But where should you look in Vietnam if you wanted to offshore your software development, and are there differences in Salary and output in these different hotspots? Here, we will investigate the best locations and how they may differ in offerings.

Which Cities?

IT Population

The current hotspots in Vietnam, providing the largest pools of software developers are Ho Chi Minh City, Hanoi, and Da Nang. This is the estimated number of developers living in each city. 

IT Businesses

However, the number of businesses that operate in the Tech industry in these cities differs greatly. From Tech Behemoths, it is suggested that there are:

Do salaries change?

Income reports have stated there are salary variances between differing cities. Here are the differences, monthly, by location:

• Ho Chi Minh:  $1836.22
• Da Nang: $1604.05
• Hanoi: $1504.73

Does output? 

Although salaries do change by city, the consensus is that output among firms and their developers is consistent across these different software hotspots. This, therefore, makes Da Nang and Hanoi more attractive, on a price point basis, compared to Ho Chi Minh and are therefore worth great consideration.

Decision Time

Though Ho Chi Minh City boasts a higher amount of software developers and companies, developer teams are more expensive, compared to cities, like Da Nang or Hanoi. This makes Da Nang and Hanoi more attractive options. This may reduce developer team costs to a business looking to outsource IT capabilities. 

Time Zone Differences

For many companies operating in the west, offshoring software development often requires collaborating across time zones. This may disrupt or delay communication channels.

Say you are a UK company and are working with a team in Vietnam. Whilst a UK team’s day would start at 9:00 AM, a Vietnamese dev team’s day is already 16:00 PM. This can require preparation of wants and needs from the developers the day before, for developer teams to work on anything that needs more immediate attention the next day. Prior planning for tasks or business needs is necessary in order to reduce inefficient communication and delays.

This is not such an immediate problem when time-zone differences are one or two hours behind but be sure to anticipate this when time zones differ increasingly. Here is a list of the best offshoring countries for software development teams with their associated time zones.

Luckily, many companies that provide augmented software development teams in different countries provide later meetings, that fit with company working hours. This may not be true for all, so requires research and due diligence on a company-by-company basis.

Developer Salary

The primary reason for offshoring software development capabilities is that software developer salaries in maturing economies are making software companies less competitive on costs. Salaries in Eastern Europe are averaging at $73,768 for a developer, whilst in North America, they are at $93,077. This greatly impacts business costs and in turn profits. Thus, these offshoring destinations are offering lower salaries, whilst delivering the same quality.

Asia shows the biggest decrease in average salary, at $63.956 so we have highlighted the average salary in the countries that offer the best software development:

• Vietnam: Average Developer Salary: $45,848
• India: Average DeveloperSalary: $48,918
• Philippines: Average Developer Salary: $41,201

In these countries, companies will truly see the value in return on investment, with significantly lower salaries compared to their western counterparts, while still competing effectively on the global scale.

Political Risk

Political risk- how politics within a country affects the risk of business operations- is another consideration when deciding your offshoring country location. Unstable political environments have an increased chance of legislation changes, which can at times be catastrophic for business operations.

Here is a list of the above-mentioned countries that are good for offshoring software development teams, with the associated, political, economic, and business environment risks in these areas

This shouldn’t be the be-all or end-all of decision-making, however. Many companies offshore to these countries due to the reward compared to the risk so this should not be a deciding factor. Political stability can still change greatly, with a current example being the war in Ukraine, which can and has affected business operations. Due diligence prior to outsourcing a company’s software development capabilities is therefore a necessity.

A Final Thought

These factors are just a few of the more holistic considerations a company should have in mind when offshoring. There are many more considerations, that will change by country, that covers the more ethical and social factors that a company may want to investigate, for fulfilling social objectives. This requires a deeper dive into a country’s socio-economic environment.