Navigating the APAC Tech Talent Crunch: Why Singapore and Australia Are Looking to Vietnam

The Asia-Pacific (APAC) technology market, once known for rapid growth, is now facing a critical challenge: a widening talent shortage. In established tech hubs like Singapore and Australia, rising costs and a shrinking talent pool are slowing innovation and making it harder for businesses to scale.

In this article, we’ll explore how the talent crunch is driving up hiring costs in these markets, why Vietnam is emerging as a strategic solution, and how an Employer of Record (EOR) can help you expand quickly and compliantly. From understanding the pressures in mature markets to the opportunities in Vietnam’s growing workforce, this guide will give you the insights you need to stay competitive in APAC’s fast-moving tech landscape.

“77% of employers in the APAC region are struggling to find skilled talent, with the IT sector being the most heavily impacted at 81%.”

2025 ManpowerGroup survey

In Singapore, the situation is particularly acute. The nation is dealing with a reported shortage of tech talent of 79%. Despite its robust domestic talent pipeline, the demand for tech professionals far outstrips the supply. Projections indicate that Singapore will require an additional 1.2 million digitally skilled workers by 2025 to keep pace with its economic ambitions.

Similarly, Australia’s tech sector, while booming with an 8.7% market growth expected in 2025, is facing a mind-blowing shortage of its own. The Technology Council of Australia estimates that the country will need an additional 286,000 tech workers by 2025.

These figures highlight a market where demand for skilled professionals is soaring, but the supply is unable to meet the need, leading to intense competition for a limited talent pool.

While established tech hubs in the APAC struggle with growing talent shortages, Vietnam is rapidly emerging as a strategic alternative. With its thriving digital economy and a young, highly skilled workforce, the country offers a cost-effective and sustainable path for companies looking to scale.

Vietnam boasts a robust IT workforce of approximately 560,000 professionals. This is supported by a consistent influx of new talent, with 55,000 to 60,000 students graduating from computer science and IT-related majors annually. The population’s youthful median age of 33.1 years is a significant demographic advantage, guaranteeing a long-term supply of working-age talent.   

Beyond the quantity, the quality of Vietnamese professionals is highly regarded. Employers often describe Vietnamese developers as “technically proficient,” with a solid grounding in mathematics and science. They are also recognized for their excellent work ethic, eagerness to learn, and a modest, diligent approach. This combination of technical expertise and conscientiousness is highly valued and has contributed to a remarkable 111% rise in the international recruitment of high-skilled Vietnamese talent in 2024 alone.   

The most compelling argument for hiring in Vietnam is the profound cost-effectiveness. While a senior developer in Singapore commands an annual salary of up to $169,000, a senior developer in Vietnam can be hired for an hourly rate of $50 to $80. Additionally, industry reports indicate that Vietnam’s average IT outsourcing rates are 30-50% less than those in India or the Philippines, making it an even more financially attractive destination than other traditionally low-cost hubs.   

When financial savings are coupled with a high-quality talent pool, it creates a powerful value proposition. Companies can not only fill essential roles that are scarce in their home markets but can also do so at a price that enables them to expand operations, accelerate product development, and allocate resources more efficiently.

While the business case for hiring in Vietnam is compelling, navigating unfamiliar labor laws, tax obligations, and administrative requirements can be complex and daunting for foreign companies. This is where an Employer of Record (EOR) becomes not just beneficial but essential. An EOR acts as a legal employer for your workers, taking on the full legal responsibility for employment tasks, including payroll, benefits, and compliance.

An EOR service helps you navigate these key challenges:

Under Vietnam’s Labor Code, employment contracts must be in writing and signed before the first day of work, with specific terms on salary, working hours, and benefits. Rules around probation and termination are also tightly regulated, which can be challenging to navigate without local expertise. A Vietnam EOR Service Provider directly addresses this by drafting and managing compliant contracts, ensuring the client’s interests are protected from the outset. 

Employers are required to withhold Personal Income Tax (PIT) each month, file quarterly reports, and manage a progressive tax system ranging from 5% to 35%. On top of that, mandatory contributions to health insurance and pensions add another layer of complexity. A local EOR handles all aspects of payroll and taxes, from accurate salary and tax calculations to disbursement in local currency and timely submission of filings.   

Employees in Vietnam are entitled to at least 12 days of annual leave after one year of service, with regulated sick and parental leave. While not legally required, bonuses like the Tet (Lunar New Year) bonus are a key expectation for attracting and retaining talent. A local EOR manages both statutory and customary benefits, which allows your business to stay competitive without the administrative burden.

By partnering with an EOR Provider in Vietnam, your company can keep full control of your team’s day-to-day work, while the EOR handles all the administrative and legal complexities, making hiring in Vietnam seamless, compliant, and secure.