In recent years, Vietnam has seen a proliferation of startups and foreign companies set up remote capabilities on it's soil. The country boasts a strong pool of (young) local tech talent, low labour costs, and a growing tech ecosystem. There are, however, some trade-offs which we will look at below...
Advantages of Building Remote Teams in Vietnam
1. Cost-effective talent pool
A major attraction for international startups considering Vietnam is the access to a highly skilled APAC talent base at a very competitive cost. Vietnam is significantly better value than Singapore and very competitive when compared to other emerging markets in the region, such as Indonesia and the Philippines (in many skill sets, much cheaper).
2. Rapidly growing tech eco-system
Vietnam has one of Asia Pacific's fastest-growing tech scenes, with cities like Ho Chi Minh City and Hanoi fast-becoming regional tech hubs.
3. Skilled Workforce
Vietnam has a young and highly-skilled workforce (70% of the population) which has a passion for STEM and sees Computer Science as a highly aspirational career-path.
4. Favourable timezone
Another benefit is that Vietnam’s time-zone (GMT+7) enables startups to work with clients or teams across Asia-Pacific (APAC) and even Europe. The advantage here is that the overlap with key markets, be it Australia, Singapore or even parts of the UK, make it fairly easy for remote teams in Vietnam to operate effectively with international partners.
5. Government support and business-friendly policies
The Vietnamese government has passed tax incentives and startup grants to grow the tech industry. The government has also amended its legal framework to boost foreign direct investment (FDI) and become more FDI-friendly by introducing more business-friendly policies so that companies can set up more easily and quickly.
Disadvantages of Building Remote Teams in Vietnam
Communication barriers
Though there is a high level of proficiency in English among Vietnamese professionals, at least in the tech field, there are, of course, variations in proficiency, especially outside of the big cities. It’s not uncommon to go through a great deal of mistakes due to a massive language barrier, especially if you’re targeting a role that heavily involves your team’s day-to-day interactions with global clients.
2. Working style
Vietnamese workers might be more accustomed to hierarchical decision-making structures and might need greater guidance in transitioning to the flattened, more rapid and informal decision-making culture that is often a feature of western startups.
3. Limited exposure to international markets
Although Vietnam’s tech talent is continuing to blossom, many professionals still have relatively little experience in working directly with overseas companies, and startups could end up having to spend more time onboarding and training to help them adjust to the pace and demands of international markets.
4. Infrastructure limitations
Despite the rapid growth of Vietnam's tech eco-system, infrastructure can still be an issue – for example, in terms of internet reliability outside of Hanoi and Ho Chi Minh City – companies with home bases in either of those cities will usually have good connectivity. However, startups working with teams in smaller cities will sometimes need to deal with the occasional flicker that can affect productivity.
Is Vietnam Right for Your Startup?
Adding a remote capability in Vietnam allows startups to access a cost-effective, skilled and rapidly expanding talent pool. But harnessing this strength while avoiding the pitfalls requires startups to think carefully about communication issues across time zones and cultures, alongside the obstacles of poor infrastructure, particularly unreliable power. The best way to proceed is to invest in team-building, as well as in communications infrastructure, and to offer attractive remuneration packages to retain the best talent.
Vietnam is a strong option for startups looking to scale into the APAC region or those who want an offshore talent base. Technology-heavy roles are also a great fit for working with a Vietnamese development team. Like with all strategic decisions, the quickest path to success is by understanding the pros and cons, aligning the expectations, and creating an environment for remote teams to thrive.