Outsourcing in Asia: Philippines VS. Vietnam

The Philippines establishes in the previous article that it is now a top-of-mind option for acquiring skilled talent. It is making Staff Leasing one of the most effective methods to cut down salary costs while still producing output. While the Philippines has dominated the voice sector and is also becoming a major IT-outsourcing destination, Vietnam […]

The Philippines establishes in the previous article that it is now a top-of-mind option for acquiring skilled talent. It is making Staff Leasing one of the most effective methods to cut down salary costs while still producing output.

While the Philippines has dominated the voice sector and is also becoming a major IT-outsourcing destination, Vietnam has recently emerged as an offshoring competitor and is quickly gaining the attention of multinationals. Given that both countries are in Southeast Asia, Vietnam now challenges the foothold that the Philippines has established in the region.

As with all the other entries in this series, we will compare the Philippines and Vietnam in terms of salary costs, talent, and infrastructure. These factors will determine which offshoring destination is superior.

Salary Costs

The allure of outsourcing lies in cost-cutting, which is an immediate concern for multinationals. It also attracts expanding corporates that require talented staff for a low rate. Both the Philippines and Vietnam offer competitive salaries. However, across the board, the Philippines offers lower rates for various outsourced positions.

This comparison chose positions that commonly outsourced: the call center agent, technical recruiter, and web developer positions. The following data is the annual salary of employees in those respective countries with at least 2-3 years’ experience.

One look at the comparison chart showcases how competitive Philippine labor costs are compared to Vietnam. For the Web Developer position, there is a massive 132.69% salary difference. The salary is $5,157 for the Philippines and $12,000 for Vietnam. There is also a considerable gap in the call center agent position. Philippine salaries cost just $3,928 annually and Vietnamese labor costs reaching $6,395. The technical recruiter position has less significant salary differences, but Filipino talent is still more affordable.

For companies that prioritize pricing, offshoring to the Philippines is the ideal option. It is proven to 67.68% cheaper than Vietnam.

Talent Pool

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The Philippines and Vietnam have largely different talent pools in terms of specialization. Vietnam looks to become the top player in data-related processes such as data capture, data categorization, and data updating while the Philippines dominate the call center and IT outsourcing industries .

Both countries also have a large number of graduates being produced every year. Vietnam welcomes 350,000+ graduates annually while the Philippines welcomes 700,000+ graduates, adding depth to each country’s respective workforce.

In terms of English fluency, however, the Philippines is leagues above Vietnam. The country has retained its high position as the second-best English speaking country in Asia and #14 worldwide. Meanwhile, Asia ranks Vietnam 7th in having moderate English proficiency and ranks 41st worldwide.

Infrastructure

Infrastructure

Building and connectivity infrastructure is essential in determining the quality of an outsourcing destination. Vietnam is currently developing LEED-certified buildings in Ho Chi Minh City. This steadily improves building infrastructure and helps with energy efficiency. Currently, there are only five internet service providers in the country, which leaves multinationals with limited internet plan options.

The Philippines, on the other hand, is home to more than 15 different ISPs that all offer fiber internet connection. The country homes 30+ LEED-certified buildings, which are energy efficient.

Overall, the clear choice for outsourcing operations between these two countries is the Philippines. For multinationals that require cost-efficient and talented virtual staff, the Philippines is the best country for leasing staff.

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