Hiring remote employees in Vietnam

Define remotely working

Remote employee or remote worker meaning someone who works for a company but does not work in a traditional office setting. Remote employees usually work from different cities or even countries.

Many businesses have decided to go global in recent years, with ambitious expansion plans. These goals are linked to the hiring demand in the target markets/countries. As a result of this activity, there is an increasing number of remote job openings, putting companies under pressure to manage remote employees.

Remote hiring in Vietnam

Within the last two decades, the number of companies seeking to recruit in Vietnam has skyrocketed. In comparison to neighboring markets, Vietnam offers an advantageous human resource with a large volume, increasing quality, and lower employment costs. This reality offers an enticing expansion opportunity with untapped potential for companies looking to expand globally.

In order to take advantage of this human resource, numerous companies have established a physical presence (office, business entity) in the country. However, many others chose to hire and manage a team in Vietnam remotely rather than establishing their own company.

More companies and employees in Vietnam prefer to work from home to avoid a crowded office working environment, especially after the pandemic outbreak in 2020. Because of this, a “remote job” becomes more appealing. All of this contributes to the reality of a large number of remote employees in Vietnam, which appears to be increasing in the future.

Challenges of managing remote employees

Many HR professionals from multinational corporations found it difficult to adjust to the hiring reality in Vietnam. The major challenges in managing remote staff in Vietnam are the differences in language, working conditions, working culture, employment law and practices. The challenge is magnified many times if the employer is from another country.

The Vietnam Labor Law

Vietnam labor law is well-known for being extremely protective of employees. Aside from the law, there are a variety of other legal documents that influence the labor contract and specify the employer’s duties and responsibilities. Without a thorough understanding of this legal framework, the employer is vulnerable to making mistakes that could lead to future disputes or penalties.

Read more: Understanding Vietnam employment practice, law and culture.

Vietnam state insurances

Vietnam has a law requiring mandatory state insurance, which is imposed on all labor contracts. This is important to many people in Vietnam because it aims to protect the benefits of employees. When a person has a labor contract with a Vietnamese entity, he or she can be enrolled in the state insurance system. As a result, these advantages are not inherent in freelance work. The same is true for remote jobs that are not performed under the authority of a Vietnamese entity.

Vietnam unwritten employment practices

Aside from the laws, there are a number of unwritten employment practices in Vietnam that any employer should be aware of if they do not want to lose talent to competitors, such as the 13th-month salary, insurances, healthcare, petty allowances, team building activities, vacation treatments, lucky money, and so on.

Vietnamese Employees’ career preferences

Vietnamese employees continue to have a strong sense of job security. Having a remote job where the employer does not have a presence in Vietnam adds to the uncertainty. It is suggested that the employer of such a remote position balances the situation with a nominee employment arrangement that allows their staff to become subject to full-time legal employment.

Working culture and environment

Leading from distance has always been a challenge, especially when the employer and employees do not live in the same city or country. More than 75% of our clients came to VNBG with the following questions: “How to show staff appreciation remotely?”,
‘How to increase remote employee retention?”. It demonstrates how difficult it is for them to find an effective solution to create a healthy and strong working culture for their team in Vietnam.
Especially during pandemics when employees are in a real crisis but the parent company is not physically present to support them, managing a team remotely in Vietnam during Covid has taken the challenge to a whole new level.

Managing remote employees in Vietnam

Managing remote teams in Vietnam necessitates its own set of success factors. The general rule is to make your employees feel “secure” in their current position.

Hundreds of multinational corporations have attempted to bridge the gap between a remote job and a regular full-time job, at least in the eyes of their employees. When they see no difference, they are less likely to be attracted by other employers, resulting in a low turnover rate. This happens when the company never stops motivating remote teams.

Being hired by a company overseas previously means that the individual will be paid directly by the overseas entity and will not be subject to Vietnamese state insurance or progressive taxation. Nowadays, all of the benefits mentioned above can be obtained through the use of nominee employment. This is called Employer of Record (EOR) service – the best practice for managing remote employees in Vietnam at the moment.

Employer of Record, or a record of employment, plays a critical role in assisting business expansion while minimizing costs and legal risks. Because the labor contract will be signed between the employees and the EOR company in Vietnam, the actual employer, the company overseas, will avoid the risk of violating Vietnamese labor law. All of the employer’s burdens and responsibilities will be transferred to the EOR or PEO company that provides the services.

Based on the knowledge and insights of the local labor market, the EOR or PEO company in Vietnam will be able to advise on recruitment or hiring strategies. As the EOR or PEO firms are well-established in Vietnam, they will be able to assist you in overcoming language and cultural barriers in hiring. They can frequently act as a liaison between you and your staff in Vietnam.

VNBG Employer of Record (EOR)

VNBG is one of the most prominent employers of Record companies in the Vietnam market. Companies entrusted VNBG EOR service to minimize all the complications and vicissitudes related to human resources operations and managing remote teams in Vietnam.

In this sense, VNBG will formally become the employer of our client’s employees in Vietnam. We are legally responsible, on behalf of the clients, for paying their employee’s salaries every month, including dealing with employee taxes, benefits, insurances, visa applications, and sponsorship applications, and a great many other transactions and operations concerning human resources.

As part of our BPO (Business Process Outsourcing) group service, VNBG has become an important solution provider for remote employee retention in Vietnam since 2018. VNBG is proud to represent companies from Japan, Australia, the United Kingdom, the United States, Singapore, and Canada in managing remote teams in Vietnam.

How Employer of Record (EOR) service works

The process is simple and straightforward:

1. EOR service contract engagement
2. Initial fee or deposit settlement to kick-start the service.
3. Starts onboarding the employee into VNBG’s payroll.
4. Legal documents arrangement customized according to the offers (probation contract, labor contract, etc)
5. Enrolls the employee(s) into the state insurance system, in full compliance with local legal and PIT tax requirements
6. Monthly salary, employer tax/duties calculation by the cut-off date
7. VNBG invoices the client monthly for the services, including the employee’s salary, benefits, and expenses.
8. The Client pays VNBG to settle the mentioned employment costs.
9. VNBG pays the Client’s employees on the pay-day and the Government for state insurance and personal income tax.

VNBG is taking pride in being an experienced and competent Employer of Record provider in Vietnam. Our experienced HR and Payroll team can also provide consultation on various HR matters. We also share tips for managing remote employees in Vietnam to numerous clients so far including:

• HR and C&B practices and policies for the Vietnam market.
• Labour contract, probation contract arrangement.
• Payroll, tax, and compulsory insurance management with calculation and processing.
• Labour law consultancy and advice.
• Work visa, work permit, and TRC (Temporary resident card) for foreigners under our sponsorship.

Contact us to get a free consultation on managing remote teams in Vietnam today.