Too Much Time Onboarding?
Outsourcing and setting up offshore processes in the Philippines have been in practice for a long time. And why not? The country ranks 22 for high proficiency in English globally as per the EE P1 ratings 2022. So hiring in the Philippines means your onshore teams will have a smooth communication experience.
Moreover, the Philippines has a large labor market and cultural similarities with the Western world, making the place a viable option for expansion.
All these factors make the Philippines a preferred hiring destination among companies.
However, hiring in a foreign country is complex. You should be aware of the local talent pool’s skills and work culture. Above all, the employment rules and regulations of the country are not easy to understand.
Here, an efficient Employee of Records (EOR) can make things easy. It manages the most complex parts of local legal requirements so that you can hire and expand your business.
In this article, you will learn about all the processes and requirements for hiring employees in the Philippines.
How to Hire Remote Workers in the Philippines?
While hiring in the Philippines might sound difficult, it is not impossible. You can still work with Filipino talents by setting up an entity through EOR or hiring contractors. In this section, we will discuss each in detail.
1. Setting up an Entity
If you want to set foot in the country and grow your business there, setting up a new entity and hiring local talent is a great idea. It gives you complete autonomy to hire locally. But, this model will only work in your favor if you have the budget and management bandwidth.
Hiring a large number of employees in a country demands multiple resources too. You should have fixed assets in the country and a multi-currency payment solution to pay your offshore employees. So, you should only consider setting up an entity in the Philippines if you plan to expand in the country long term.
2. Partner with Employee of Records (EOR) in the Philippines to Hire Filipino Employees
You can hire and work with Filipino employees even without establishing an entity in the country. An EOR is a legal entity that helps you hire, pay, and manage employees in the Philippines and other countries. It takes care of the legalities of hiring and helps mitigate risks. An EOR comes helps you adhere to local rules and compliance guidelines and lets you to focus on managing your employees’ day-to-day work.
Partnering with an EOR is an excellent solution because it helps,
- Experiment with offshore hiring strategies
- Set up the workforce
- Commence offshore operations without spending too much time and money mitigating financial risk and compliance issues.
3. Hire Contractors
You can also hire contractors in the Philippines for specialized projects or niche skills. Since a contractor works as a self-employed individual, there are fewer legal obligations and compliance . All the aspects are bound by a contract that lasts for a specific tenure.
Read More: Cost of an employee vs. cost of a contractor
What You Need To Know Before Hiring in the Philippines?
It is easy and cheaper hiring remote workers in the Philippines.
The Labor Code of the Philippines is the Department of Labor and Employment’s guidelines document for employment practice and labor relations in the Philippines. Here are some of the key takeaways:.
- Normal hours of work: 8 hours
- Weekly rest day: 24 hours after every six consecutive workdays
- Rule on direct hiring: With some exceptions, you cannot hire an employee in the Philippines for overseas employment apart unless the hiring boards and entities have been authorized by the Secretary of Labor.
1. Hiring Outlook in the Philippines
The Philippines is one of the biggest economic hubs in Southeast Asia. It has a large skilled population, so there's no dearth of talent in the job market. The median age of college degree holding employees is 23 years,.
The Philippines has a low cost of living. Hence, it has a low wage bar compared to many Western countries. The average daily minimum wage ranges from PHP 290 to PHP 537 (US $5.23 to $9.69).
A recent statement from the Secretary of the Bureau of Local Employment in the Philippines mentions that "the result of the Labor Force Survey for January 2023 implies that the continuous improvement of the country's health situation and the full opening of the economy contributes to the sustained growth potential of our labor market."
These factors set a positive outlook to hire workers from Philippines.
2. Talent Versatility in the Philippines
While there is no talent shortage in the Philippines, according to a LinkedIn report Filipinos have top talent pools in the following categories:
The Philippines has a pool of emerging robotics engineers who build and deploy software using RPA technology. They are adept in coding and also have hands on experience with the latest RPA tools like Automation Anywhere, Blue Prism, Kofax, Pega, among others.
If you're in the Information and Technology Services, Financial Servies, Accounting, Computer Software, or Outsourcing/ Offshoring business, you can benefit from hiring staff in the Philippines.
The Philippines has a rich source of experienced cybersecurity specialists. Some of their top skills include securing computer systems against phishing. They are also skilled in averting cyber attacks, denial-of-service attacks, malware, viruses, and hacks. They can devise security programs to keep your organization safe against data thefts.
Cybersecurity experts are skilled at information security and penetration testing. They also know network security, vulnerability assessment, security information and event management.
If you're in the information technology and services, accounting, computer and network security, or banking industry, consider hiring remote workers in the Philippines.
The Philippines is known for its rich talent pool of customer success specialists. They are proactive by nature and have a mix of soft and hard skills, which help them excel in customer success roles. They understand technology and can equally manage customer expectations. Some of the skillsets include knowledge about sales forces and account management. They are also familiar with customer experience, relationship management, and retention.
If you're in the marketing and advertisement, outsourcing/offshoring, or computer software industry, hiring a customer success specialist from the Philippines can help you scale your business.
Philippines Remote Hiring Trends
The Philippines has always been a preferred country for outsourcing work. So Filipinos are already familiar with remote work culture.
A study shows that more than 52% of workers worked remotely before the pandemic. So, remote working is not new for employees in the Philippines. These factors make the Phillipines a great outsourcing location .
Knowing the culture of your Filipino colleague will help you collaborate better. Most Filipino employees are acquainted with Western culture. But they are also proud of their own beliefs, deep cultural roots, unique values, and practices. Knowing about their culture and honoring them will help you build a strong relationship and save you from some awkward Zoom moments.
Unlike their Western counterparts, Filipinos are not straightforward. You can also interpret them to be polite. So instead of saying a direct ‘no' they might prefer to say, "We'll see," or “I'll try my best”. Filipinos find directness rude.
Filipinos don't prefer confrontation. Instead, they will diplomatically express their thoughts.
Hierarchy is a big thing in the Philippines. Subordinates usually refer to their superiors as Sir, Miss, or Maam.
Filipinos love celebrating their holidays; Christmas is the biggest one. Lent, or Holy Week, is also a popular festive period in the Philippines.
Family, collectiveness, and staying together are a part of the Filipino culture. They often bring these values to work. They can build better bonds with their colleagues and stay loyal to their organization.
The Cost of Hiring Remote Workers in the Philippines
When paying a Filipino employee, you must account for the following costs and employee contributions:
1) 13th month salary
2) Home Development Mutual Fund (HDMF)
3) Health Insurance (PHIC)
4) Social security (SSS)
For example, you want to pay 55259 PHP or USD 1169 to an employee on a monthly basis. Here’s a breakdown of the overall costs.
In addition to the employee’s monthly salary, employer costs accrue to 14% of the employee’s gross salary.
The Process of Hiring Remote Workers in the Philippines
Publish a job ad
A detailed job description is a must before you publish a job ad. Write a detailed job description so the applicant understands the role. Publish the job advertisement in the Philippines using portals like LinkedIn, Jobstreet, Kalibrr, and Indeed. Clearly mention if you’re hiring remote workers in the Philippines.
Once you receive the applications, shortlist them based on your selection criteria. Once you have shortlisted the candidates, schedule an interview. You can schedule online interviews if you're hiring remotely.
Send job offer
Send offer letters to the candidates who clear the interview. Once they accept the offer letter, send them the joining letter with joining details, onboarding kit, etc.
Onboarding the employee
Once the employee joins, set up a well-structured onboarding process. This will help them get familiarised with your workforce and process. Introduce them to your organization's work style and mission. Brief them on how they can contribute to its overall success.
Key points to remember
While discussing the job role and the requirement, use the local language and currency. Speaking in their local language can make the employee feel comfortable. However, it's not mandatory as most are fluent in English.
Employees in the Philippines often use net salary instead of gross salary. So be clear in your communications to avoid any misunderstanding.
Read More: Work Permits and Visas in the Philippines
Hire Filipino Employees Compliantly With Gloroots
Hiring in the Philippines is complex as you need to take care of the local governance and compliance and familiarize yourself with the HR process, local administration, and taxes.
While it may seem overwhelming, partnering with an Employer of Record like Gloroots can be the best solution. It lets you hire Filipino talents in the Philippines without bothering much about the formalities.
Gloroots has local and global compliance expertise to ensure you comply with local employment laws. Whether you're an enterprise or a startup, companies of any size can partner with Gloroots for hiring in the Philippines.
The platform helps you to generate invoices, manage mandatory benefits, and pay taxes on time.
So, what's stopping you from building a global team? Schedule a call with Gloroots to explore collaboration opportunities.