In 2021, more and more businesses in the startup community decide to build tech team in Vietnam as an effective tech scale up strategy. A consequence of COVID-19 that left people with more reasons for offshoring their tech operations, including talent and finance-related perks. 

However, some organizations still have reservations about building an offshore tech team in a different country such as Vietnam, wondering if it is a safe and cost-effective way to grow, scale, and progress. 


Offshoring Tech Team To Vietnam Strategy

Did you know that 50% of the outsourced projects either fail outright or just could not meet the expectations? 

Software development is the backbone of most tech startups, and should not be left to 3rd-party vendors. In fact, shouldn’t tech be a core competency for companies claiming to be innovative and/or disruptive?”

Only a great in-house tech team can help you grow fast and scale up efficiently. And investors today won’t hand over a dime to tech startups that can’t even manage their own software development. 

But an in-house tech team is expensive, especially if you are in Singapore. On the other hand, your product needs to go to market as quickly as possible. So how can you find those affordable “experts” to join your tech team in the shortest time?

This is where the benefits of offshoring tech teams to an emerging market come in. 


Top 3 Reasons To Build Tech Team In Vietnam

There are many benefits of offshoring your software development process to Vietnam and set up your own tech team here, including:


Less Competitive For Talent

As offshoring tech teams to a low-cost country become a common strategy for businesses, attracting the right talent has become much harder in Vietnam. Still, you are not competing with other tech giants such as Tencent or Amazon in Singapore. Meaning you still have the advantage of being the early explorer/adopter in a market that is not saturated yet. 

On the other hand, Vietnamese developers are eager to work for international companies. Their culture also shares similarities to us with loyalty and family-oriented being the two worth-notice characteristics

As long as we can leverage the international, learning-friendly environment with attractive salaries, it will be much easier to attract skilled tech talents in Vietnam than in other countries.  


Wide Tech Talent Pool

Vietnam Has Wide Tech Talent Pool

The tech talent shortage has been a recurring issue in Singapore’s IT sector for the last decade. As the country is proud to be the center of tech innovation, local adequate tech talents are especially scarce dues to harsh competition between big corporations. According to the Minister-in-charge of the Smart Nation initiative, Singapore is facing a 51,600 IT talent shortage over the next three years, driving up the costs of hiring rapidly to compete for the limited supply available.

Consequently, tech startups have been attempting to extend their reach to dedicated developers in Vietnam. The country is well-known for its rich tech workforce with thousands of IT graduates joining the market each year. This means that their tech labor availability is much higher compared to its neighbors. And substantially cheaper!


Affordable Tech Talent

As a growing business in the post-pandemic landscape, making the most of your budget is crucial to surviving 2021. This in turn forces managers to pay a closer look at their overhead cost. 

For early-stage tech companies in Singapore, manpower remains the major cost with the IT team usually being the highest-paid. The key is reducing the cost of hiring tech talent without compromising the quality of your tech development. Meaning the labor force from a “low-cost” country needs to possess adequate skills for the project. 

In Vietnam, a mid-senior developer or software engineer with 5 years of experience would draw a monthly gross salary of approximately US$2574. This is almost half the salary of an equivalent employee in Singapore. Which means you can hire 2 headcounts with the same budget. But the best thing is that you have access to a very high skill tech talent base to further improve your IT capabilities. 

Additionally, the cost of office rental in Vietnam is also much more affordable compared to Singapore. In the post-pandemic landscape, any saving means more chances for your startup to grow to its fullest potential. It is no surprise that Vietnam is considered one of the best offshoring destinations and promising tech hubs in ASEAN.


The Bottom Line

There is no doubt that choosing to build tech team in Vietnam will enable your startup to grow faster and scale. However, executing the strategy flawlessly is extremely difficult for early-stage startups due to the limitation in both budget and local insight.

It can also be very complex due to the nature of hiring offshore talent which increases the likelihood of non-compliance and other errors, and even impedes your productivity. Thus, to minimize the challenges posed by recruiting and managing an offshore tech team, many growing companies have relied on a trusted Venture Studio that specialized in offshore venture and HR services to shoulder the burden for them. 

After all, the ultimate goal is saving costs without sacrificing our tech development capabilities.  


Contact Tech JDI for Offshoring Consultancy