ITviec Survey Reveals Strong IT Sector in Vietnam
80% of IT Companies in Vietnam Plan Significant Growth Over The Next 12 Months
Skill Shortage is the Biggest Growth Constraint
IT companies in Vietnam are growing fast.
A recent survey by ITviec with 61 leading IT companies in Vietnam reveals that 80% plan to grow their staff by at least 20% over the next 12 months.
55% of respondents planned to grow staff between 20% and 50%. 25% of respondents plan to grow staff by over 50%.
Vietnam has competitive advantages over other countries.
50% of foreign-owned respondents said they had considered other countries before choosing Vietnam. They cited Vietnam’s competitive labor cost, strong technical labor force and a stable political environment as main reasons for choosing to do business in Vietnam.
75% of all respondents cited Vietnam’s combination of strong technical talent and competitive labor costs as the #1 most attractive factor to IT companies.
Although China and India are often compared with Vietnam as main competitors, 50% of foreign companies considered other South East Asia countries like Malaysia, Thailand, Singapore, Philippines before decided choosing Vietnam. Only 13% considered India and 11% considered China.
Mr. Muthamma Acharya, Corporate Communications Manager of Robert Bosch Engineering and Business Solutions Vietnam, said, “The decision to setup a development centre in Ho Chi Minh City, Vietnam is taken based on different decision criterions like geographical proximity, cost arbitrage and availability of skilled talent.”
Mr. Pham Binh Nguyen, CTO of Gianty, an IT product company from Japan, said, “Vietnam is just the only choice, because China and India have a high cost and others are not good in technical skill.”
Skills shortage is #1 constraint on growth.
Despite strong growth, respondents believe they could grow even faster with greater availability of skilled candidates.
70% of all respondents and 90% of foreign respondents cited “lack of skilled candidates” as the #1 factor limiting growth. 65% list senior developers or technical architects as the most challenging positions to fill in Vietnam.
The biggest weak point of Vietnamese IT labor is English ability. 45% of respondents listed poor English as the #1 area for improvement of Vietnamese IT talent. 90% of all respondents said that English ability in other countries is better than in Vietnam.
Other skills needing improvement were higher level ability to design and think critically instead of just execute (27%), technical skills (6%), loyalty (6%) and desire to learn (6%).
The next biggest growth constraint was “challenge to find customers”, cited by 10% of foreign and 38% of Vietnamese IT companies.
Outsourcing1 is the largest and fastest-growing category.
Companies that focus on outsourcing continue to be the largest IT category in Vietnam at 64% of respondents vs. 36% for product2 companies.
Outsourcing companies are growing faster than product companies — the average growth rate for outsourcing companies over the next 12 months is 46%. However, product companies are also growing very well with an average growth rate of 37% over the next 12 months.
According to Mr. Viet Hung Nguyen, Managing Director of KMS Technology Vietnam, ”Considering the proposition of IT outsourcing services, Vietnam is best between value offering and cost. Especially, it’s a great fit for small and medium business to work with Vietnam vendors to effectively maintain IT outsourcing budget and at the same time maintain the quality of the software.”
Mr. Ansgar Knipschild, Head of Marketing of German company mgm technology partners GmbH, told us, “Being here in Vietnam feels like having the best of two worlds, namely India and Silicon Valley.”
About ITviec
ITviec.com is Vietnam’s leading IT recruitment website.
Our mission is to help Vietnamese IT people grow so they can build great products and change the world.
ITviec.com was founded in 2013 by Chris Harvey. Previously, Chris was CEO of VietnamWorks from 2006 to 2012. Before that Chris held product and business leadership roles at Yahoo! and AOL in Silicon Valley, California.
Learn more at //itviec.com/blog/about-us/
Contact us at chris@itviec.com
1 Outsourcing means a company that does IT contract work for another company. Examples are CSC, FPT or Harvey Nash.
2 Product means a company that creates, markets and sells its own IT product. Examples are Atlassian, Hella or Cybozu.