Hiring offshore developers in Vietnam is a common strategy for businesses to scale up their tech operations without getting hindered by the limitation of local tech talent. It enables companies to save cost and time while also diversifying their manpower.
However, recruiting and securing tech talent overseas is anything but simple. It also requires a significant up-front investment to successfully build and grow a tech team in Vietnam. So we always recommend our clients consider these crucial aspects before deciding on hiring offshore developers.
The ideal place to hire offshore developers in ASEAN is Vietnam
The primary reason why many organisations prefer offshore tech teams over local hires is their cost-effectiveness. For a developed country like Singapore, hiring a full-time local software developer with five years of experience can be extremely expensive with an average cost of US$3,220.
On the other hand, a Vietnamese developer with the same experience and skill set only costs US$2,300 monthly or 40 per cent lower. Meaning firms can easily double the headcount with the same budget by building their own offshore tech team.
Apart from the cost factor, it is unquestionable that Vietnam possesses a fast-growth tech talent pool. A total of 400,000 local developers currently working coupled with 50.000 new tech talents join the workforce each year.
This is dues to the Vietnamese government’s prioritised investment in the IT industry and education, ensuring the country becomes the regional tech hub for tech firms and startups across the globe.
What businesses need to know before recruiting offshore developers
- The structure of offshore tech teams
Before starting searching for candidates, it is imperative that firms identify the optimal tech team structure. The answer often depends on the complexity and specifics of the projects which vary case by case. However, the common ground is it should satisfy the company’s particular needs within the given timeframe budget.
Also Read: 5 research-based tips to effectively manage your remote software engineers
For Tech JDI clients, the ideal member composition is often divided based on the expected headcount and their role responsibilities:
Very small tech team (one-three offshore developers)
Small tech team (three-five offshore developers)
Mid-size tech team (five-10 offshore developers)
Large tech team (10-50 offshore developers)
- Cost Of Recruiting Offshore Developers In Vietnam
Budget is the blood vessel that fuels your remote tech team expansion, thus, it is important to keep your budgeting right, clear out any hidden costs, and always expect future expenses when the team grows. Let’s take a car as an example, it requires fuel to run.
Similarly, hiring a developer and building your offshore tech team requires a clear budget to ensure it can scale and grow efficiently.
In other words, taking into account the developer’s salary is only one part of the picture. Firms will have to consider other recruiting expenses and hidden costs such as office space, benefits, compensations, and more.
Based on our experience, the average hiring cost for an offshore Vietnamese developer with five years of experience will include:
| Hiring expenses | Offshore hiring |
| Age of the candidate (years) | 31 |
| Average working experience (years) | 5 |
| Headcount cost + admin cost | |
| Monthly basic salary | US$2,574.00 |
| Monthly SIHIUI (Vietnam) / CPF (Singapore) | US$604.89 |
| Monthly gross salary | US$3,178.89 |
| Monthly admin overheads | US$572.20 |
| Monthly office expense | US$180.00 |
| Headcount and admin annual cost subtotal | US$47,173.08 |
| Leave benefits (accrued costings)
* Accrued Costings: The amount below is part of salary and admin annual cost subtotal |
|
| Medical and hospitalisation leave (30 days – Vietnam) | (-US$4,401.54) |
| Medical and hospitalisation Leave (14+46 days – Singapore) | N.A |
| Medical leave annual cost subtotal | *(-US$4,401.54) |
| *Vietnam medical and hospitalisation leave is a cost reduction when taken. | |
| Welfare – bonuses | |
| Annual wage supplement (13th month) | US$3,178.89 |
| Performance bonus (paid in Q1) | US$3,178.89 |
| Welfare – bonus annual cost subtotal | US$6,357.78 |
| Mandatory welfare | |
| Outpatient benefits cost | US$180.00 |
| Group hospital insurance | |
| Annual medical checkup cost | US$58.00 |
| Mandatory welfare annual cost subtotal | US$238.00 |
| Optional welfare | |
| Company trip | US$240.00 |
| Team building event | US$60.00 |
| Company dinner | US$60.00 |
| CNY / TET red packet | US$30.00 |
| Public holiday x three days (VN) / 11 (SG) | US$90.00 |
| International woman’s day | US$30.00 |
| Birthday red packet | US$60.00 |
| Marriage incentive | US$60.00 |
| Baby incentive | US$60.00 |
| International children day | US$18.00 |
| Bereavement gift (funeral) | US$60.00 |
| Optional welfare annual cost subtotal | US$768.00 |
Having a proper budgeting strategy allows you to choose appropriate offshore developers and the correct team size for growth and scalability. It is true that companies get to save hundreds and thousands of dollars when building their own offshore tech team in Vietnam.
Also Read: ‘Vietnam can be an excellent launchpad for regional, global startups’: says Eddie Thai
However, the misallocation of funds can also result in unproductivity. Set a budget and be determined in complying with the budget you set for your company.
- Hiring season in Vietnam
Hiring season can significantly affect your recruitment results. By understanding the nature of this recruitment season, firms can prepare for it in terms of budget planning, project planning, and resource planning. Thus, maximising their recruitment success and securing suitable candidates much faster.
Starting from March and lasting until the end of May is the so-called “golden period” when developers are more likely to switch jobs and look for new career opportunities. In contrast, recruiting them from October to January will become increasingly more difficult as this is the low hiring season.
During this period, developers are patiently waiting for the salary review, 13th-month, and Tet bonuses before they decide whether to stay or jump to a new place. Companies are advised to up their offers and benefits packages for a better chance to attract developers while competing against other competitors.
Final thoughts
When hiring Vietnamese developers for your remote tech team, there are many different factors that need to be considered, including the team structure, recruitment budget, and the current stage of the hiring season. Only those that can plan and execute accordingly will have a better chance of securing the best candidate.
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