All You Need to Know About Human Resources Services Outsourcing in Ho Chi Minh city

In this article, we'll discuss multifarious aspects of Human Resources Outsourcing Services in Ho Chi Minh city. Check it out now!

Human Resources are an inseparable part of any business, but having an in-house HR department may add to the management’s extra expenditures, time, and concern. To channelize the management’s focus on revenue-generating tasks and bringing efficiency in operations, corporations are pivoting towards outsourcing HR activities to regional HR outsourcing partners in Ho Chi Minh City. In this article, we’ll discuss the multifarious aspects of outsourcing HR processes in Ho Chi Minh City, Vietnam’s economic hub.

Read about: Cekindo Human Resources services in Vietnam

What are the Services Entailed in HR Outsourcing

Outsourcing HR services in Ho Chi Minh City entails a comprehensive range of services involving initial payroll processing to various administrative tasks. The following is the list of Human Resource services that can be outsourced:

Payroll Processing & Reporting 

Payroll management in Vietnam often proves to be a cumbersome task since it takes a significant amount of time and requires an understanding of local legislation and labor laws. Because payroll calculation affects your tax and social security reports, it is imperative to be cognizant of all relevant rules. Payroll processing and reporting are recurring services, i.e, this service is offered on an ongoing basis and paid for in regular monthly, quarterly, or annual payments. 

The outsourcing partner takes care of all internal matters related to payroll processing and reporting and is answerable for the outputs.

Recruitment

Recruitment under HR services includes talent acquisition, selection, contracts consulting, and procedure. It is a recurring service and agencies charge monthly, quarterly, or annually. 

Scope of each service includes, assessment of client needs, searching and shortlisting, conducting pre-interviews, approval to join the labor union, labor agreement, arranging for the interview, and a comprehensive onboarding procedure.

HR System Registration & Trade Union Establishment 

The HR system registration and trade union establishment is a one-time service, i.e, one only has to pay for it during the time of registration and establishment. 

Trade Unions, like labor unions, are very necessary for maintaining a harmonious work culture in Ho Chi Minh City. A trade union acts as a mediator between an employee and an employer to safeguard the rights of the workers in the country. 

Outsourcing the HR system registration involves the following

Initial labor registration

Initial labor registration or Labor Report Registration is carried out to register employees with the company of their employer. 

The outsourcing partner also carries out an official declaration for contributing 2% Social Salary Funding to Vietnam Trade Union. Moreover, they help create Company Regulations & get approval from the authorities (e.g. standard company policies, HR policies, etc.)

Then comes the salary scale registration where the salary level for each position/title is decided, like a structure of salary based on different positions within the company.

Initial social insurance registration:

Social Insurance registration involves participating and adjusting the declaration sheet on Social, Health, and Unemployment Insurance for each employee.

Moreover, the outsourcing partner is also liable for the delivery of documents of the list of employee information and the company’s labor force.

Related: Reduce Errors & Overhead Costs with Payroll & HR Outsourcing

Why Outsource Human Resources Services to Professionals in Ho Chi Minh City

Outsourcing the HR services in Ho Chi Minh City can prove to be beneficial for you in the following ways:

Cutting overhead costs

Outsourcing HR services saves you the cost of setting up a dedicated segment for HR in the organization. Moreover, impeccable compliance can only be achieved through a highly qualified and well-trained employee that stays on top of the market updates. Finding an employee like that needs dedication, effort, time, and capital towards the process as they aren’t easy to find. Outsourcing partners are niche operators and have a team of qualified employees trained to meet your HR requirements.

Maintaining compliance with the authorities

HR and Payroll compliance with Vietnam’s laws can prove to be tricky, especially in the light of constantly improving regulations, and changing laws. As stated before, the outsourcing partners keep a team of highly qualified, well-trained, niche employees that stay on top of the market updates and hence, ensure immaculate compliance.

Avoiding penalties and mistakes

Ensuring error-free compliance is one of the biggest challenges for in-house HR units and that often results in penalties. Outsourcing partners are liable for the insurance of error-free compliance and answerable in case something goes wrong on their part.

Staff with Better Experience

With a bigger team, with more experienced individuals, outsourcing helps businesses deal with complicated cases easily. On such a huge team with varied experience, there’s bound to be at least someone who would know a way out.

Convenience in terms of checking reports

With an outsourcing partner, it’s easier to check on reports in terms of filing, updating & compliance.

The Monthly Services included while Outsourcing 

While outsourcing your HR needs in HCMC, there is a band of recurring services, i.e, they occur monthly, quarterly, or annually and are charged likewise. In this section, we’ll see how many services that recur monthly.

  • Payroll Processing and Reporting 
  • Social Insurance Reporting
  • PIT (personal income tax) reporting & tracking
  • Consultation about employment or labor relationships

What are the Annual Services that are included while Outsourcing in HCMC

The following are the annual services offered by the outsourcing partners in Ho Chi Minh City: 

  • Labor Declaration Report: This report is for the labor department on how many employees are currently employed, in addition to a foreigner labor declaration.
  • PIT Finalization & settlement: Ensures return of taxes if overpaying.
  • Social Insurance Finalization: Produces a report on workers based on the length of time they have been covered by social insurance.
  • Company Regulation Registration: Internal labor rules, that must be reported to the authorities

2022 Updates for Better HR Compliance

Social Insurance for Foreign Employee

In the latest update on the HR and payroll compliance in Ho Chi Minh City, Vietnam, the rate of social insurance for foreigners will be increased from 8% to 29.5%. However, in this scenario, the company covers 20% of the insurance value, and the employee covers the rest 9.5%.

Minimum Wage in Vietnam

Let’s have a look at Vietnam’s Minimum Wage for 2021 & 2022:

City (Vietnam)Minimum Wage
1.Ho Chi Minh City4,420,000 VND
2.Hanoi4,420,000 VND
3.Danang4,420,000 VND

*7% is added on top for Skilled Workers with University Degrees & expert certificates

How Can Cekindo Help?

Cekindo is a one-stop market entry avenue for professional payroll and HR outsourcing services in Ho Chi Minh City, apart from our incorporation services. Our experienced consultants ensure that your payroll data is handled in line with the accounting standards in Vietnam. It also offers tax guidance and post-payroll audit services, in addition to the services mentioned in this article, which save you time and allow you to focus on your core company operations.

Contact Our Consultant

Tomas Svoboda - Cekindo - Vietnam Country Manager

Verified by:​

Ing. Tomas Svoboda

Tomas is an expansion manager responsible for Vietnam. His role is to define the key potential of the Vietnamese market and to ensure that Cekindo branch in Vietnam provides its clients with smooth and hassle-free market entry solutions.