Empowering Vietnamese businesses to succeed in global business landscape

In today's rapidly evolving global market, Vietnamese businesses are striving to stay competitive and resilient amid economic uncertainties. Faced with significant challenges such as workforce instability and a pronounced talent shortage, particularly in the burgeoning IT sector, HR departments are under pressure to find innovative solutions.

Job van der Voort, CEO and co-founder of Remote

Business expansion outpaces growth of staff

Talent scarcity compounds these issues. According to the Tech Talents Report by TopDev, Vietnam's IT sector is expected to need 700,000 professionals by 2025, but the current workforce is around 530,000, leaving a gap of nearly 200,000 skilled workers.

This talent deficit poses a dual challenge for businesses in Vietnam: finding innovative solutions to bridge the gap and demonstrating strategic leadership in optimising internal resources.

Investing in training and skills development is essential for improving labour quality and optimising resources. According to the World Economic Forum’s Future Career Trends 2023 report, macroeconomic changes and technological advancements will significantly alter job roles and required skills over the next five years. Key future skills include analytical and creative thinking, technological proficiency, and a commitment to lifelong learning, all of which underscore the necessity for a dynamic and adaptable workforce.

Despite these challenges, Vietnamese businesses, including small- and medium-sized enterprises (SMEs) and large enterprises, remain optimistic about their economic prospects.

A study by United Overseas Bank (UOB) found that nearly 90 per cent of Vietnamese businesses surveyed plan to expand overseas in the next three years. Over half of these businesses are motivated by the potential to increase revenue, improve profitability, and establish an international reputation. However, a significant obstacle is the lack of in-house talent and expertise to drive this expansion.

Key for businesses expanding into international markets

Businesses in Vietnam or companies looking to enter the Vietnamese market are expanding their operations and solving talent shortage issues through hiring global talent. Great talent exists all over the world, and being able to utilise various talents makes it easier for companies to expedite their localisation and operation.

However, hiring remote talent is not an easy task for any company, especially SMEs. Setting up a legal entity in a foreign country while creating a local in-house HR system is extremely costly and time-consuming, not to mention all the regulations and compliance, payments, and benefits that need careful attention. While expanding to some countries like the UK and the US might not cause major issues, some companies may face major difficulties just on entity setup.

While some companies choose to resolve all HR matters internally, leveraging the HR platform could be a more feasible option.

For example, Remote, a global HR platform, provides an employer of record (EOR) service that does all the heavy lifting. An EOR handles all the legal legwork of hiring in different countries and provides the infrastructure for sorting out taxes, payroll, benefits, and onboarding new employees.

EOR services from companies like Remote can empower companies to employ workers legally in over 80 countries without the need for setting up local legal entities. It’s important for businesses to select the right HR platform because it’ll greatly impact their growth and expansion.

The decision to expand a business globally is the first step. To succeed in the global dynamic business landscape, companies must consider setting up local talents to adapt faster in the local market.

According to UOB, 72 per cent of businesses in Vietnam have their eyes on Southeast Asia for their future expansion plans, and Thailand, Singapore, and Malaysia are the preferred Southeast Asia destinations for businesses in Vietnam.

These three locations have been researched and identified as ideal places for talented professionals to work, providing businesses with an opportunity to address the talent shortage problem.

To be more exact, in Remote’s Best Destinations Report, Thailand (Bangkok) was ranked 16^th, Malaysia (Kuala Lumpur) was ranked 22^nd, and Singapore was ranked 78^th out of the 100 best places for remote work.

These rankings represent the overall attractiveness of remote work, which implies companies can leverage this chance to hire global talent in those areas and grasp better market knowledge to succeed faster. Additionally, the Remote Workforce Report found that 72 per cent of employers with international remote teams surveyed saw increased productivity and 69 per cent experienced increased retention. Furthermore, 57 per cent mentioned that it was easier to hire and retain talent with a remote workforce.

Navigating the complex landscape of classifying workers correctly, particularly across borders, presents a formidable challenge.

Misclassification can lead to serious legal ramifications, such as when a full-time remote employee is mistakenly classified as an independent contractor.

In Vietnam, misclassifying your employees involves incorrectly classifying your workers as independent contractors to deny them access to critical benefits like healthcare, without providing adequate compensation.

Vietnamese authorities may consider any case of misclassifying employees as deliberate and may impose fines or order you to pay damages for any benefits a worker should have been entitled to.

This may differ in other countries: having a written agreement that specifies a worker as a contractor isn’t enough in most countries. It's also essential to recognise that remote workers do not automatically qualify as independent contractors simply because they work from another country or home.

Contractors are distinct legal entities entitled to specific rights, including autonomy in their work, the freedom to work for multiple clients, and control over their work schedule and payment terms. Ultimately, countries decide if someone is an employee or contractor by looking at the details of their work.

HR platforms like Remote are used by companies because the all-in-one platform offers legal, financial, and cultural expertise to onboard, pay, and manage employees and contractors in 200+ countries and jurisdictions.

From remote talent acquisition to HR management, Remote simplifies HR problems for all businesses. Tap into a distributed workforce and expand without having to worry about cost and time.

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