Starting an offshore Technology Team in Vietnam

Building an offshore tech team might be the answer when you encounter a shortage of tech talent to hire.

At the start of the year, Cogs was appointed to support a Singapore-based Fintech company, in building a new 10-person Software Engineering and Development team in Ho Chi Minh City, Vietnam.

We are in contact with businesses who are exploring building technology capability in Vietnam and Ho Chi Minh City is fast becoming a preferred choice to build outsourcing hubs within Asia. Besides the cost factor, it is undeniable that there is a growing supply of skilled developers here and the city is also one of ASEAN’s most attractive locations for international talents.

As part of the engagement, we spoke to over 200 developers with skills in front and back-end technology. From this project, we have gained insights into local talents which have helped us to better understand the local market.

Job-hopping is the new normal

Job-hopping is common in the Vietnamese employment market. It is seen as a way to fast-track career prospects and to negotiate for higher income. Among the candidates, local companies are perceived to offer a lower salary package as compared to foreign firms; this may be a contributing factor to switching jobs frequently. However, as there is presently a surplus of jobs in the market, we expect salary brackets across different levels to rise in Vietnam. In relation to the excess of jobs, it’s anticipated that people will move about to seek new opportunities in order to find a better, long-term employment. It’s noteworthy to mention that while on the lookout to fill in developer roles for our client, we observed a number of developers taking on freelance projects as an additional source of income to supplement their existing salary.

Salaries

When it comes to salary expectations, candidates across the board have a tendency to quote their monthly salary expectation in US dollars and in nett. Whereas, international companies (particular those new to the market) would prefer to use the term ‘gross salary’ which leads to confusion among the local candidates. In comparison, the salaries of local developers are between 40-60% of that earned in more developed markets such as Singapore or Hong Kong. That being said, there is a sense of disparity among the local and foreign companies and employees. Because local companies pose tendencies to suppress wages as compared to international ones, a foreign developer in Vietnam may be earning more than their local counterpart. The reason being, hiring companies hold an assumption that an expatriate developer brings on board with them a foreign education which leads to more refined skill set. However, in reality, the only difference between foreign and local candidates might simply be fluency in the English language. Aside from the language factor, the technical hard skills held by local developers are actually rather advanced. The crème de la crème of talent developers are mostly found working on global projects and regardless whether they are locals or expatriates, they are earning their worth and much more than the rest of their talent pool. The Vietnamese job market is dynamic and we expect that with more companies setting up, salaries will increase.

The city and your office location

Ho Chi Minh City is the largest city in Vietnam. It can be charmingly chaotic with the estimated 7.5 million motorbikes on the road (and pavements!). A 15km distance could easily end up being a 45-minute drive, depending on your mode of transportation. This means for candidates that distance between home and work could be an important decision factor to even proceed with a job application for some.

English-first work environment

Though English is taught in state schools and is part of the local education, Vietnamese is still the primary language used in the country. If your business is trying to develop into an English-first environment, it can be both a push or pull factor for a local developer to consider in joining your company. Developers who are not confident or comfortable enough to communicate in English, often tend to shy away from such opportunities. Contrary, there is also a group of candidates who prefer an English-first work environment as a way to improve their grasp of the language.

These are just a few of the insights we have gathered through completing this project with our client. If you are considering to expand your current tech team or venture into Vietnam, feel free to reach out at [email protected] or give us a ring at +65 6597 0905. We are always more than happy to connect and share more information and insights on finding the right people to drive your digital transformation.

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