Outsourcing in Asia: Philippines vs. Vietnam

Established in the previous article on the outsourcing industries of the Philippines and India, the Philippines is now a top-of-mind option for acquiring skilled talent, making Staff Leasing in the Philippines one of the most effective methods to cut down salary costs while augmenting 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 to determine which offshoring destination is superior.

Salary Costs

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

The positions chosen for this comparison are ones that are 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, with $5,157 for the Philippines and $12,000 for Vietnam. There is also a considerable gap in the call center agent position, with Philippine salaries costing 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.

Overall, outsourcing to the Philippines is 67.68% cheaper compared to Vietnam, so for companies that prioritize pricing, offshoring to the Philippines is the ideal option.

Talent Pool

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

Both countries also have a large number of graduates every year, with Vietnam producing 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, Vietnam is listed as having moderate English proficiency, ranking seventh in Asia and 41st worldwide.

Infrastructure

Building and connectivity infrastructure is essential in determining the quality of an outsourcing destination. Vietnam is steadily improving in terms of building infrastructure, with LEED-certified buildings being developed throughout Ho Chi Minh City. Despite this, the country is severely lacking in connectivity. 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 is also home to 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.

KMC offers Staff Leasing in the Philippines for expanding multinationals and corporates alike. For more information, visit our website through the button below.