No picnic in the park for Vietnam's budding IT industry

By Thao Vi, Thanh Nien News

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A woman leaves an office of TMA Solutions in Quang Trung software park, District 12, Ho Chi Minh City. Photo: Thao Vi A woman leaves an office of TMA Solutions in Quang Trung software park, District 12, Ho Chi Minh City. Photo: Thao Vi

Talents are very hard to find, a problem that can threaten long-term growth of the emerging outsourcing destination


From the outside it does not look much different from most of the parks elsewhere in Ho Chi Minh City. Large trees, green lawns and young people in casual wears give out a sense of relaxation.
But inside the Quang Trung Software City, commonly known as the Software Park, it is a completely different world.
Pick any of the 121 companies for a visit and it will become clear that everybody here is all about business.
IT engineers, mostly in their 20s, hardly pay attention to intruders. They glue their eyes, and their thick glasses, on computer screens while their fingers move fast on worn-out keyboards. The female engineers -- surprisingly there are many of them -- test the programs developed by their male colleagues. No talking. And no phones. 
Germany-invested DIGI-TEXX Vietnam, which occupies a futuristic building, is particularly serious about work.
Visitors are required to leave their phones, cameras and bags at the reception room. The next room has a large screen showing all activities in different rooms and corridors captured by CCTV cameras.
“All of our employees must also leave their phones here,” says Nguyen Thi Phuong Thao, CEO of the company. “This is because we develop products for clients who require confidentiality, including those in the banking and healthcare sectors.”
The company's professionalism and discipline are just impressive considering the large number of employees on its payroll. It is now managing a big team of more than 700 that works 24/7, all year round.
"We have three eight-hour shifts. We let employees work on a fixed shift so that IT students from colleges right here in the park can join the third shift from 10 p.m. to 6 a.m. after school," Thao says.
Hiring students before they even graduate has become a popular practice in Vietnam's relatively young IT industry. The quick growth has put pressure on the local talent pool and recruiters.
Fifteen years ago, the country barely had any IT companies. Now it is home to around 14,000 businesses focusing on hardware, software and digital content.
But with only 40,000 IT graduates every year, many companies find it stressful to recruit enough employees, especially high-skilled ones.
Insiders say, more than other sectors, the IT industry makes or breaks with the skills of its workforce. And right now, it is having a recruitment crisis.
Cheap labor, but...
Nguyen Cong Ai, vice president of financial advisor KPMG, said that even though Vietnam has become an alternative destination for IT outsourcing, in lieu of China or India, thanks to its competitive labor cost, many companies complain about a lack of highly-skilled IT engineers.
“Eighty percent of respondents said that it’s difficult to find good talents,” Ai told the Vietnam IT Outsourcing Conference in Ho Chi Minh City in mid-October, quoting a survey by his firm on 80 IT companies operating in Quang Trung.
Language skills remain a barrier with 87 percent of respondents rating IT engineers at either average or below average, he said.
Nguyen Phuong Mai, regional director of recruiting firm Navigos Group, agreed.
“For new investors who are preparing to come to Vietnam and invest in Vietnam in this area, and also for the current companies, we all need to be aware of some challenges in finding good talents here,” Mai told the conference.
She said many foreign-invested companies are coming to Vietnam, leading to a ballooning demand for high-quality engineers.
Navigos’s database showed that the demand for high-skilled software developers so far this year has jumped by 34 percent, compared to the same period of last year.
Mai said job orders come from foreign companies which want to set up data center or invest in game and mobile software development. She added that many local companies are also receiving more contracts from clients all over the world and thus looking for employees too.
“Talents supply is increasing, but it doesn’t catch up with the pace,” said Mai.
But Mai also said she has seen a big trend that Vietnamese people who study abroad and work abroad for some time are returning home.
This can help “fill the gap,” she said. 
Mai pointed out that local companies are also bringing foreign specialists to Vietnam to train their local team. 
Russian-invested Luxoft, located in the same building as DIGI-TEXX, is one of them.
Inside the company, a group of European engineers in knee length shorts can often be seen working alongside Vietnamese peers.
“We regularly send Vietnamese engineers abroad to join training courses or bring foreign engineers to Vietnam to train local ones,” a representative said. “It’s costly but necessary.”
Middle ground
Graphic from KMPG Limited based on data provided by Adecco 
Pham Binh Nguyen, chief technology officer at Japan-based cloud services provider Gianty, said while Vietnamese engineers are not as skillful as their peers in China and India, they are better than engineers in other countries.
“We select Vietnam as China and India have high labor costs while other countries do not have a labor force as skilful as Vietnam’s,” said Nguyen.
This year the average gross monthly salary in Vietnam is US$569 and $2,049 for programmer and IT manager positions respectively, or only around 25-35 percent of the figures in China, according Switzerland-based human resources services provider Adecco.
Industry insiders agree that at some point in its development, the industry will have to get rid of the "just good enough" mentality and stop using its low cost as the main competitive edge. 
Nguyen Huu Le, considered one of the pioneers of the local IT industry, said without a high-skilled workforce, the whole sector will not be able to fulfill its promises. 
Le, chairman of TMA Solutions, one of the top 10 software outsourcing companies by revenue, said Vietnamese IT graduates have weaknesses in communications in foreign languages, including English and Japanese, and lack assertiveness.
“This is because the education system in Vietnam has not encouraged that,” said the 66-year-old Vietnamese Australian. He returned to Vietnam in 2000 to "leverage the human capital of Vietnam to provide quality software services for foreign markets."
Le said he noticed that Vietnamese students "normally just attend the class, study the book, write the exam and get a piece of paper.”
As the result, the gap between the skills of new graduates, even from top universities, and what companies need to participate in the software outsourcing industry to serve foreign customers is still very large. 
Le said everybody can see this problem, but there has been a lack of effective action. 
“There were a lot of talks in the last several years about the lack of quality resources to support the software industry in Vietnam. And we cannot wait.”
To narrow the gap, Le said his company has spent 10 percent of its expenditure on training. 
But even as his firm trains 500-600 students every year in its own training centers and through partnership programs with universities, it can only recruit 40 percent of these students and has to find other employees elsewhere.
"More ore than gold," Le said.

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