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5 Reasons why Choosing Vietnam for IT Outsourcing

In today’s global business landscape, IT outsourcing has become a pivotal strategy for numerous companies. Vietnam has risen as a top destination for this practice, and there are several compelling reasons why you should consider Vietnam for your IT outsourcing needs. So, why should you choose Vietnam for your IT outsourcing projects? Here are 5 reasons!

1. Availability of IT resources

As per TopDev’s estimations, Vietnam has 530.0000 IT engineers and annually produces over 57,000 IT students graduate from 153 IT institutions. 1 This data underscores the extensive availability of tech talents and the flourishing tech industry in Vietnam.

According to the General Statistics Office of Vietnam, the labor force in the working age is 50.5 million2, accounting for about 50 percent of the total population of 99.3 million in 2022. This demographic profile indicates that Vietnam is currently in the midst of the “golden population” phase, characterized by a substantial and high-quality labor force.

2. Skilled IT Workforce

Vietnam boasts a robust education system, with approximately 153 schools and institutions offering a wide array of information technology courses. Vietnam’s skilled labor force has gained international recognition, affirmed by various reports and rankings:

3. Strong Language Proficiency

In contrast to many other Asian languages, Vietnamese employs the Latin alphabet, much like English, which simplifies the process of English language acquisition for Vietnamese speakers. Based on a June 2021 survey conducted in Vietnam by Statista, English emerged as the predominant foreign language, with 86 percent of respondents indicating their engagement4. Parents in Vietnam recognize the importance of early English language education, evident in the fact that in urban areas, children begin learning English as early as the first grade of elementary school, and even in more rural regions, English instruction commences from at least the third or fourth grade.

Moreover, universities in Vietnam set English proficiency standards that students are required to meet, often at a minimum level of B1. This proficiency can be demonstrated through school exams or recognized English certificates such as IELTS, TOEIC, TOEFL. This emphasis on English language proficiency from an early age underscores the value placed on bilingualism in Vietnamese society, paving the way for a workforce that can engage effectively in the global workplace.

Moreover, Vietnamese people are often taught English according to the International English (ELF) standard, a global language that helps them acquire common pronunciation and intonation. Conversely, people in English-speaking countries as their native language may develop a regional accent due to early and frequent language exposure.

4. Economic & Political stability – Supportive Investment Environment

Vietnam operates as a single-party state, characterized by a generally stable political and secure environment. The government’s emphasis on economic development has played a significant role in fostering social stability, preventing major political upheavals. Instances of protests, civil unrest, or military conflicts are infrequent.

Vietnam’s remarkable economic growth and commitment to stability have positioned it as a highly attractive destination for global investors and businesses. This stability is underpinned by the government’s consistent and business-friendly policies, making it an appealing environment for foreign direct investment (FDI).

In addition, Vietnam actively participates in key international trade agreements, including the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) and the European Union-Vietnam Free Trade Agreement (EVFTA). These agreements have not only facilitated trade but also expanded opportunities for investment, granting access to larger markets.

Furthermore, Vietnam has witnessed a substantial influx of investment from renowned global technology and manufacturing giants. Industry leaders such as Apple, Canon, Microsoft, Nokia, Intel, LG, and Samsung have already established their presence. Moreover, reports by Savills (2023) Vietnam indicate that tech corporations from Japan, including Sharp, Nintendo, and Komatsu, as well as companies from Hong Kong like Lenovo, are considering Vietnam as a strategic destination for production.5 This collective interest reflects Vietnam’s growing prominence as a hub for international investment and manufacturing.

5. Cost-Effective Labor

When considering outsourcing options, Vietnam emerges as a financially advantageous choice in comparison to well-established outsourcing destinations such as China, India, and Ukraine. According to World Bank in 2022:6

For instance, if we take software developers, one of the most sought-after roles, as an example, hiring a software developer in Vietnam is notably more cost-effective than in other countries across the Asia-Pacific and Western regions. Vietnamese developers typically charge hourly rates ranging from $20 to $40, contingent on their skill level. When compared to the steep $100 hourly wage prevalent in industrialized countries, this represents a substantial cost advantage for enterprises in the United States and Western Europe.

Have we missed any key points or details? Feel free to comment below and let’s discuss!

References

  1. TopDev (2023). VIETNAM IT MARKET REPORT 2023. [online] Available at: https://topdev.vn/bao-cao-thi-truong-it-viet-nam-topdev-2023 ↩︎
  2. en.baochinhphu.vn (2023). Workers’ average income in 2022 surges. [online] en.baochinhphu.vn. Available at: https://en.baochinhphu.vn/workers-average-income-in-2022-surges-111230110154233728.htm#:~:text=VGP%20%2D%20The%20average%20monthly%20income. ↩︎
  3. Businessinsider, finanzen net (n.d.). The 5 Best Countries To Outsource To In 2019 – Plus, The Top 14 Outsourcing Companies & Data Entry Agencies. [online] markets.businessinsider.com. Available at: https://markets.businessinsider.com/news/stocks/the-5-best-countries-to-outsource-to-in-2019-plus-the-top-14-outsourcing-companies-data-entry-agencies-1028079868. ↩︎
  4. Statista. (n.d.). Vietnam: popular foreign language to learn among people 2021. [online] Available at: https://www.statista.com/statistics/1248183/vietnam-popular-foreign-language-to-learn-among-people/#:~:text=Most%20learned%20foreign%20languages%20among%20Vietnamese%202021&text=According%20to%20a%20survey%20conducted. ↩︎
  5. www.savills.com.vn. (2023). Vietnam Quarterly Market Report QMR H2 2022. [online] Available at: https://www.savills.com.vn/services/research/vietnam-quarterly-market-report-qmr-q4-2022.aspx [Accessed 9 Nov. 2023]. ↩︎
  6. World Bank Open Data. (n.d.). World Bank Open Data. [online] Available at: https://data.worldbank.org/indicator/NY.GNP.PCAP.CD?end=2022&start=2020 [Accessed 16 Nov. 2023] ↩︎