Philippines vs. Vietnam: Which Country is the Best for IT Outsourcing?

In this blog, we’ll delve into the comparison of the two countries across various factors:

Availability of skilled talent:

Vietnam has a larger pool of skilled software engineers than the Philippines, with over 500,000 graduates in IT-related fields every year. This means that businesses can have a wider range of choices when selecting an outsourcing partner in Vietnam.

English proficiency:

The Philippines generally has a higher level of English proficiency compared to Vietnam, mainly because English is the official language in the Philippines. This can make it easier for businesses to communicate with their outsourcing partners.

Cost of labor:

When comparing labor costs for IT outsourcing between Vietnam and the Philippines, it is evident that both countries offer competitive rates. Vietnam stands out as a cost-effective option, with average hourly rates for senior IT professionals ranging from $30 to $35, making it approximately 90% cheaper than US labor and 30% to 40% cheaper than China.

On the other hand, the Philippines offers slightly higher rates of $36 to $40 for senior IT professionals, but still remains an attractive offshore software outsourcing destination, ranking fifth among the top 50 digital nations.

Time zone:

Vietnam is 11 hours ahead of Pacific Standard Time (PST), while the Philippines is 12 hours ahead of PST. This means that there is a one-hour time difference between Vietnam and the Philippines. For most businesses, this would not make much difference.

Cultural alignment:

Vietnam shares a cultural history with many Western nations, influenced by a long and intricate relationship with various foreign powers, allowing for the integration of diverse cultural aspects, which can make it easier for businesses to integrate their outsourcing partners into their corporate culture.

Government support:

Vietnam offers cost-effective solutions for IT outsourcing with a dynamic environment, strong economic growth, and attractive government policies that encourage foreign investment. 

Meanwhile, the Philippines provides well-established IT support and contact centers, a supportive government, and cultural compatibility with the United States.

In conclusion, both the Philippines and Vietnam offer a variety of advantages and disadvantages as destinations for IT outsourcing. 

Ultimately, the choice between the Philippines and Vietnam will depend on the specific needs and priorities of each individual or organization. Those seeking a larger IT talent pool, lower labor costs, and a more favorable time zone, especially for businesses in Europe, may find Vietnam to be the better choice. 

On the other hand, for those seeking a more established IT industry, English proficiency, and a supportive government, the Philippines may be the better choice.