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Country spotlight –It job market in vietnam is expected to increase by 6 to 10 percent annually over the next three years
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Country spotlight –It job market in vietnam is expected to increase by 6 to 10 percent annually over the next three years

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In APAC region, Vietnam is emerging as a preferred destination for offshoring IT related activities following India and China

In APAC region, Vietnam is emerging as a preferred destination for offshoring IT related activities following India and China

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  • 1. Country Spotlight –IT Job Market In Vietnam Is Expected To Increase By 6 To 10 Percent Annually Over The Next Three Years In APAC region, Vietnam is emerging as a preferred destination for Contact Details Talent Neuron 3080 Olcott Street, Suite A125, Santa Clara, CA 95054 Phone: +408-716-8432 Email: info@zinnov.com offshoring IT related activities following India and China. This has become evident as the country’s software export in 2012 rose to USD Similar Articles 550 million, an increase of around 35 percent when compared to USD Boise, San Antonio And Mobile Are Emerging Locations In US For Technical Support Activities 400 million in 2010. Several MNCs started setting up centres in Vietnam during 2008-12, primarily to take advantage of its lower costs. Currently, there are around 750 companies in the software vertical in Vietnam employing 35,000 professionals. These include big players such as IBM, HP, NTT, Huawei and Intel. The main advantages Vietnam offers are a large workforce and a stable government with strong support for ICT sectors from the government. Ho Chi Minh City and Hanoi are the major technology hubs in the country. Hi Chi Minh City has an installed talent base of 18,000 in IT services and 8,000 in software while the Hanoi has a talent pool of 9,000 professionals, primarily in the IT services sector. Further, these cities generate a combined graduate pool of 9,000 engineers that are suited for employment in the software development sector. Talent Neuron research indicates that IT services jobs are set to increase exponentially – it has already risen by 13.9 percent since 2010, and is For more information, please contact info@talentneuron.co m| www.talentneuron.co m This message has been approved for distribution by Vamsee Tirukkala, Co-Founder and EVP – Talent Neuron. This email is sent by Zinnov LLC. If you wish to unsubscribe from this communication please email to info@talentneuron.co m
  • 2. expected to grow by 14.4 percent annually till 2016. Similarly, our research shows jobs in the software development domain are also expected to increase by 6.35 percent annually over the next three years. Our job demand analysis shows that for every new job in software development, there are about 13 software development professionals. Universities offer an excellent ecosystem for companies to carry out joint research and development initiatives. IBM plans partners with Vietnamese universities to conduct joint research in areas such as analytics and cloud computing. IT service companies in Vietnam primarily cater to the Japanese and US markets, which account for a combined 75 percent of revenues. Moreover, the move to deregulate sectors such as energy, health services and telecom in Japan is expected to fuel the demand for additional IT-related jobs (Data centers, managed services etc.) in Vietnam. Talent Neuron research indicates that companies initially build up a team of 300-350 employees within the first 3 years and then scale up to 1,000 resources in the subsequent 5 years. Vietnam also offers significant cost advantages when compared to China and India. Salaries for software developers in Hanoi and Ho Chi Minh are about 30-35 percent lower than those in Bangalore, India. Similarly, developers in Beijing and Shanghai are offered double the salary compared to their Vietnamese counterparts.
  • 3. Source: Talent Neuron Salary Index. Note: The salary is considered for a resource with 3-7 years of experience with typical development skills such as C, C++, .Net, JAVA etc. Government Incentive/Initiatives As part of its efforts to enhance the country’s investment-friendly reputation, the Vietnamese government offers various incentives for software companies.  The corporate tax rate for software companies has been reduced to just 10 percent of the total profits for the first 15 years of operations (the standard tax rate is 28 percent)  The government offers a tax holiday for four years beginning from the first year of profit, and then 50 percent reduction for nine years subsequently  Exported software products and services are exempt from VAT and import duty  The import of raw materials required for software production purposes is exempt from import duty In addition, the government is undertaking measures to de-regulate sectors such as business services, telecommunications, distribution, insurance, banking, securities, transportation, healthcare, education, culture and environment. The Government also plans to increase private
  • 4. investment in projects related to industrial areas, export processing zones, hi-tech zones and economic zones. Business Challenges  The employee turnover rate is around 17 percent in Vietnam and is increasing at a rate of 2 percent year on year.  The IT talent available in Vietnam lack experience working in multicultural environments. Companies such as IBM have created professional development programs for employees.

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