Shortage of Indian IT talent in Vietnam while demand rising
In 2021, Vietnam needs 450,000 IT professionals, but the filled positions currently only reach about 430,000, according to TopDev’s Vietnam IT market report. This creates a huge gap between the demand and supply. Meanwhile, some businesses are facing difficulty recruiting Indian IT engineers because Covid-19 prevents travelling. Vaibhav Saxena, Chairman Vice of Indian Business Chamber in Vietnam shared some thoughts on the shortage and proposed solutions.
Mr Vaibhav Saxena, Chairman Vice of Indian Business Chamber in Vietnam
- What is your comment on the shortage of Indian IT engineers in Vietnam recently?
In the context of the complicated development of the Covid-19 epidemic, experts predict that in 2021, the demand for human resources in the information technology industry will increase, while adding this can be challenging due to unstable market conditions.
Government promoted digital transformation, technology 4.0, new businesses (enterprises) in the IT field came out, leading to fierce competition, hence the immediate demand for human resources are yet to be met.
Recruitment demand in the IT field has recovered quickly after the second Covid-19 pandemic wave but, again hit largely due to the current pandemic crisis. Businesses continue to recruit, but focus on quality personnel with the most up-to-date technologies, in order to increase the competitiveness of products and services. Despite the Covid-19 epidemic, there are many companies in this field that are in great demand for development with a plan to recruit 1,000+ IT engineers in 2021.
Each year, there are approximately 200+ Indian IT engineers working in Vietnam. The Ministry of Information and Communications of Vietnam records around 23+ Indian companies who invested in Vietnam in the IT field. This number is not commensurate with the potential of Vietnam’s IT industry as well as the potential for cooperation between the two countries in this field, especially when India is considered a powerhouse in software and IT services in the world and to fulfil the dream of Vietnam to become the IT hub of South-East Asia.
- Will workforce localization ease this shortage for a while?
Information technology is an industry that requires foreign candidates and with a mix of locals. Vietnamese industry meets certain required skills for certain technologies, management sizes and business models, for the new technology segment, businesses in this industry are looking for foreign candidates, and to support domestic capacity building. Although, as Asians we tend to have a west-centric mind-set but that is changing as the world looks at Asia being the future. There are Indian professionals driving global IT chains around the globe and benefitting the global IT industry to better support human life on our planet.
Every year, I think Vietnam has about 50,000 students graduating in the information technology stream. These numbers may meet the demand for quantity, but may be only 1/3 of it can meet the highly advanced requirements of the businesses.
The foundation of the schools for students is there, but it is necessary for the businesses to join hands in training human resources for this industry. Technical expertise combined with English business language skills can create positive impressions on the IT sector of Vietnam.
Outsourcing companies are doing a great job, creating jobs and bringing in foreign currency. However, there are many universities with input and output engineers of other degrees that can supply these companies with human resources. The way I see it is that Vietnam surely has great potential and the young generation forms a big strength. A country with a population of around 100 million shall require in-house capacity building to grow the domestic industry in a sustainable and self-sufficient manner.
- Will remote IT services from India help?
India has for many years been considered the world leader in business process outsourcing (BPO). But time has changed and India focuses more on real innovation and self-reliance (Atmanirbhar Bharat). Vietnam is currently emerging as a potential IT outsourcing center, and known as a high potential outsourcing workshop in South-East Asia.
Vietnam’s growth in the BPO industry has been consistent at around 20 to 35 percent every year over the last decade. According to Vietnam Software and IT Services Association (VINASA), the industry turned over US$2 billion with 70 percent of the industry revenue coming from Japan.
With more than 50,000 IT graduates a year, the industry is growing rapidly. Students have a strong interest in computer science and have exposure to it at a younger age than people in Western cultures. This provides a large talent pool for international companies to draw from.
- How can Vietnam get ahead of the IT engineers shortage?
Since the 1990s, India has been playing an important role in providing high quality IT human resources to the world. In order to have high-quality IT human resources, India has established the National Association of Software and Service Companies (NASSCOM) with the task of researching and developing the national IT industry.
India’s IT education and training system has been expanded, including 2,579 formal training units and 2,300 informal training units (United Nations (2001), Human Resource Development for Information Technology). The Indian government also encourages the private sector to participate in the national IT training system. To avoid brain drain, the Government of India also implements migration policy by industry. Besides, the Government of India also encourages the development of IT centers of foreigners in India.
India is suffering from Covid-19 like any other country in the world. If we see precisely then the Indian IT and several other industries are booming. India has been countering Covid-19 to the fullest extent and it is a far bigger challenge for a democracy with 1.4 billion populations than any other country has ever experienced. Since the Covid-19 pandemic, Indian IT companies have posted record profits since December last year. In its April 2021 earnings report, Wipro expects 2-4% growth in IT services revenue, reaching US$2,195-2,238 billion. Developments in this area are also prompting companies to hire more staff and raise wages to retain talent. Earlier this year, TCS said it had increased wages for employees from April 1. This is the 2nd salary increase in 6 months. Previously, in October 2020, Infosys announced a decision on salary increase and promotion programs, starting from January 2021.
From the practice of developing IT human resources in India, some experiences can be drawn for the Vietnam Government to develop IT human resources in Vietnam as follows:
Firstly, clearly define the responsibilities of IT vocational training to develop programs suitable to the actual needs of society, build a system of IT professions and focus on improving practical skills for students. In addition, it is necessary to study international advanced training programs and adjust training programs to suit the development of IT in the world.
Secondly, perform well the statistical work of forecasting the development of the IT industry and human resource demand for that development. It is possible to forecast through surveying the labour demand of enterprises, and at the same time studying the trend of world IT human resource development.
Thirdly, expand the scale and innovate training content and methods to suit the development of the industry. The reality of IT human resource training in Vietnam shows that the training scale is still thin. Currently, the system of IT training and retraining institutions in Vietnam only includes universities, colleges, intermediate schools and vocational schools, mainly focusing on training and retraining to grant diplomas and vocational certificates such as web design, programming, office computing according to self-established or copied foreign programs. Therefore, it is necessary to focus on renovating IT training in the general education system, and at the same time equipping infrastructure, investing, and improving methods and contents in training programs.
Fourthly, re-train existing IT human resources. The characteristics of the IT industry are short product life cycles, constantly changing technology, so retraining is inevitable. The content of retraining IT workers should focus on adding some specialized knowledge about IT that the training programs are no longer relevant to reality, adding some other specialized knowledge to serve the public, management or design of information systems. Retraining can be done through on-the-job training, on-the-job training or hiring reputable training units etc.
Fifthly, develop policies to attract high-quality IT human resources. Vietnam needs to encourage investment in IT, attract international IT corporations as a focal point, and expand cooperation between domestic training institutions and foreign partners in training human resources, create favorable conditions on mechanisms and policies for the world’s major IT corporations to invest and expand cooperation programs in training IT human resources with Vietnam. In addition, it is necessary to have a remuneration regime such as training to improve qualifications and working skills, rewarding and creating conditions for career advancement, gradually building e-government, and allocating budgets for nominating Vietnam’s IT human resources team going to study doctoral and master’s degrees in IT advanced countries like India.
- India and Vietnam are promoting the collaboration relationship. Will this impact the future growth of the IT industry in Vietnam?
About 40 – 50 Indian businesses are eyeing investments in Vietnam when the Covid-19 epidemic is under control and commercial flights are licensed. India has proved itself to be the global leader in the IT sector and with world class education standards in the IT field in the country. Capacity building is the need of hour for Vietnam and surely, as the pandemic ends and travel resumes to normal, we expect to see a huge IT boom for Vietnam and with the support from its closest friend India. Both the countries had always been there for each other in all terms and the IT sector will change the way Vietnam works and we will see Indian businesses to form an integral part of digital Vietnam.
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