Mr. Victor Vautrin, Business Development Director at RemoteResources, explains why the opportunities in Vietnam for IT Outsourcing are many.
As businesses grow bigger and more competitive day-by-day the search to find an effective solution to cut costs and expenses has never been more urgent. These days, offshore outsourcing has been chosen as the go-to cost-saving strategy for businesses of all sizes, as it allows them to cut down a large part of their expenditure on wages and management costs while still being able to benefit from high-quality talent around the world.
Many Asian countries have become significant players in the outsourcing industry since it found favor among big business owners. Due to rising costs and alarming attrition rates in popular off-shoring countries like India and China over recent years, Vietnam is now thought of as the most attractive alternative destination for overseas investors, especially for businesses operating in IT-related industries.
Vietnam’s reputation for outsourcing potential is not new; the country received a “Good” rating from US IT company Gartner in 2010 and secured a place on their list of Top 30 countries for offshore services.
So what has made Vietnam’s outsourcing industry so special and appealing to foreign investors compared to other countries in the region? Let’s take a look at some reasons why it will pay for your business to invest in Vietnam.
According to statistics, labor costs in Vietnam are 90 per cent less than those in the US, which equals significant cost savings for your business. The cost of hiring labor in Vietnam remains notable when compared to other outsourcing destinations. China and India used to dominate in the cost-savings department when it came to off-shoring outsourcing, but the top spot has been taken by Vietnam over recent years.
Each year Vietnam produces more than 15,000 university graduates, 10,000 college graduates, and a vast amount of talented and skilled experts from various vocational institutions around the country. These graduates are more than capable of keeping up with the demand for professionals from foreign organizations, especially in IT-related fields, as 80 per cent hold science degrees or degrees relating to science. Plus, many businesses operating in Vietnam have commented on its workforce as being very “keen on learning”. Moreover, turnover rates are surprising low, at less than 5 per cent, compared to other Asian countries where turnover rates range from 10 to 20 per cent.
English is taught in Vietnam’s schools from the first grade and most university and college graduates can use English with professional proficiency. Businesses who want to outsource their projects offshore but are afraid of language barriers can feel safe when choosing Vietnam as their destination.
Investor-friendly business environment
The Vietnamese Government try their best to introduce tax policies and laws that encourage sectors such as health, education, high-tech, and infrastructure development, etc. to attract more foreign direct investment (FDI). For example, businesses operating in preferential sectors can benefit from corporate tax exemptions for the first four years of operation.
Vietnam’s stability in terms of politics, society, and economics is rated very highly. The country also has laws protecting intellectual property rights.
It may still be early days for Vietnam’s offshore outsourcing industry but with the country making great changes to improve the quality of its workforce and upgrading its infrastructure, businesses that choose Vietnam as their destination for outsourcing can rest assured that their investment will definitely pay off in the near future.
RemoteResources is an offshore staffing provider specializing in setting up, hosting, and managing offshore staff and operations for clients from all over the world. It is a multinational company with offices throughout Australia and Asia and a Vietnam head office at Kumho Asiana Plaza in Ho Chi Minh City.