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Vietnam is quickly gaining popularity as an outsourcing destination, attracting businesses worldwide with its talented workforce and cost-effective solutions. With a focus on IT and BPO sectors, Vietnam is emerging as a significant player in the outsourcing industry, competing with established powerhouses like India and the Philippines.

Numerous international companies have opted to outsource in Vietnam, showcasing a growing trend among businesses to explore this Southeast Asian nation for their outsourcing needs.

In this comprehensive guide, we will delve into the intricacies of outsourcing in Vietnam, covering salary trends, top industries, and effective strategies for managing remote teams. 

Additionally, we will discuss how Insightful’s employee monitoring software can aid you in efficiently overseeing your outsourced workforce.

Understanding the Vietnamese Dong: A Quick Currency Comparison

When outsourcing, one of the key considerations is the value of the currency against other major currencies.

Here's a comparison of the Vietnamese Dong against other major currencies:

1 US Dollar =  23,472 VND

1 Euro = 25,710 VND

1 Pound = 29,629 VND

The average monthly salary in Vietnam is 6.5 million VND/ month ($275 USD/month). Understanding the exchange rate and cost of living in Vietnam is critical in determining the labor cost for your outsourcing projects.

Exploring the Salary Landscape in Vietnam

Salaries in Vietnam vary based on factors such as job title, education level, and location. High-paying roles include IT Manager, Software Engineer, and Project Manager, while low-paying roles include Data Entry Clerk and Customer Service Representative.

In Vietnam, the gender pay gap is narrowing, but disparities still exist in some industries. Companies operating in the country are increasingly adopting policies to promote gender equality and reduce the pay gap. Common bonuses and incentives in Vietnam include performance-based bonuses, year-end bonuses, and allowances for housing, transportation, and healthcare.

The Top 3 Outsourced Industries in Vietnam

The top three outsourced industries in Vietnam are:

Information Technology

Vietnam's emergence as a hub for software development, web development, and mobile app development outsourcing is driven by its strong economic growth, making it an attractive location for software companies expanding into Southeast Asia. 

With a large, skilled workforce, low labor costs, and a growing economy, Vietnam has the ingredients to become a leading software hub in the region. Despite COVID-19 challenges, Vietnam remains a key and growing manufacturing hub, surviving global supply chain disruptions, and boasts a labor force of approximately 56 million people, providing a vast talent pool for various industries, including IT. 

The country's strong focus on STEM education and government support for the IT sector fosters an environment conducive to innovation and growth, positioning Vietnam as an emerging player in the software development and IT outsourcing industries.

Business Process Outsourcing (BPO)

Companies increasingly outsource customer support, data entry, and accounting services to leverage Vietnam's competitive labor market, which offers cost efficiency, access to a skilled workforce, and strong language capabilities. The Business Process Outsourcing (BPO) industry has experienced significant growth in recent years, with the global market valued at USD 261.9 billion in 2022 and projected to grow at a 9.4% CAGR from 2023 to 2030. 

Outsourcing to countries like Vietnam allows companies to save money and benefit from factors like multilingualism, cost reduction, and regulatory compliances that ensure data security. Companies such as DataPowerHub and Accenture are leading players in the data entry and customer support outsourcing sectors, respectively..


Vietnam has become an attractive destination for outsourcing manufacturing due to its low labor costs, which are half as much as China's, robust infrastructure, and strategic geographic location. This has drawn global giants like Samsung, which produces nearly 50% of its smartphones and tablets in Vietnam, as well as footwear companies Nike and Adidas, making Vietnam the third-largest shoe producer globally. 

Tech giants IBM and Intel have also established a long-term presence in the country. Vietnam's logistics industry, accounting for 4.5% of the total GDP, and its progress in digital readiness contribute to its appeal as a manufacturing hub.

The Benefits of Outsourcing to Vietnam

Outsourcing to Vietnam offers numerous advantages for businesses, including:

  • Cost Savings: Lower labor costs in Vietnam allow companies to achieve significant cost savings without compromising on quality. Vietnam offers a competitive edge over other countries in the region. Despite a yearly increase in minimum wage rates, ranging between $132 and $190, the country's labor costs remain more attractive to foreign investors and importers compared to its regional counterparts.

  • Access to Skilled Talent: Vietnam has a young, well-educated, and skilled workforce that is proficient in English, making it an attractive destination for outsourcing. The country's strong emphasis on education and skill development ensures a steady supply of qualified professionals in various fields.

  • Time Zone Advantages: Vietnam's time zone (GMT+7) offers advantages for businesses in the US, Europe, and Asia, enabling seamless collaboration and round-the-clock productivity.

  • Government Support: The Vietnamese government has implemented policies to promote foreign investment and facilitate outsourcing. These include tax incentives, investment protection agreements, and streamlined procedures for setting up businesses.

  • Low Turnover: Vietnam's IT sector has lower employee turnover and better workforce stability compared to many other nations involved in onshoring or offshoring software development. The IT-related turnover rates in the country are just 5%, contributing to a more stable and reliable work environment for businesses.

  • Improved Quality Control: Outsourcing buying offices in Vietnam can lead to improved quality control and better supply chain management for businesses. As companies expand their operations in Vietnam, they are increasingly adopting this practice to leverage the local expertise and knowledge, enabling them to optimize their procurement processes and maintain high-quality standards.

Communication and Collaboration: The Key to Success with Vietnam Outsourcing Partners

Effective communication and collaboration are critical to the success of any outsourcing partnership. When outsourcing to Vietnam, consider the following:

  • Time Zones: Vietnam is in the Indochina Time Zone (GMT+7), which may require adjusting your communication schedule to ensure timely collaboration with your outsourcing partners.

  • Language: While English proficiency is generally high in Vietnam's professional workforce, it's essential to ensure clear communication by using simple language, avoiding jargon, and providing written instructions when necessary.

  • Cultural Differences: Understanding and respecting cultural differences is crucial for building strong relationships with your Vietnamese outsourcing partners. Be aware of cultural norms and values, such as the importance of saving face, respecting hierarchy, and displaying politeness.

  • Project Management Tools: Utilize project management tools like Asana, Trello, or Basecamp to streamline workflows, monitor progress, and ensure successful project completion.

  • Regular Check-ins: Schedule regular check-ins to discuss project updates, address concerns, and provide feedback to your outsourcing partners. This will help maintain open communication channels and foster a strong working relationship.

Legal and Compliance Considerations for Outsourcing to Vietnam

Outsourcing can offer numerous benefits for companies, such as cost savings and access to a skilled workforce. However, it's essential to consider the legal and compliance aspects when outsourcing to Vietnam to avoid any potential pitfalls. Here are some key factors to consider:

Data Protection Laws

Ensure your Vietnamese outsourcing partner complies with data protection laws and has measures in place to safeguard sensitive information. For clients based in the European Union, GDPR compliance is crucial, while Vietnamese companies should adhere to the Law on Cybersecurity and the Law on Protection of Information.

Intellectual Property Rights

Protecting your company's intellectual property is vital. Consult with legal experts to draft agreements that clearly outline the ownership and usage of intellectual property generated during the outsourcing process. Be aware of the Intellectual Property Law in Vietnam, which governs patents, copyrights, and trademarks.

Vietnamese Employment Laws and Regulations

Ensure that your outsourcing partner adheres to Vietnamese employment laws and regulations, such as minimum wage, working hours, and employee benefits. Familiarize yourself with local labor laws, including the Labor Code, and ensure your outsourcing partner complies with them.

Tax Implications

Consult with tax professionals to understand the potential tax implications of outsourcing to Vietnam, including any applicable taxes or double taxation agreements. Vietnamese indirect tax rates vary depending on the products and services involved, so be aware of any potential tax liabilities.

Understanding the Cultural Differences of Your Outsourced Vietnamese Teams

Working with outsourced teams in Vietnam may require adapting to cultural nuances to ensure a harmonious and productive working relationship. Key cultural considerations include:

  • Respect for Hierarchy: Vietnamese culture places a strong emphasis on hierarchy, and it's important to respect the roles and positions of team members.

  • Politeness and Indirect Communication: Vietnamese people tend to communicate politely and indirectly to avoid confrontation and maintain harmony. Be mindful of this communication style and ensure that your messages are clear and concise.

  • Collectivist Culture: Vietnamese culture is collectivist, with a strong focus on group harmony and loyalty. Emphasize teamwork and collaboration to foster a sense of belonging and commitment within your outsourced teams.

Monitor Outsourced Team's Performance with Insightful

To effectively manage your outsourced team in Vietnam, utilizing tools like Insightful’s work remotely software can be invaluable. Insightful allows you to:

  • Employee Monitoring: Monitor your outsourced team's work activity in real-time, ensuring they stay on task and productive.

  • Time Tracking: Track time spent on projects and tasks, enabling you to better allocate resources and manage budgets.

  • Detailed Reports: Gain insights into your team's performance with detailed reports on work hours, task completion, and project progress.

Outsourcing in Vietnam offers a wealth of benefits for businesses seeking cost-effective solutions and access to a skilled workforce. By understanding the salary landscape, focusing on effective communication and collaboration, and utilizing time management tools like Insightful, you can unlock the full potential of outsourcing in Vietnam and ensure the success of your remote team.

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