The perks of software development outsourcing jobs

Quynh Tu Hoang, University of Amsterdam

Introduction

In recent years Vietnam has emerged as a dynamic destination for software development outsourcing in Asia due to the increasing number of young Vietnamese software engineers and lower labour costs compared to other IT outsourcing countries, i.e. India, China and the Philippines (Gallaugher and Stoller 3; Phan 7; Shillabeer 159-160). According to a research report from AT Kearney, Vietnam ranks eighth among the software outsourcing destinations. It is estimated that as of 2016 over 1,000 companies are operating in the software sector and employing around 70,000 people. (qtd. in Austrade, n. pag). The nation’s outsourcing industry reached US$500 million in 2014 (VINASA qtd. in Sturgeon and Zylberberg, 146).

It has been known that workers in outsourcing companies have to work overtime to meet their client’s deadlines and suffer from the time zone differences with their clients (Upadhya 10). However, there is little research about the working conditions, expectations and motivations of these workers, who are making a significant contribution to the country’s economic growth. It is therefore important to perform a qualitative research about the software outsourcing industry from the labour sociology perspective. This research is primarily based on the work of Andrew Ross on New Economy’s workplace and no-collar work mentality of new media labour. Supporting theory frameworks are Enda Brophy’s study of post-Fordist relationship to labour, and family culture in the workplaces by Modern Ram and Ruth Holliday. Nevertheless, the nature of the ecomony investigated in Ross’s study is different from the developing countries’ economies. Therefore, this research constitutes of an analysis on the outsourcing companies’ online content and interviewing current employees in a digital art outsourcing company. Combining with insights of Vietnamese culture and education, the research examines, refines, and extends the nature of outsourcing jobs to answer the question: What do outsourcing workers in new media industry see as the attributes of a ‘good job’?

Theoretical framework 

The main features of what is seemingly a ‘good job’ were identified by Andrew Ross through his ethnographic research concentrating on new media companies in New York’s Silicon Valley as following: personal freedom, high autonomy, flexibility, and opportunities for self-actualisation (7-17). The digital and online companies with these features are acknowledged as New Economy’s workplaces in comparison with the brick-and-mortar firms as Old Economy (9).

While there appeared to be a hidden cost of overwork and lack of job security, the employees feel attach to the “irresistible work environment, one that they feared they may never enjoy again in their personal lives” (15). In the New Economy’s workplaces, a no-collar work mentality which rejects authoritarian and labels has emerged. The creativity and individuality of this nonconformist attitude serves to capture the ideal of work which the New Economy’s companies try to sell to both customers and their workers (32-50). Online and digital companies offer employees the opportunities to contribute to something bigger than themselves, and therefore deliver human self-recognition which has changed the labour culture in new media industry (Turner 89-91). The technology scene’s idealism status is earned through creating something that can change the world (Marwick 82); hence computer programmers and software engineers are motivated to pursue “meaningful” projects even if they have to work seventy-hour-plus hours a week and sacrifice their personal lives (Ross 19).

Flexible management is one of the main features of the post-Fordist workplaces, especially in new media industry. Workers in the high-tech industry reported a high level of independence, with little monitoring of their progress (Brophy 621, 629). However, the flexible system of production gives rise to precarity which implies a range of different and less stable relations to labour: short-term contracts, part-time jobs, self-employment, no clear separation between work and free time, lack of union protection, no steady work rhythms, etc. (621).

However, these studies have been concerned primarily with the experience of workers in the West, especially in the United States, and there has been relatively few academic works on the Vietnamese outsourcing software industry from the point of view of labour. This research will document and conceptualise the workplace conditions, aspirations, and most importantly the attitude of young employees towards their jobs. The research will therefore fill in the gap of academic knowledge about the New Economy’s workplace culture and politics in developing countries.

Methodology 

In order to understand the nature of the software development outsourcing workplace, this research will draw on an analysis of online content posted by the two most well-known IT outsourcing companies in Vietnam: Glass Egg Digital and TMA Solutions. Glass Egg Digital is one of the leading offshore software development companies specialising in multimedia projects located in Ho Chi Minh City, and has over 300 employees. Their production team includes producers, graphic artists and programmers. In contrast, TMA Solutions with 2,000 engineers in staff provides a wide range of IT outsourcing services. Both companies are active on Facebook as it is the most popular social media in Vietnam with 46 million Facebook users and therefore an effective medium to attract new talents (We Are Social 179). Thus, I will analyse content on the companies’ Facebook pages and the employees’ comments on these content.[2] These resources will provide information about the companies’ activities, working conditions, and employees’ attitudes towards their workplaces and their jobs.

This paper will also draw initial findings on my observation while working as a project manager in Vietnamese outsourcing companies, and informal interviews with two employees in Glass Egg Digital. The interviews will give a more detailed understanding of how workers view and feel about their outsourcing jobs, workplaces, and career paths. It is important to note that this research is a starting point of a larger ethnographic research in which given time and resources researchers immerse themselves in the outsourcing workplaces, observe and document the employees’ behaviour, and interview them while they are on the job.

Vietnam’s software development outsourcing industry 

Since ‘đổi mới’, Vietnam’s economic and political reforms launched in 1986, a country that was once embargoed by the US has adopted market-friendly policies to attract foreign investment in its economy. It has grown from one of the poorest countries in the world to a lower-middle income nation (The World Bank, n. pag). The key turning point was when Vietnam joined WTO in 2007, which has increased the country’s participation in the global economy. Furthermore, Vietnamese government has invested heavily in ICT infrastructures to boost the export of IT services, which are considered to be the key sectors contributing to the country’s economic development (Sturgeon and Zylberberg 158). With the government’s pledge to invest approximately US$415 million in the ICT sector by 2020, the industry is expected to continue growing (BMI qtd. in Austrade, n. pag)[1].

Vietnam’s outsourcing companies have attracted customers who previously outsourced to China, India, and Eastern Europe due to their cost advantage. More specifically, Vietnamese labour is far less expensive than China’s or India’s (Ho Chi Minh City Computer Association qtd. in Sturgeon and Zylberberg, 147). However, it is estimated that the human resources demand in software development sectors will far outweigh supply over the next 3 years. Therefore local businesses are losing their young employees whom they spent time and effort to train to international companies who have higher offers (Shillabeer 160).

A ‘flexible’ assembly line

Activities involved in the software production process can be divided into conception and execution tasks. Most of the work in outsourcing companies requires execution skills including coding, testing and maintenance and only a few projects require preliminary analysis and designing solutions.

After analyzing the client’s brief, a project manager or senior software engineer will divide the work into small pieces and assign many workers to work simultaneously. For example, in Glass Egg Digital, “Each artist is responsible for a component of an art product.” (Nhan, Vu. Interview, 21 December 2017). Nhan is managing a long-term project that has been assigned to 50 digital artists. Precisely this ‘assembly line’ that makes the outsourcing companies time and cost competitive. As with a traditional assembly line, workers have limited opportunities to think outside the box. Their tasks are strictly described and monitored, which leaves them almost no space for exploring creative solutions.

According to the interviewees, just a few senior artists at Glass Egg are highly individualistic and able to turn preliminary concepts into concrete models. These senior artists are often put to work to compete with other companies when bidding for projects. After acquiring the projects, work will be assigned to the artists in the ‘assembly line’.  Therefore, the digital artisans and the industrialisation of bohemia that Ross found in the new media industry are not entirely applicable to the outsourcing industry. Creativity and individuality, which are the main attributes of the nonconformist mentality, are not celebrated on a large scale in the outsourcing workplaces, because they need to put the client’s requirements above all. The competitiveness of outsourcing companies, in fact, mostly relies on their abilities to deliver the products exactly as described in client’s brief.

However, as remarked by interviewees in Brophy’s study, software development work is still significantly different from a manufacturing assembly line because of the “globalized workflow of the software industry” (629). Interestingly, although working in two different continents with different business cultures, both interviewees in Brophy’s research and this study emphasised the culture of tinkering, autonomy, self-teaching, and self-motivation. The project-based production that was found in Silicon Valley informational and design firms (Turner 91) is remarkably pronounced in software outsourcing firms. Artists in Glass Egg Digital are encouraged to manage their own schedule as long as they can deliver their work on time. This flexibility in time management is a crucial difference from manufacturing assembly line production and the Old Economy firms, and it is also a compelling feature that both interviewees find irresistible.

Nevertheless, this flexible management is only possible because of the use of various tracking and reporting tools. The role of project managers, who are also called producers or accounts in some companies, are important in outsourcing firms as they are the ones that communicate with clients to understand the requirements. They connect all resources, make project plans, and drive the projects to completion. In order to meet client’s deadline and requirement, project managers have to monitor technical and art colleagues’ workflows and progress through tracking and efficiency tools. In some companies, employees have to report their daily activities and progress on timesheets because the outsourcing companies bill clients on the basis of man-days. Ultimately, the outsourcing companies keep tight control over employees’ working progress to maintain their profit margins even though they present themselves as flexible and open workplaces.

On the other hand, the flexible culture allows companies to demand ‘flexibility’ from their employees. As Nhan described, “Our plan depends on clients’ plan. Sometimes they change their priorities and we also have to change our plan. For urgent requirements, we have to work over time to meet their new request.” In outsourcing companies, both employees and managers “have to prepare to work overtime any time at request” (Ha, Uong. Interview, 17 December 2017).

However, the testimonies of employees of Glass Egg Digital and TMA Solutions generally suggest that they find their jobs rewarding and enjoyable. The following section will address the perks of working in Vietnamese software outsourcing companies, and from there I will propose a definition of a ‘good job’ in the new media outsourcing industry.  

The perks of outsourcing jobs

1. Training and abroad working experience

The technology disciplines, especially software development, appear to be among the most attractive career choices to Vietnamese students (Le n. pag). Vietnamese young workers are generally characterised by being resourceful, willing to take risks, but lacking initiative and English communication skills (Shillabeer 159). While making an effort to invest in training human resources for the technology sectors, Vietnam’s universities are still “obsolete”, even in comparison with other Southeast Asian countries (Mai and Yang 171). Education in general focuses extensively on theory and memorising, which results in graduates, even those from prestigious technical universities, not qualified enough to meet the standards of the modern international business environment (Sturgeon and Zylberberg 134). Therefore, opportunities to be trained by working on complex international projects are highly valued. Precisely the training opportunity is considered to be one of the main attributes of a good job for which newly graduates or inexperienced new media workers are willing to work for a low salary and long hours.

For example, Glass Egg Digital’s training programmes for art students every 6 months attract a large number of talented artists and programmers even though only a few of them are offered a full-time position at the company at the end of the programme. However, according to a survey conducted by Adecco (n. pag), after accumulating experience and improving their technical skills, programmers and digital artists can earn from US$500 to US$2,000, which are comparatively high because the average monthly salary of Vietnamese university graduates in 2017 is about US$340 (Ministry of Labour, War Invalids and Social Affairs qtd. in Hoang, n. pag). Programmers and artists with fewer than 5 years of experience often choose the workplaces where they would benefit from managers’ mentorship and training programmes. This is also reflected in TMA Solutions employees’ testimonies of why they joined the company in the first place.

English training is also one of the key ‘selling-point’ of new media companies in Vietnam. Compared to Indian and Eastern Europe outsourcing firms, the Vietnamese workforce is at the disadvantage in terms of English communication skills because the language barrier is proven to affect the success of outsourcing projects (Shillabeer 159). Workers with excellent English communication skills can communicate directly with clients and thus increase their efficiency, negotiating power with their employers, and promotion opportunities.

While software-outsourcing workers generally do not get involved in the conception phase of a project, it does not mean that their job is not challenging at all. In fact, most TMA Solutions employees refer to the competition with Indian companies as a challenge that they find thrilling to pursue. The senior software engineers cited their experience of working on-site at client’s main offices in the West when bidding for projects as the most valuable experience they have had in their working life. Abroad business trips do not only provide the workers an opportunity to observe the Western working style and improve their skills. It is also perceived as a perk that only privileged employees can obtain since travelling to the West is a lengthy and very expensive procedure.

Training and abroad working experience are considered to be important factors when choosing companies to work for because they increase the software engineers’ bargaining power in the job market. Similar to workers in Silicon Valley (Ross 17), many software engineers and artists in outsourcing companies actively engage in building their own ‘personal brands’. The culture of individualism is motivated by an economic manner of thinking which is central to neoliberalism:

The worker has become human capital… They become individuals for whom every action, from taking courses on a new computer software application to having their teeth whitened, can be considered an investment in human capital (Read 5, 7).

A good job in the software outsourcing industry, therefore, must provide the means for workers to further their careers or to pursue a higher salary: technical and English training, and challenging work. Similar to the permatemps in Brophy’s study, junior workers in the outsourcing high-tech industry are the most vulnerable to labour precarity. For instance, junior artists in Glass Egg Digital are offered to work as contractors for 6 months without dependable benefits before signing a 12-month contract. Therefore, junior workers have to sacrifice most of their waking hours to work as a trade-off for future financial gains and job security. Conversely, due to the shortage of high-quality software engineers and artists, senior employees in the new media industry can work the system to their own advantage by using the ‘exit weapon’ at the slightest dissatisfaction or for a higher offer. The relatively high rate of employee turnover is perceived to be a problem for the outsourcing companies. Thus, they have engaged in various strategies and management efforts to foster employees’ loyalty. i.e. cultivating family culture.

2. Family culture and kinship

The existence of family culture in the firms which employ no family members has been acknowledged by scholars. Family culture in this case is a management ideology that is nurtured at work, without a predominance of blood ties, to encourage trust and supports between employees and managers and thus ease the problems of delegation (Ram and Holliday 642). Therefore the family culture can be seen as a ‘rational’ system of management. Testimonies of Glass Egg Digital employees on the company Facebook pages frequently refer to the friendly and ‘informal’ environment in which colleagues support each other and have fun together at work. According to Ha, the company’s culture and morale coordinator, the family culture took roots through overcoming hardships together as a small company and continues to be maintained by various strategies, for example numerous parties, heavily-invested team building activities, and company outings, etc. Most importantly, the open working space without cubicles encourage workers to interact and assist each other. Managers themselves exhibit an approachable, helpful and personal management style.

The family culture is, in fact, not new to Vietnamese company culture as many Vietnamese companies are run by family members. Vietnam is also one of the countries that were significantly influenced by Confucianism, “an ethical system, a political ideology, and a scholarly tradition developed from the teachings of the ancient Chinese philosopher Confucius”, which have persisted to the present day (Walker and Truong 2015). At the heart of Confucian discourse lies the notion that one’s identity is defined by their relationships with others: family, friends, and the organisations they are a member of. Therefore, one’s responsibility is to build a harmonious family, organisation, or society, and contribute to the common goals of the above-mentioned communities. As observed, while the new media companies operating in Vietnam have adopted the flexible and open management style, Confucius’ ideas still run deep in the business culture and employees’ expectations. Sometimes employees find themselves torn apart between the desire to obtain their financial goals and the fulfillment they can only get in a company they feel they belong to. Therefore, some workers choose to maintain a full-time job at the company they consider to be their ‘second big family’ and work on side projects in their free time.

It is important to note that new media outsourcing companies have cultivated family culture and kinship with innovative strategies. As Ross perceived in Silicon Valley companies, “Employees’ social life draw heavily on their immediate colleagues. There are no longer boundaries between work and leisure. No one who held a New Economy job was immune to this biohazard” (19). The software outsourcing companies in which the majority of employees are at young ages actively erode the work-life boundaries. For instance, TMA Solutions has hosted an internal dating ‘game-show’ to help their employees find their significant other within the company. It is not clear how much influence these strategies have on employees’ attitude and loyalty over their company, but the employees’ comments indicate that they find these ‘bonding’ activities very unique and intriguing. Such unconventional human resource management can be considered to be an influencing attribute of New Economy ‘good jobs’.

Conclusion 

Unlike no-collar workers in Internet companies in Silicon Valley, employees in software outsourcing companies do not pursue a stimulating and irresistible work that can change the world but instead pursue financial security and a sense of belonging. However, the research also found that the software outsourcing workplaces in Vietnam are remarkably influenced by the company culture in Silicon Valley while are still maintaining their own Asian values. Outsourcing companies thrive to offer a modern, flexible, open, and relatively unorthodox workplace culture, which has become common in the high-tech industry. Employees in outsourcing firms, therefore, face the same dilemmas of the flexible management system as those in Silicon Valley. It can be concluded that while the nature of the work in outsourcing firms and new media startups are relatively different, the hidden costs in the global informational economy, i.e. precarity and the loss of work-life balance, are the same. An important finding of this research is that the new media workforce in developing countries like Vietnam is also influenced by neoliberalism as they start to see themselves as a ‘human capital’, consciously increase their values, and use them as bargaining chips with their employers.

A further research can extend the scale of the interviews to software engineers to have a more comprehensive understanding of the outsourcing workforce. Given time and resources researchers can carry out a proper ethnography to make observations in some software outsourcing companies in Vietnam that will allow them to critically look at the nature of these companies and the outsourcing work from an outsider’s perspective. Another potential object of further in-depth research is family culture in Vietnamese new media companies as there are not many scholarships on this system of management.

Notes

[1] Since Vietnamese government does not collect systematic data on the IT services, nor does it publish all collected data on the Internet, the statistics presented in this paper may not entirely correct. During the research, I encountered different figures for number of firms, revenue, and employment. I chose to use statistics from the most reliable resources, such as published books and government reports. Nevertheless, the figures available from disparate sources still suggest the significant development of the software development outsourcing industry in Vietnam.

[2] Glass Egg Digital’s Facebook page: https://www.facebook.com/glassegg.gameoutsourcing/

TMA Solutions’ Facebook page: https://www.facebook.com/tmasolutions/

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