Businesses seek cost-cutting measures and explore new hiring opportunities

The economic downturn has led companies worldwide to downsize and reduce their workforce. However, despite these challenges, Vietnam and the Philippines have shown resilience and continue to attract job opportunities from the Asia-Pacific (APAC) region. According to Recruitery, there has been a significant increase in their Employer of Record (EOR) and payroll services for companies hiring from these countries, with a 300 per cent growth in Q1 2023 compared to the same period last year. On the other hand, jobs from domestic employers have decreased by 51 per cent.

Vietnam is attracting jobs in software development, product management, marketing, and accounting roles, while the Philippines is a preferred destination for educational expertise, customer service, and sales positions, according to Toan Nguyen, the founder and CEO of Recruitery.

There are several key drivers contributing to this trend:

• Cost savings: Companies worldwide are looking to reduce costs, and hiring talent from developing countries such as Vietnam, India, and the Philippines provides access to skilled professionals at affordable rates.
• Proximity and cultural ties: Vietnam and the Philippines have regional proximity and cultural connections with countries like Singapore, Japan, South Korea, and Hong Kong. This makes employment and collaboration easier, as there are fewer language and cultural barriers.
• Growing talent pool: Vietnam has a population of over 97 million, with more than 50 per cent of its citizens under the age of 30. The Vietnamese government has set ambitious targets to create a pool of 1.3 million IT workers by 2025, demonstrating their commitment to developing a skilled workforce. Similarly, the Philippines has over 100 million people, with more than 60 per cent of the population under the age of 30. The country’s strong emphasis on English-language education makes it an attractive option for businesses seeking an English-speaking labour force across various fields.

To facilitate the hiring process in different countries, global payroll, and Employer of Record (EOR) solutions like Deel, Recruitery, and Remote have emerged. These solutions allow companies to form teams in any country without the need for a local entity, unlocking the benefits of geo-arbitrage. This strategy has become increasingly popular as businesses seek cost-cutting measures and explore hiring opportunities in developing countries.

In addition to the talent attraction, Southeast Asia, particularly Vietnam, has become an appealing destination for companies looking to shift their production from China due to geopolitical tensions. Vietnam offers a skilled and cost-effective workforce, a stable government, and a growing focus on high-tech industries. Companies such as Samsung and Bosch are investing in research and development (R&D) centres in Vietnam, further fuelling the shift of operations from China to Southeast Asia. This trend is expected to continue as companies diversify their supply chains away from China to mitigate rising costs and geopolitical risks.

Tags: The PhilippinesVietnam