Offshoring to Vietnam, Malaysia, and the Philippines: A quick comparison

Which is best for offshoring: Vietnam, Malaysia, or the Philippines?

Offshoring to Vietnam, Malaysia, and the Philippines each wins in a different area, so the best choice depends on your goals.

• Vietnam is strong for software development and low-cost tech talent.
• Malaysia offers solid infrastructure and strict data privacy laws.
• The Philippines leads in English skills and back-office work.

For decades, firms have looked to Asia for top offshoring destinations. The Philippines and India led the way. However, neighbors like Vietnam, Malaysia, and Singapore now share the spotlight in many business areas. It also helps to know how offshoring and outsourcing differ before you choose.

Offshoring firms such as AS White Global have helped these countries grow. The company now runs offices in three places: Vietnam, the Philippines, and Malaysia.

Daniel Breese, its general manager, spoke with Derek Gallimore of the Outsource Accelerator Podcast. He shared the strengths of each country. He also explained the best way to hire quality offshore staff.

Offshoring to Vietnam

Vietnam is now seen as one of the rising offshoring hubs in Asia. It has ranked well on the Tholons Digital Nations report and the A.T. Kearney Global Services Location Index. As a result, more global firms take notice.

The country also leans heavily on IT work, mainly software development. Meanwhile, it runs a smaller economy than India. Still, its talent is highly sought after. In fact, many global brands have set up tech hubs in Ho Chi Minh City. This trend mirrors why Vietnam is becoming a serious outsourcing destination.

Why companies outsource to Vietnam

For example, ASW Global built successful dev teams in Vietnam. According to Daniel, hiring there has been “somewhat of a unicorn story.” Firms are drawn to Vietnam for these reasons.

• High-quality work. Developers in Vietnam show strong drive. They deliver high standards and earn praise for their work ethic.
• Leverage cost. Tech salaries keep rising fast worldwide. So the cost of dev talent in Vietnam looks very attractive. Firms can often double or triple team size for the same Western budget.
• Educated labor force. Vietnam adds skilled graduates each year. In addition, Australian universities such as RMIT run a campus in Ho Chi Minh City.

However, Daniel warned that language can hold firms back. So he advised hiring a team leader with strong English skills. That way, the team can connect with clients more easily.

On the bright side, English is now woven into the school system. As a result, more young workers join with the English skills they need at work.

Offshoring to Malaysia

Malaysia was a late bloomer, yet it keeps rising as an offshoring power in Asia. It ranked 33rd in the Tholons Digital Nations Index at one point. Still, the sector adds real value to its economy.

At first, Malaysia began as a hub for manufacturing and support work. More recently, it has moved into IT outsourcing. It now runs many business and school programs to grow the sector further.

Why companies outsource to Malaysia

Per Daniel, ASW Global grew into Malaysia to meet its need for skilled IT talent. He said the country has clear strengths.

• Steady infrastructure. Daniel said Malaysia is more developed than the southern Philippines in this area.
• Stable workforce. The country adds a steady supply of skilled workers each year.
• Privacy laws. Malaysia is known for strict data privacy rules. So it suits firms that want strong data protection.
• Multi-cultural diversity. Malaysia is an ideal base to reach Hong Kong, China, Singapore, and Australia.

Offshoring to the Philippines

The Philippines keeps delivering strong results in offshoring. It sits as a leading destination next to India. Known as the “BPO capital of the world,” it has a bright future ahead.

In addition, the country suits a wide range of services. These include IT, customer service, and back-office work. As a result, many firms build core teams here. You can learn more about outsourcing to the Philippines before you decide.

Why companies outsource to the Philippines

ASW Global saw the Philippines as the best spot in Asia for business admin work. The country also suits Western firms in these ways.

• English proficiency. Unlike in Vietnam, Daniel said, firms can talk with Filipino teams with ease. Their English skills are strong.
• Wide range of services. The Philippines is a top base for back office, IT, and front office work.
• Cultural compatibility. Among its Asian neighbors, it fits Western culture the closest.

However, many firms still prefer office work over home setups here. The reason is simple. Connectivity and equipment security are harder to assure at home. In some areas, internet speeds are still weak.

ASW Global on hiring offshore staff

So which of the three countries is best for an offshore team? The honest answer is that it depends on your goals.

As Daniel noted, each location has its own strengths and gaps. So it helps to weigh your aims first. For example, you could run development and support in Malaysia. Meanwhile, back-office work could sit in the Philippines. This kind of offshore staffing setup lets each team play to its strength.

Still, first-time firms should co-locate their teams. This keeps talk and teamwork simple, since staff sit in one country. It also weighs on the pros and cons of offshore outsourcing that shape any move.

Today, ASW Global runs offices in three countries. Overall, it aims to grow in more developing markets with strong talent. This gives local workers a chance to improve their lives and build the tech sector. Check out their website for more, and listen to the latest episode of the Outsource Accelerator podcast here.

Frequently asked questions about offshoring to Vietnam, Malaysia, and the Philippines

Which country is cheapest for offshoring?

Vietnam often wins on cost for tech and software work. Still, the total value depends on skills, quality, and delivery, not just price.

Where should I offshore software development?

Vietnam is a strong pick for software work. In fact, its developers deliver high quality at an attractive cost.

Why do firms offshore to the Philippines?

The Philippines leads in English skills and cultural fit. It also suits back office, IT, and customer service work.

What makes Malaysia stand out?

Malaysia offers steady infrastructure and strict data privacy laws. So it suits firms that value security and a stable base.

Can I use more than one country at once?

Yes. Many firms split work by strength. For example, development can sit in Malaysia while back-office work runs in the Philippines.

Key takeaways

• Vietnam is best for low-cost, high-quality software development.
• Malaysia offers strong infrastructure and strict data privacy rules.
• The Philippines leads in English skills and back-office work.
• First-time firms should co-locate teams to keep work simple.
• The best choice depends on your goals, not on popularity alone.