Web development companies and digital agencies are facing intense competitive pressures around the world. As a result, offshoring and nearshoring has become a key strategy for these companies in the United States, Singapore, Australia and others. Offshoring can be a key part of the approach to reduce production costs and find staffing to keep up with client requirements.
This article links to a number of our more detailed guidances on issues relevant to web development companies and digital agencies. Click through for more extensive content on any particular issue.
Why base your development team in Vietnam?
Vietnam offers the range of skill sets required to support a digital agency, including web developers, but also mobile developers, software engineers and designers. The country is attractive as a base for a production team for many reasons, but particularly for its large young labour force, high levels of political stability and relatively low costs. Vietnam is seen favorably to many other countries that an agency might consider for a production team, including Indonesia, the Philippines, Thailand and China.
How much does a development team cost?
Labour costs are the key component of expenses for an offshore development team. After including compulsory taxes and social insurance, full-time web developers can be hired for under $1,000 USD per month. This amount increases for specific technical skills, very high levels of English or additional years of experience. More detail on salaries for production teams are available here.
There are some administrative costs required to support the establishment of a team in Vietnam. These typically include company registration and a lease for an office, although coworking spaces are a viable alternative for smaller teams. Once the company is operational, accounting costs and taxation will become relevant.
What are the steps to build a development team in Vietnam?
Entering a foreign market is a big decision! At a minimum, your company will need to have identified the roles they are seeking, agreed a budget for the process and defined some rough timelines.
If you’re pursuing the traditional path of registering a company in Vietnam, you will need to prepare for this application. The exact list of documents will vary depending on your ownership structure and the type of company preferred by your agency. Timelines vary, but the process is becoming quicker each year.
Setting up an office using a standard commercial lease can be complicated but is possible. Offices become more difficult when the total area is less than 100 square metres, but coworking spaces in Vietnam offer much more flexibility. They are also easier to scale on demand.
Finding your first employees in Vietnam may offer a new challenge for executives from high-income countries. Prior experience in Asia certainly helps, but the challenges of hiring in Vietnam can be overcome with these tips. If you’re looking to use a recruiter, know that industry averages for fees range from 17-25% of annual salary.
Using a hosting service can rapidly accelerating your commencement date. This approach will also dramatically reduce your administrative overheads and the costs you are exposed to for company registration. Enquire for more information.
How do agencies succeed with a production team in Vietnam?
Implementing an offshore production team for a digital agency can be a major windfall for the company, improving margins and addressing talent shortages. It’s a strategic move that requires time and effort. Some general rules should guide this initiative, in relation to the preparation to offshore, the initial commencement and subsequent operation of the team. Close attention will also need to be paid to the structure of your project and the management of the team.
Teams that will operate remotely have specific considerations. The selection of team members, the management of the team and communication within the team are all exceptionally important to a remote team’s success. The right tools are also vitally important to ensure the team can perform as expected.
Need more help?
Metasource greatly simplifies and accelerates an agency’s entry to Vietnam. Take advantage of our expertise to get your production team started in Vietnam as soon as possible.