S3Corp. Tech Blog

For years, India dominated as the world’s top business process outsourcing (BPO) hub, but global outsourcing dynamics are shifting. According to trade association Nasscom, India’s BPO industry just experienced its largest employment drop in seven years, and its IT sector reported a second consecutive year of increasing unemployment. As India adapts, emerging regions, particularly Vietnam, are gaining ground as competitive IT outsourcing hubs.

A Young but Growing Industry: The History of Global IT Outsourcing In Vietnam 

IT outsourcing in Vietnam is relatively young, emerging around a decade ago when global corporations like Harvey Nash, Intel, and Oracle recognized its potential. Government investment in STEM education and policies supportive of foreign tech business fueled the industry’s growth, creating a skilled, cost-effective workforce that has quickly become a competitive alternative to India. Vietnam’s ascent is clear; it moved up five places in A.T. Kearney’s 2017 Global Services Location Index, reflecting its growing appeal for technology outsourcing. Major players like Intel, IBM, Samsung, Nokia, and Microsoft have invested heavily, amplifying Vietnam’s presence in the tech landscape.

Western Expectations and Vietnamese Adaptability

Western business leaders often expect Vietnamese outsourcing providers to exhibit a rigid approach, shaped by misconceptions of a socialist republic. Yet, Vietnam’s IT workforce is remarkably adaptive and innovative, capable of aligning quickly with the operational goals and values of global clients. After joining the World Trade Organization in 2007, Vietnam made significant strides in creating a business-friendly environment, positioning itself as a reliable partner for Western companies. Vietnamese tech specialists are open to new ideas and accustomed to changing demands, making them strong assets for firms needing agile, collaborative teams. Furthermore, with a national push to improve English proficiency, Vietnam is making integration with global clients even smoother.

Cultural Loyalty and Workforce Retention

Loyalty, deeply embedded in Vietnamese culture, extends into the workplace. Vietnamese employees often stay committed to quality employers, driven by cultural expectations to support extended family. Unlike professionals in India or the Philippines who frequently relocate for career opportunities, Vietnamese tech experts tend to stay local, providing companies with greater workforce stability and reducing the costs and disruptions associated with turnover.

Workforce Development and Gender Diversity

Vietnam is investing in a high-caliber workforce through a strong commitment to higher education and STEM. Institutions like Cornell University are consulting on university development in Hanoi, and Fulbright University is establishing a campus in Ho Chi Minh City, ensuring a steady flow of skilled STEM graduates. Gender diversity is another notable feature; Harvey Nash’s Vietnam operations report a balanced representation of women, who hold leadership roles and promotions on par with men.

Opportunities and Remote Collaboration

Vietnam excels in both IT outsourcing and BPO services, attracting companies from sectors like financial services, media, gaming, and emerging fields such as AI, machine learning, and blockchain. Yet, Western companies often face a key challenge in managing teams located thousands of miles away. Effective outsourcing with Vietnam requires strategic communication and planning, using the timezone difference as a productivity asset. Companies should design workflows so that offshore teams’ progress aligns seamlessly with in-house operations, enabling a near-continuous cycle of development and testing.

The Future of Outsourcing in Vietnam

As India encounters obstacles, Outsourcing Vietnam industry continues to expand. Sustained investment in education and ongoing partnerships with multinational corporations will be crucial for Vietnam to maintain its competitive edge. In the coming years, as Vietnam reinforces its position, it’s set to become a core player in the global outsourcing landscape, offering an agile, skilled, and reliable workforce for the world’s IT needs.