access top technology and a dynamic community of tech experts from around the world. Emphasis on STEM education and constant reforms ensures a steady supply of well-trained IT professionals in Vietnam, further bolstering the case for IT outstaffing in Vietnam.
Consequently, Vietnam, in combination with an active government role and private investment on a high scale, holds immense potential for the development of the IT outstaffing ecosystem. This offers access to top-tier talent, cutting-edge technologies, and a strong community toward innovation and competitiveness in the global marketplace.
Although there are quite several advantages to doing IT outstaffing in Vietnam, here are some of the challenges that companies need to overcome if the partnership is to be successful.
Communication Challenges: Differences in language and communication styles can create misunderstandings and hinder effective collaboration.
Cultivating Cultural Sensitivity: Different work cultures and a lack of cultural awareness among teammates can create friction and misunderstandings
Integration with In-House Teams: These disparities in workflow and issues in building unity can result in inefficiencies and reflect upon the performance of the team..
Legal and Compliance Concerns: Navigating local laws and aligning with international standards is complex and requires careful management.
Security Risks: Protecting sensitive data and mitigating cybersecurity threats are critical concerns with remote teams.
Turnover and Retention: High turnover rates disrupt projects and increase costs, making it essential to maintain job satisfaction and retain talent.
See more: 6 IT Outstaffing Challenges and The Guide to Overcome Them Easily
Outstaffing to Vietnam offers businesses the opportunity to optimize their IT operations. With a stable environment, skilled workforce, competitive costs, and a growing IT ecosystem, Vietnam is an ideal destination for IT outstaffing. Companies can address challenges related to communication, scheduling, legal compliance, and quality control by leveraging IT outstaffing in Vietnam, maintaining their competitive edge.
Rabiloo is one of the leading technology companies in Vietnam, providing businesses all over the world with high-quality IT outstaffing solutions. All its software engineers are experienced, and many of them have specific knowledge in various technologies. Let Rabiloo assist in exploring and harnessing the full power of IT outstaffing in Vietnam to bring groundbreaking value to your business.
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