Great talent is everywhere. Vietnam has long been an important destination for talent outsourcing. With a vibrant start-up scene, a wealth of remote workers, and a low cost of living, it’s worthwhile looking into hiring talent in Vietnam.
But sometimes, the problem is legally hiring the talent you need. An Employer Of Record (EOR) is ideal for companies looking to hire and pay talent around the world without the legal hassle.
This article will walk you through the processes and advantages of hiring employees in Vietnam through an EOR.
Why Hire Talent in Vietnam?
Vietnam is one of the hot spots for Asia’s thriving start-up scene. Thanks to the low cost of living in Vietnam, many tech start-ups have set up shop here, creating an atmosphere of innovation and a great space for global networking. For example, Vietnam ranks first on the global index for crypto adoption, showcasing its future-ready outlook.
Over the years, the country has also established itself as an important market for talent outsourcing. There is a wide pool of skilled information technology hires, among other industries.
Another advantage of hiring employees in Vietnam is its proximity to several important Asian markets. Only a short flight from Singapore and China, Vietnam is ideal for businesses looking to expand into Asia.
The official language of Vietnam is Vietnamese. But the country also ranks #60 for English proficiency. Many professionals speak fluent English which facilitates communication and collaboration on your distributed team.
Notably, cost plays a significant role when hiring Vietnamese employees. Salaries remain well below the US and Canadian averages. So, it’s a good opportunity to save on human resources expenditures while employing some of the top global talent.
How Can I Legally Hire an Employee in Vietnam?
Things can get tricky if you want to legally hire talent in Vietnam on your own. For compliance, you must set up a local legal entity. However, navigating Vietnamese labor laws and regulations can be challenging.
This is where EORs come in handy. An EOR acts as a broker for hiring talent outside the country you legally operate in. It will already have an entity set up and the legal framework in place to do the hiring for you. You, on the other hand, will manage the relationship with your employees.
Going through an EOR is the easiest way to hire talent in Vietnam without all the legal hassle.
What Does an EOR Do?
Simply put, EORs take care of the legal procedures while you manage your employees. The legal frameworks for hiring in Vietnam can be quite different from those in the US and Canada. EORs handle worker visas and work permits, employment contracts, payroll, local compliance, termination, and other HR and financial services.
For example, did you know that employers in Vietnam cannot fire special categories of workers? Or that new mothers can take unpaid time off until the child turns 3? EORs will take care of this and so much more.
Contracts and Documentation
An EOR will handle the tedious administration of preparing and collecting contracts and documentation. This includes employment offers, signed contracts, banking information, and more so you can focus on growing your business.
Employee Insurance and Benefits
When the world is your competition, it pays to incentivize new and existing hires with attractive benefits like health insurance, and retirement savings plans. A comprehensive EOR will have those benefits built into its service offering.
Vacation and Public Holidays
In Vietnam, full-time employees are entitled to 12 days of annual leave after one year of employment. This number then increases by one day for every five years of tenure.
There are also several other types of leave to consider, such as maternity leave and sick leave. An EOR can keep track of all this and the corresponding payments for you.
Additionally, Vietnam has many statutory holidays that companies are obligated to provide to their employees.
- January 1: New Year’s Day
- 5-7 days in January or February: Lunar New Year
- April 30: Victory Day
- May 1: International Labor Day
- Varies: Hung King’s Festival
- September 2: Independence Day (2 days)
Taxes
Employers pay a range of taxes in Vietnam. They also owe social security contributions, which amount to just over 23% of an employee’s salary on average. They are required to contribute to social security, health, and professional risk funds.
This can be a tedious process but it is necessary to ensure you are paying employees in a compliant manner. Thankfully, an EOR can handle the logistics and ensure that payroll is processed correctly and per the regulations wherever you hire.
What Are Your Responsibilities?
While an EOR handles everything related to legal and HR processes, many aspects of the company’s workings fall under your purview. So, you take care of your staff as you would with your local hires.
That means search and recruitment, company onboarding, training, management, day-to-day communications, progress tracking, and so on should be managed by you.
The relationship with the employee won’t be all that different through EOR services, but you need to be clear with your staff on the legalities of their contracts. Of course, retention is also up to you. You will need to consider how you can help your staff grow and succeed in their new roles at your organization.
What Are the Advantages of Hiring Employees Through an EOR in Vietnam?
Using an EOR to hire talent in Vietnam will save you time, reduce costs, and mitigate risks.
Navigating the employment laws and regulations in Vietnam can be time-consuming and complex. Since an EOR is already set up to hire employees in the country, it will be faster and easier to start hiring right away. The process won’t differ very much from hiring locally.
Set-up and HR costs associated with independently hiring abroad can be quite high, so going through an EOR can save you money. You will also be paying lower salaries than in the US and Canada, so you’re bound to see some positive impact on your bottom line.
Most importantly, though, you’ll be mitigating the risks associated with non-compliance. Because EORs have extensive experience navigating complex employment and tax laws and regulations, you won’t have to worry about any issues arising.
How Do I Choose the Right EOR for Me?
There are a few key things to consider when you are selecting an EOR in Vietnam.
- Local Experience: Does the EOR have experience hiring in Vietnam? One of the biggest advantages of hiring an EOR is the assurance of compliance. Often, this requires a lot of experience, so check the EOR’s track record in the country.
- Service Scale: Do you need someone who offers a full suite of services? If you want happy employees that you can retain in the long run, you may need to offer them benefits like insurance and other welfare. Some EORs have systems in place for this, but others may not. Also, certain EORs will offer consulting services to optimize your global hiring practices.
- Data and Systems Security: Protecting intellectual property in a remote working environment is critical. Ensure your vendor of choice has a specific agreement outlining how they plan to keep your sensitive information safe and secure.
- Collaboration: Ensure your vendor’s approach to communication and client collaboration is aligned with your organization. Prefer having a quick and easy point of contact? Perhaps all you need is access to a Slack channel to quickly reach your vendor. Whatever your communication style, ensure your vendor can meet your needs.
Borderless: The Employer of Record Your Company Needs
Need an EOR? Look no further than Borderless. We can help you hire workers in Vietnam – giving you access to a highly-skilled talent pool without the headaches of traditional global expansion.
Book a demo today and see how we can help you quickly and easily hire, onboard, pay, and retain the Vietnam-based talent your organization needs.
Disclaimer
Borderless does not provide legal services or legal advice to anyone. This includes customers, contractors, employees, partners, and the general public. We are not lawyers or paralegals. Please read our full disclaimer here.
