India has long been considered the top destination for business process outsourcing (BPO), but recent times have brought changes. According to Nasscom, the Indian BPO industry has experienced its largest employment drop in seven years, and the IT sector has seen increasing unemployment for the second year in a row. As a result, new regions are emerging as strong IT outsourcing hubs, including Vietnam. Despite being a small country in the Asia-Pacific region, Vietnam has a burgeoning technology sector and a talented population that is reminiscent of the early days of Silicon Valley.
Vietnam’s IT outsourcing industry is relatively young, with multinational corporations like Harvey Nash, Intel, and Oracle tapping into the country’s growing tech workforce over a decade ago. The Vietnamese government has invested heavily in STEM education, resulting in a skilled workforce of technologists. Vietnam’s outsourcing industry has been steadily growing, and in 2017, it rose by five places in the Global Services Location Index.
One surprising aspect for Western business leaders is the adaptability of Vietnamese outsourcing providers. Some may assume that they would be rigid due to Vietnam’s socialist and Communist history, but in reality, the Vietnamese workforce is very adaptive and tech-savvy. Vietnam has undergone rapid economic changes, transitioning from an agrarian society to a modern business-driven marketplace. The country joined the World Trade Organization in 2007 and has made efforts to attract Western companies. Vietnamese IT specialists are comfortable working as an extension of global clients, challenging norms, and bringing innovative ideas to the table.
Despite this adaptability, there is a social rigidity in Vietnam due to the importance of loyalty. Vietnamese employees tend to be loyal to their employers, reflecting the cultural emphasis on family bonds. They are not only responsible for their immediate families but also provide support to their extended families. Unlike professionals in India, the Philippines, and Malaysia who often pursue career advancement abroad, Vietnamese professionals prefer to stay close to home.
Vietnam is actively working to cultivate a highly skilled workforce through investments in education and STEM learning. The country is also making progress in gender diversity, with more women than men employed in the tech sector. There are ample opportunities for business process and IT outsourcing in Vietnam, particularly for multinational corporations dealing with large datasets and seeking data cleansing services.
The main challenge for companies outsourcing IT work to Vietnam is adapting to a remote team that may be thousands of miles away. However, this can be overcome through training and effective communication. Establishing common processes and smart communication protocols enables seamless collaboration despite the time and distance. The time zone difference can even be leveraged for productivity advantages, as work can be planned and handed off in a 24-hour cycle.
While India may be facing challenges in the outsourcing industry, Vietnam continues to experience growth. With ongoing government investments in STEM education and the presence of multinational corporations, Vietnam’s workforce and marketplace are set to flourish. In future articles, industry insights from other outsourcing hotspots like Australia and Singapore will be explored.