Cost to run an offshore service in Viet Nam

Cost to run an offshore service in Viet Nam

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Run an offshore development center

If this is the first time you hire a remote team, Turing Alley suggests we could start with a small software development team. It's more productive. It's easier to coordinate and recognize the individual teammate contributions. Therefore, the ideal size should be around 3~5 people.

We maintain the same cost between building the in-house team and build an offshore team with Turing Alley. Let’s say you want to expand at the smallest scale to minimize the spending. The team structure will be something like this:

  • One senior backend engineer (5~6 years of experience) as the team leader
  • One junior frontend engineer (2 years of experience)
  • One junior mobile developer (2 years of experience)

Hiring gross salary

Untitled

NameSenior backend 5 yrs as a team lead ($)Frontend Engineer 2yrs ($)Mobile Developer 2yrs ($)
Monthly Gross Salary
2,300
700
1,000
Monthly social insurance, heath insurance and unemployment insurance (Vietnam)*
540.5
164.5
235
Annual Hiring Cost Subtotal
34,086
10,374
14,820

*23.5% of Gross salary

You are paying $59,280 annually for an offshore tech team of 3 people in Vietnam. However, this is only the cost of recruitment and we still have to take care of their welfare and other benefits to improve employee retention.

Welfare and benefit-cost

Due to a large and rapidly expanding demand, the software business has the greatest turnover rate at over 13%, leaving many engineers feeling underpaid. They might feel their employer can't keep up with the market and their increasing skills. This makes employee benefits and compensation become essential.

image

Untitled

NameTeam Lead 5yrs ($)Frontend Engineer 2yrs ($)Mobile Developer 2yrs ($)
Annual Office*
3,600
3,600
3,600
Annual Company trip and Party
1,700
1,700
1,700
Annual Wage Supplement (13th Month)**
2,300
700
1,000
Equipment Expense (Macbook M1 air 16gb + Monitor)
2,000
2,000
2,000
Annual Medical Checkup Cost
180
180
180
Annual Medical Checkup Cost
58
58
58
Annual Optional Welfare***
768
768
768
Annual Cost Subtotal
10,606
9,006
9,306

*min $300/position of the co-working space in district 1,2,3,4.

**The 13th month equals 1 month of gross salary

***In the Vietnamese culture, having gifts, bonuses, and incentives is a big thing as it shows that the company cares about their employees

With the additional $28,918  from welfare and employee benefit.

Overall

Your offshore tech team of 3 people will cost $88,198 per year ($7350 monthly) to set up and run. The number might not seem impressive at first glance, but they are:

  • 40% cheaper** than hiring local developers in Singapore.
  • 15% cheaper** than hiring an onsite developer
  • Better quality control than outsourcing

Turing Alley

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