Outsourcing Benefits In Vietnam: Reaping The Reward Of Your Business

Choosing a country to outsource the business is a wise investment for modern firms and organizations. Along with the trend, Vietnam, an Asian emerging market, is showing promise for the industry compared with other traditional locations. What makes outsourcing business to this country such a smart move? This article will back you up with a sound understanding of outsourcing benefits in Vietnam.

Outsourcing and some must-know concepts

Firstly, before jumping right into outsourcing benefits, it is a good practice to have core knowledge about outsourcing. This piece of information will lay the foundation for your further consideration regarding outsourcing agencies for your business.

Outsourcing and some must-know concepts

In its simplest form, outsourcing is the practice of hiring an external party to perform services or create goods that were traditionally performed in-house by the company’s staff. Some common outsourcing activities can be mentioned such as human resource management, supply chain management, facilities management, accounting, marketing, IT, customer support and service, engineering, design, and legal documentation, etc. 

Outsourcing is the right choice for businesses looking for a balance between an excellent service and its fair cost. At the same time, outsourcing benefits for developing countries (FDI and job creation, chance of specialization) and outsourcing benefits for employees (expertise improvement, competitive salary package,…) are also the driving force for governments to encourage this kind of activity.

Here, there is a common mistake that outsourcing and offshoring are interchangeable terms. In fact, these two activities are different to some extent, but remain their correlation in the business world. Specifically, offshoring merely refers to getting work done in a different country, while the broader term “outsourcing” relates to all practices of hiring a third-party organization to complete a given task. 

Another related term is “nearshore outsourcing”. Basically, it is the practice of subcontracting the team located close to yours, perhaps who borders your country, in order to do the desired work. Nearshore outsourcing benefits are also an appealing consideration to take when doing business. 

Frankly speaking, outsourcing comes with both upside and downside points. This urges businesses to consider outsourcing benefits and challenges to come up with feasible solutions. Having said that, it is definitely an open opportunity for firms as the global outsourcing benefits outweigh the limitations in the long run.

Outsourcing benefits in Vietnam

In 2005, some multinational technology corps like Oracle, Intel began to tap into the tech workforce in Vietnam. Since then, many other world-leading companies like Microsoft, Samsung, IBM,…have continued to channel capital into this country. Now, lots of businesses looking to outsource product development are taking a closer look at options in Vietnam.

So what encourages these businesses to choose Vietnam as a decent choice? Let’s dig into outsourcing benefits in this market to find out the answer for the trend.

Financial Attractiveness

Hiring local employees in developed economies can cost businesses a huge amount of expenses, especially in some leading powerhouses such as the US, UK, Germany,… In contrast, the labor costs in Vietnam are much cheaper than those in the US. According to CIO magazine, outsourcing to Vietnam can save up to 90% of costs compared to this counterpart. This, ultimately, translates into more funds for the firm’s development. 

According to MarketsInsider, with regard to the outsourcing price, Vietnam ranked 5th in the “Best countries to outsource to in the World in 2019” list.

Financial Attractiveness

Labor Force

Thanks to the creative education policies, today Vietnam has a highly educated population, with a 96% literacy rate. At the same time, according to Vietnam Economic Times, more than 80% of the college graduates hold degrees in the sciences. These pieces of evidence have backed up the outsourcing benefits of Vietnam, making the country an exceptional outsourcing hub for global firms. 

Other than that, the low turnover and high stability are also strong points of Vietnam. Overall, the IT-related turnover rate of Vietnamese companies is less than 5%. Whereas in some established outsourcing destinations, such as India, this figure can be 10% or even higher. Noticeably, Ho Chi Minh City is considered to have a “significantly low attrition rate”, and a “strong labor pool”. These are the reasons why the city has entered the list of the top 50 outsourcing cities in the world.

Economic Outlook and Political Stability

According to WB, Vietnam is now among the most vibrant emerging countries in the East Asia region. The extensive market-oriented economy has grown at a rate of around 20% annually for the past decade. 

Furthermore, according to the latest World Development Report, Vietnam ranked 48/157 countries on the human capital index (HCI), and ranked second in ASEAN, just behind Singapore. Hence, this sustainable economic outlook is well-suited for the outsourcing industry. 

Economic Outlook and Political Stability

The government initiative is another aspect to consider in terms of the outsourcing benefits and drawbacks. As a matter of fact, many foreign companies might not be in favor of the rigidness of the communist political system. However, to look on the bright side, it is the solid foundation for the fast-growing economy in Vietnam. In addition, this political system is also a sign of a stable and secure country. 

By observing how outsourcing benefits the US economy, the Vietnamese government has outlined a suitable skeleton for outsourcing activities in the domestic market. Specifically, a modern and business-driven market plan is adopted to maximize the outsourcing benefits for companies. In addition, all foreign investments are encouraged, making it easy for outsourcing in Vietnam. 

English Proficiency and Cultural Compatibility

Communication is another point for businesses to consider when it comes to outsourcing benefits and limitations. This is because a good language base can streamline the whole process of outsourcing to the local country. 

Get yourself relaxed as Vietnam has a considerable English-speaking population. In detail, about 53% of Vietnamese citizens speak English as a second language. Moreover, as one of the job requirements for IT employees, language barriers are much relieved.  In particular, most Vietnamese IT seniors can confidently leverage their tech expertise to discuss any cutting-edge solutions and bring innovative ideas to the table. 

Besides, there are lots of Vietnamese expatriates who used to work as engineers in advanced economies returning home. Thereby, they serve as a facilitator to help local colleagues to overcome cultural and language barriers.


Global firms no longer have to go back and forth about outsourcing benefits and risks when deciding to choose a Vietnamese vendor. This is because compared to the overabundance of offshore firms in other conventional markets, Vietnamese companies are far from quantity but “big fish in small fond”. That makes outsourcing benefits administration much easier and allows domestic firms to acquire and retain top talents without hassle.

>>>> Read more: Magento website development cost: Affordable & Flexibility

Magenest As Your Trusted Outsourcing Agency

IT outsourcing in Vietnam has witnessed a boom over the last decade. Along with the trend, Magenest, a prominent IT outsourcing services company, has enjoyed a warm welcome from both local and foreign customers.

No matter what type of custom software development service you require, rest assured that Magenest can deliver and meet your specific needs – with flying colors. 

Magenest As Your Trusted Outsourcing Agency

In particular, this outsourcing agency is a trusted Magento Business Solution Partner in the APAC region, and a well-known Adobe Bronze Solution Partner. Their expertise is mainly end-to-end eCommerce systems, with a wide range of services including platform migration, system integration, B2B & B2C experience, and cloud infrastructure solutions. Besides, Magenest has experience in software outsourcing development services, Amazon web services, mobile application software outsourcing. For example, for Magento eshop owners, Magenest offers Magento custom app outsourcing services, which will help to create a better user experience in the digital age.

Throughout 5 years of development, Magenest has taken pride in a team of experienced and skillful IT experts. These tech leads and dev can help customers develop custom applications to suit the needs of their eCommerce business. With Magenest, each project is carefully custom-built to fit your requirements.

Standing out from other Vietnamese outsourcing companies, Magenest has the capability and experience to ace the work of any outsourcing plan. In fact, with successful projects, to name but a few ones with both famous international and domestic corporations such as Heineken, Secure Trading, Flexfit, Universal Music Group, Nestle, and Bibo Mart, and so on. Magenest claims itself among top-notch outsourcing agencies in Vietnam.

Final Thoughts

Taking all these above-mentioned outsourcing benefits, you could find Vietnam as an emerging and trusted hotspot for the success of your business. Magenest’s outsourcing services are here to ensure a seamless process of your operation. If you have any concerns, leave a word in the comment box below. Our tech team will get you covered with a thorough explanation. 

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