IT Outsourcing to vietnam: Why It Is A Good Choice?
Last updated: April 01, 2024 Read in fullscreen view
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- Vietnam is a leading global software outsourcing destination, attracting companies from various industries.
- The country is recognized as a Pacific-Asia innovation center, offering affordable rates, outstanding ethics, and successful outsourcing projects.
- Intel, IBM, Samsung Display, and Microsoft have trusted Vietnam since the early days of its IT outsourcing sector.
- Vietnam's demand for IT professionals has quadrupled in the past decade due to its growing popularity as a location for international corporations' software offshoring.
- The worldwide shortage of talented young individuals due to a falling birth rate has led to a mismatch of supply and demand in the software outsourcing industry.
Vietnam is a small country but is a mighty outsourcing powerhouse in the Asia-Pacific.
With the impact of Covid-19 pandemic, businesses want to optimize costs so as to increase their profit. This is where outsourcing comes into play.
However, Why Should You Outsource Software Development To Vietnam?
8 reasons why is IT outsourcing to Vietnam a good choice?
1. Population
The main advantage of outsourcing to Vietnam is its young population. Around 70% of the population in Vietnam is under the age of 35 and around 45% are between the ages of 15 and 35. This means around half of the population is fit for joining the workforce. So the sheer number of people looking for good employment is pretty high. Vietnam also has a literacy rate of 97% which means that almost all of the population ready for employment is also educated.
2. Education Level
In addition to the fact that Vietnam has a pretty high literacy rate, it also has around 280,000 college or university graduates every year. Every year, the education system sends out 280,000 students who are ready and searching for employment. Out of these 280,000 graduates, 30,000 to 40,000 have graduated in the field of Information and Communication technology. They are prime candidates for software outsourcing companies looking for fresh talent.
3. IT Specialized Schools
Companies looking to software development outsourcing companies want graduates who are specifically trained in Information and Communication Technology. There are more than 250 colleges or universities that offer courses in the field of Information and Technology. In addition to this, there are also 187 vocational schools that offer Information and Technology related courses. The students have an opportunity to receive education in subjects that will help them in pursuing a career in software development. So if more companies outsource to Vietnam, more students will decide to take the career path of becoming a software developer.
4. Hard-Working People
Every company needs a workforce that is hardworking and eager to be with the company. Hard-working employees make the company progress faster. They can help finish projects faster. This will, in turn, allow companies to pursue more innovative projects on a tighter timeline. This also allows companies to survive in today’s competitive world. In the world we live in, it has become very important for companies to churn out new technologies faster than their competitors. A hardworking and eager workforce also boosts the overall morale of the company. It also ensures that they inspire each other and work better with each other.
5. Cost Effective
The cost of hiring a developer in Vietnam when compared to the cost of hiring one in America is significantly lesser. You can hire a Vietnamese developer for 90% of the cost of an American developer. Since the main aim of outsourcing is cost reduction and the main location for outsourcing till now has been India, the costs also should be compared to that of an Indian developer. A Vietnamese developer costs 30% less than an Indian developer. So not only does Vietnam have a better literacy rate than most of the other developing countries, it also costs less to outsource to Vietnam than those countries. This is a magic combination for companies looking to outsource, better talent and lower cost.
YOU MIGHT NOT KNOW:
Vietnam software outsourcing rate: US$15 - 30/hour.
Vietnam's low labor costs have made it a popular outsourcing destination for foreign investors and importers. Despite a yearly increase in its minimum wage rates – the new salary ranges this year are between $15 and $30 per hour – it is considered more competitive in the region.
Read Also: Outsourcing Billable Rate at TIGOSOFT
6. Stability
Egypt was a prime location for outsourcing a few years back, but then the unstable political climate in the country set it back. Sri Lanka also has had many internal struggles. Vietnam does not have any instability politically. It has had a stable political climate for the past 30 years with the same party in power. It also has had a stable economic growth. Vietnam’s GDP growth rate is around 7.4%. This is pretty high for its geographic location. Around 90% of the population is Vietnamese and they also do not follow any religion. This means there are almost very little reasons for any ethnic or religious conflicts in the country. Since the region is stable politically, economically, religiously and ethnically, it is also much safer for the western counterparts to travel to Vietnam for training or any other such office related purpose.
7. Big Investors
There are many big players in the tech industry who have already invested in Vietnam. Intel, IBM, Fujitsu, Foxcon and Canon are just a few such names. When more companies invest in outsourcing to a country, the infrastructure in the country also develops accordingly. This makes it even better for more companies to outsource to Vietnam. This is a cycle where more companies outsourcing to a country also makes it easier for more companies to outsource to the country. Since some big players like Intel and IBM have already started outsourcing to Vietnam, they have laid the groundwork and helped set up the basic infrastructure. They have also piqued the interest of the citizens for working in an IT company. Any new company that wants to outsource to Vietnam only needs to exploit this ripe situation.
8. Diverse technical skillsets
Vietnamese engineers’ technical skillsets are various from Backend, Frontend, and Full-stack to Database, and so on, which partly shows their ability to handle multiple projects with different requirements. The major technical skillsets can be listed as follows:
- Backend developers: C, Java, .Net, PHP, Python, NodeJS, Ruby/Ruby on Rails, Pers, Scale, and Goland
- Database: Oracle, SQL, MySQL, PostgreSQL, MongoDB, Redis
- Front end: Angular and ReactJS, HTML, CSS, Javascript, WordPress, and Magento
- Mobile: Android, iOS, Xamarin, Flutter
- Full-stack developer
Moreover, there is a wide range of other positions serving for implementing a project end-to-end such as business analysis, project manager, UI/UX designer, Agile facilitator, etc.
Conclusion
Vietnam offers competitive outsourcing advantages. But it is important to consider a company’s specific needs and requirements before entering into an agreement with an outsourcing service provider in the country.
And if you find Vietnam a promising destination for software outsourcing, let's discover fourteen specific cultural insights into Vietnam software development companies and best practices to work well with them.
Having experience in providing solutions for big clients in the country. TIGO Solutions is a prestigious and reputed choice for companies who want to outsource their software development.
TIGOSOFT is one of the leading firms in outsourcing in Vietnam. With 7 years of experience, we’ve been assisting startups and organizations of all kinds with software solutions. We improve workflow efficiency, address business issues, and aid in acquiring competitive strategy with cutting-edge tech stacks.
We are ready for long-lasting and be well-prepared for any model you pick up. So let’s contact our team of experts if you have any queries or concerns about outsourcing. We’ll be more than pleased to assist you!
We are a global IT outsourcing and consulting company who delivers innovation and sustainable growth with great commitment to quality and satisfactory outcomes. Work with us to go faster and better!
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