Vietnam has built a strong reputation for high-performing software talent. Vietnam developers ranked third in the AI category worldwide on the skill-assessment platform HackerRank. Heavyweight companies such as Boeing and BMW have recognized its importance and cultivated their tech capabilities in this top-performing Asian economy during the pandemic.
According to TopDev’s 2021 Vietnam IT Market Report, Vietnam is home to about 430,000 IT engineers. The same report estimates that the country produces 55,000 IT graduates every year. Competition both locally and globally for the best talent remains fierce even as that number continues to grow.
Here’s what you’ll need to know to successfully hire developers in Vietnam to scale your business.
Your software development company can use many different methods to recruit and hire employees in Vietnam. Before engaging with a third-party talent provider, define what you’re looking for when hiring developers in Vietnam. Consider factors such as skills and experiences, years of experience and even English proficiency.
With a clear idea of the type of talent you need and how many employees you’re looking to hire, you can determine which recruitment solutions work best for your needs.
Traditional staffing agencies based in Vietnam can help you scale your tech talent pipeline there quickly. They tend to be well-connected with universities and other sources of highly trained, highly skilled professionals.
However, while traditional outsourcing companies will help you find talent, they won’t help you manage the complexity of adhering to Vietnamese labor and employment laws.
Companies interested in hiring in Vietnam may invest in a subsidiary that establishes a legal entity in the country. To open a subsidiary in the country, U.S. employers must establish the company with investors and then work with local agencies or schools to recruit high-quality talent. In this arrangement, your company’s HR team is fully responsible for managing all HR operations, including maintaining compliance with local employment laws and regulations.
Opening a subsidiary in Vietnam is a good option if you want to expand your market to South East Asia. However, it may not be a good option if you're simply looking to leverage the tech talent Vietnam has to offer to scale your presence in the U.S.
Many organizations choose to work with an employer of record (EOR), which is a company that can employ workers on your organization’s behalf via a special service agreement. When working with an EOR, you do not have to open a legal entity in the country.
Because an EOR is the legal employer of your workers, it can seamlessly hire and manage workers in Vietnam on your behalf. In addition to taking on administrative tasks, such as managing payroll and benefits, an EOR also assumes liability for complying with Vietnamese labor laws so your organization doesn’t have to.
When identifying a good employer of record for your needs, consider their reach in the region, their expertise in a wide range of local employment laws and their track record of placing and managing top tech talent.
For many companies, a big part of the appeal of hiring software developers in Vietnam is the potential for cost savings, since expected web developer salaries in Vietnam are significantly lower than in the U.S.
The average salary for Vietnamese developers in Ho Chi Minh City, for example, is ₫28M per month, which translates to a little over $1,200 per month in USD. This is a tremendous cost savings compared with U.S. based developers, who command a much higher salary at an average of $97,224 per year (about $8100 per month) for the same role.
Based on salary differences, hiring developers in Vietnam can enable you to scale high-quality software production at a fraction of the cost of domestic talent alone. However, those cost savings will also come with some expectations around holidays and sick leave that are more generous than what U.S. employers typically provide.
For example, Vietnamese law requires employers to provide 12 paid days of annual leave and the 11 public holidays recognized by the government, including National Day, which may be observed with two days off.
Employers must also offer paid sick leave to their Vietnamese employees. The exact number of days are calculated by how many hours people work, as well as their working conditions.
You will be able to focus on managing projects and task flows while your EOR partner manages global payroll, benefits, time-off, logistics, and compliance.
When it comes to employment relationships in Vietnam, employers need to familiarize themselves with Labor Code 2019, which went into effect in January 2021. The new labor code updates existing laws surrounding the hiring and employment of Vietnamese workers.
The first update changed working hours for Vietnamese workers. Past laws limited Vietnamese workers to working 48 hours per week. This rule remains, but the new provisions also require workers to create a plan with their employers should they wish to work more than those 48 hours per week. According to the Labor Code, overtime cannot exceed more than 40 hours a month, or 200 hours in a year.
The next update limited the types of contracts Vietnam will now recognize when U.S. employers hire workers to fixed-term and indefinite-term employment (or open-ended) contracts. A fixed-term employment contract specifies the signees to a maximum of three years of employment. Employers and employees can sign two fixed-term contracts in succession, but after that they must enter into an indefinite-term employment contract to continue the working partnership.
As the legal employer, an employer of record can manage many of these aspects of the employment contract process for you.
Access to top talent at an affordable cost enables you to scale your business in the U.S. The difference between web developer salaries in Vietnam versus the U.S. frees up significant capital that you can devote to growth. And having a highly qualified team of developers in a growing Southeast Asian market opens opportunities for future global growth.
You can hire from everywhere and succeed anywhere with Worca’s Core HR Service Bundle localized by country. Your end-to-end employer of record (EOR) solutions easily and compliantly hire international talent is call or email away.
