Navigating Vietnam’s IT market landscape in 2024

Navigating Vietnam’s IT market landscape in 2024

The past year has been a testament to the sector's resilience, marked by a notable shift in hiring demands and the adoption of strategic measures to retain and attract top talent. As companies navigate these challenges, the focus shifts towards innovative IT talent management strategies that respond to the evolving demands of the digital era.

Vietnam IT market in 2023: Resilience despite hiring decline 

The IT industry saw a significant downturn in hiring demands in 2023, with a 46% decline reported by ITviec's IT Recruiting Trends Report. Despite this, 75% of firms showcased remarkable resilience, experiencing moderate to high growth rates. Furthermore, only a minimal number of layoffs were reported, with 75% of organizations not experiencing any layoffs.

Additionally, companies demonstrated a commendable ability to maintain low turnover rates among IT employees, with 47.2% reporting slight turnover within the range of 1-10% - defined as employees quitting or leaving.

The sector managed to maintain or increase salaries for new IT hires in 2023 (52.8% and 37.5%, respectively), a move that reflects the competitive landscape for attracting IT talent.

Also according to the IT Recruiting Trend Report by ITviec, the top three most effective benefits/values that attracted new IT hires in 2023 were competitive salary, remote/hybrid work option, clear career paths and promotions.

That being said, even with the numerous challenges and the need to keep up with changing technologies and business demands, the industry's strategic responses have established a strong basis for continuous growth.

IT recruiting demonstrates a promising outlook for sustained resilience in 2024

A key aspect of navigating the Vietnam IT talent management landscape in 2024 is the strategic emphasis on retention and attraction.

Firms have been proactive in maintaining salary levels (78.3%) or opting for increases (21.7%) for new IT hires. This approach not only mitigates the impact of economic challenges but also positions these firms as attractive employers in a competitive job market.

The Ministry of Planning and Investment’s Foreign Investment Agency's report provides further evidence of the sector's resilience, showing a 38.6% increase in total FDI inflows, with a significant portion directed towards technology investments. This financial backing underscores the industry's potential for sustained growth and innovation.

27% of IT firms anticipate no growth, while most remain optimistic about expansion

As the industry grapples with stagnation and the need for sustainable growth strategies, a notable shift has occurred in companies' growth projections.

While 27% of respondents anticipated no growth, marking a five-year high in pessimism, a significant majority (73%) remained optimistic about team expansion and high growth prospects.

Specifically, 12.7% aimed to grow their IT team size by 31-50%, while 14.3% even planned expansions exceeding 50%. This balance between caution and ambition reflects a strategic adjustment to market realities.

In terms of job market dynamics, Back-end Developers, Full-stack Developers, and Front-end Developers represented 43.2% of all IT positions in demand in 2024, highlighting the critical importance of these roles.

As many as 58.7% of respondents reported that they would hire the most IT talents with the Senior level in 2024. Following of their priorities is Junior/Mid level with 32.6% in this year.

Top Vietnam IT companies prioritize talent management amidst economic uncertainty and AI technology advancements

Looking ahead, IT companies are focusing on enhancing team productivity and leveraging technological advancements to remain competitive. Prioritizing strategies that boost productivity and adopting transformative technologies like generative AI are seen as crucial steps for driving innovation.

Additionally, Vietnam Best IT Companies, such as Zuhlke Engineering Vietnam, KBTG Vietnam, Bosch Vietnam, Dirox, FireGroup and other top IT companies are actively providing development opportunities to their employees.

By promoting cross-functional learning, mentorship programs, and exposure to cutting-edge technologies, these companies are investing in their workforce's future. Employee engagement has also emerged as a priority, with over 80% of IT companies regularly assessing engagement levels.

According to the latest report by HRA, employees in Vietnam prioritize engaging in meaningful work, receiving recognition, and having autonomy. Based on these findings, IT companies can promote fulfillment by aligning tasks and goals with the company's mission, highlighting the broader impact of contributions, fostering community engagement, and ensuring recognition and rewards for achievements.

Additionally, providing clear career direction and autonomy in daily tasks, while fostering a positive and collaborative environment, can greatly enhance employee satisfaction and engagement.

Regarding the 2024 global and Vietnam economic outlook, less than 20% of hiring decision-makers express optimism, while the majority remain neutral or perceive it as stagnant. However, a significant portion anticipates a substantial increase in company revenue (35.6%) despite ongoing technology challenges (42.4%).

Amid ongoing shifts in the Vietnam’s IT market and forthcoming challenges, prioritizing talent management emerges as essential for resilience and growth. IT companies are priming for an innovative, competitive future by prioritizing talent, investing in development, and leveraging technology, including generative AI.

However, navigating technological and economic disruptions requires a disciplined approach, as Chris Howard from Gartner highlights, emphasizing the importance of evaluating strategic technology trends for business value while mitigating risks associated with AI adoption.

Cre: vietnamnet