Why is Vietnam's outsourcing company popular in the world?
Vietnam's software outsourcing industry has been gaining in popularity fast during the last 10 years. The global tech community depends on Vietnam to get quality software solutions at affordable prices. Being one of the best outsourcing destinations in Asia, Vietnam perfectly meets the expectations of a large number of international companies.
In recent years, the software outsourcing industry has emerged as a significant economic force in Vietnam. With over 6000 IT companies, this small Southeast Asian country is a major player in the global IT outsourcing market.
Let’s look at the key benefits that attract foreign companies to Vietnam for software development and business process outsourcing.
Save cost
The availability of skilled tech talent at low costs is one of the primary benefits of outsourcing to Vietnam. The rates are significantly lower than in the United States or other popular outsourcing locations such as China or the Philippines.
According to CIO magazine, outsourcing software development to Vietnam could save foreign companies nearly 90% of their costs. Hiring a senior developer in the United States, for example, costs around $65-$130 per hour, whereas hiring a Vietnamese developer costs only $20-$45 per hour.
Furthermore, Outsource Vietnam (an outsourced agency) estimates that the cost of outsourcing software development to Vietnam is nearly one-third that of India.
As a result, MarketInsider ranked Vietnam fifth among the "best countries to outsource" globally (2019.)
A young and well-educated population
According to Statista, Vietnam's working population was approximately 74.3 million in 2020, with 40-45% of the population under the age of 35. Vietnam is also one of the Asia Pacific countries with the highest adult literacy rate (95.4%).
The country has around 1900 vocational training centers to keep its young population employable.
Furthermore, in response to the growing demand for software development outsourcing, the Vietnamese government has prioritized engineering and science excellence.
Today, more than 250 universities and 187 technical schools in Vietnam provide technical training in various programming languages. As a result, Vietnam receives approximately 400,000 IT engineering graduates and 50,000 IT students each year from its institutions.
That means the country is well prepared to meet the skilled workforce demands of employers looking to outsource to the country.
Economic and social stability
In comparison to other Southeast Asian countries, Vietnam is more sociopolitically stable. The Global Peace Index 2020 ranked Vietnam 12th as the safest country in the Asia Pacific region.
This means that foreign firms can expect to conduct business in this country without fear of major conflict or unrest. Vietnam's economy has also expanded and thrived over the last two decades.
A favorable investment environment
Vietnam's new free trade agreements with the European Union and the United States, as well as its robust IT infrastructure, improved logistics, lower labor costs, and young labor force, have made the country a magnet for Foreign Direct Investment (FDI.)
Over the last decade, Vietnam has attracted a whopping USD 143 billion in foreign investment (2010-2019). In addition, it was ranked 70th out of 190 countries in the Ease of Doing Business in 2020.
According to trading economics, foreign investment remains strong, with USD 2.68 billion injected into the economy in January-February 2022 (a 7.2% increase over the previous year). Singapore continues to be Vietnam's most important source of FDI, followed by South Korea and China.
Furthermore, the Vietnamese government has introduced Resolution 55, which aims to attract USD 50 billion in foreign investment by 2030. The resolution seeks to amend regulations that impede foreign investment and to codify quality, efficiency, and environmental protection criteria.
The presence of big IT companies
Several multinationals and technology behemoths have already established a strong presence in Vietnam by outsourcing software product development, application development, and other IT support services. Intel, Microsoft, LG, and Samsung are among these companies.
IBM, Sony, Cisco, Bayer, and other companies are expanding and outsourcing IT roles to Vietnam.
These names alone demonstrate Vietnam's ability to handle large outsourced or offshore software development projects.
WATA has been recognized as one of the top outsourcing companies in Vietnam by the Sao Khue Award 2022 and has been a trusted partner to clients from the United States, Singapore, Korea, and Japan since its inception. Allow us to hear your voice and collaborate!