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Career Guide How to Hire Filipino Employees for Foreign Employers

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How to Hire Filipino Employees for Foreign Employers

Ready to hire in the Philippines? Our guide walks you through the entire process, from understanding legalities to making the perfect job offer. Start hiring smart!

Cindy Angelia

Updated Aug 7, 2024

The Philippines is an attractive option for businesses due to its growing economy, blend of Eastern and Western cultures, and skilled workforce.

Filipino workers are known for their excellent communication skills, strong work ethic, and adaptability. They are proficient in English and can easily fit into diverse international teams.

However, hiring in the Philippines involves careful background checks and compliance with local laws to ensure a smooth hiring process.

Who Can Hire in the Philippines?

Both local and foreign companies with a registered business in the Philippines can hire employees directly.

To set up a business, you must register with the Philippine Securities and Exchange Commission (SEC) for corporations or the Department of Trade and Industry (DTI) for sole proprietorships. Additionally, registering with the Bureau of Internal Revenue (BIR) is required for tax purposes.

Once registered, you can start hiring as long as you follow Philippine employment laws.

Should You Use a Recruitment Agency?

Some companies opt to work with recruitment agencies in the Philippines to take advantage of their expertise in sourcing and screening candidates. You might consider this if:

Internal HR Resources Are Limited: Agencies can handle recruitment and screening.
Urgency in Filling Positions: Agencies often expedite the hiring process.
Specialized Talent Required: Agencies have networks and expertise in finding specialized skills.
High Turnover Rates: Agencies can help manage recruitment more effectively.
Compliance with Local Laws: Agencies are familiar with Philippine employment laws and can ensure compliance.

Alternative Hiring Options

If you do not plan to establish a business in the Philippines, you can still hire Filipino employees by:

Using an Employer of Record (EOR)

An EOR handles the legal aspects of employment without needing you to set up a local entity. They manage recruitment, hiring, and onboarding, while you retain control over day-to-day management.

EORs ensure legal compliance, handle payroll, manage taxes, and assist with work permits. However, integrating employees into your company culture will still be your responsibility.

While the EOR handles legal and administrative tasks, you remain responsible for integrating employees into your company culture and managing their day-to-day work.

Hiring Independent Contractors

Independent contractors are self-employed and work for your company based on a contract. They are not considered employees and are responsible for their own taxes and benefits.

This option provides flexibility and can be more cost-effective as it avoids overhead costs like benefits and taxes. Ensure that contractors are correctly classified to avoid legal issues.

Steps to Hire Employees in the Philippines

1. Comply with Legal Requirements

To hire employees in the Philippines, first, make sure your business is registered with the appropriate agencies.

This includes registering with the Securities and Exchange Commission (SEC) or the Department of Trade and Industry (DTI), and getting your tax registration from the Bureau of Internal Revenue (BIR). You must follow the local laws on minimum wage and employee benefits.

This means paying employees the legal minimum and providing benefits like health insurance and social security. Handling payroll taxes correctly is also crucial, so make sure all deductions and tax payments are made on time.

2. Identify Your Needs

Start by figuring out what skills and roles your company needs. Think about where you need extra help and what specific tasks the new employees will be responsible for.

Make sure these roles align with your company’s long-term goals and consider how new hires will fit into your future plans. It’s also important to think about the type of people who will work well with your current team and contribute positively to your company’s culture.

3. Craft Detailed Job Descriptions

Write clear job descriptions that outline what each position involves. Include details on the responsibilities of the role, the skills and experience required, and any qualifications needed.

This will help potential candidates understand what’s expected and determine if they are a good fit for the job. A well-written job description also attracts the right candidates by setting clear expectations from the start.

4. Attract Job Seekers

Use various methods to attract candidates. Post job openings on social media platforms like LinkedIn and Facebook, where you can also showcase your company culture. Or, you can use Talent Search in Epicareer for Employers.

Make sure your job ads are easy to read and highlight what makes your company a great place to work, including benefits and career growth opportunities.

Engage in industry events and online forums to meet potential candidates and enhance your company’s visibility. Offering competitive salaries and benefits can also help attract top talent.

5. Screen and Evaluate Candidates

After receiving applications, review the candidates’ resumes and cover letters carefully. Look for relevant experience and skills that match the job description.

Conduct interviews and, if necessary, skills tests to better understand each candidate’s abilities and suitability for the role. This step helps you narrow down your choices to those who best fit the position and your company’s needs.

6. Conduct Comprehensive Background Checks

Once you’ve selected candidates, perform thorough background checks to verify their credentials. This includes checking their criminal record, previous employment history, and educational qualifications.

Contact references from previous employers to get feedback on their work performance and reliability. You might also check their credit history and social media presence to spot any potential issues. This helps ensure that the candidates you hire are trustworthy and qualified.

7. Make the Job Offer

Prepare a formal job offer letter that includes details about the position, salary, benefits, work schedule, and other employment terms.

Be ready to negotiate terms if needed, such as salary or benefits, to reach an agreement that works for both sides. If you’re making a conditional offer, make it clear that the offer depends on the successful completion of background checks.

Once everything is agreed upon, provide the candidate with a clear offer letter and start the onboarding process.

FAQ

How to pay Filipino workers for foregin employers?

To pay Filipino workers as a foreign employer, you can use an Employer of Record (EOR) service. The EOR handles payroll, tax deductions, and compliance with local regulations, ensuring that workers are paid correctly and on time.

Alternatively, if you’re directly employing workers without an EOR, you’ll need to set up a local bank account in the Philippines and ensure compliance with the country’s payroll tax and benefits requirements.

This includes handling mandatory contributions to social security and health insurance. For seamless payment processing, consider using international payment platforms like Wise, PayPal, etc. that can handle currency conversions and transactions.

Why do foreigners hire Filipino workers?

Foreigners hire Filipino workers for several key reasons. The Philippines has a growing, dynamic economy and a skilled, English-speaking workforce known for its strong work ethic and adaptability.

Filipino employees are often praised for their excellent communication skills, cultural versatility, and high level of professionalism, making them valuable in diverse international teams.

Additionally, the cost of labor in the Philippines is generally lower compared to other countries, providing an attractive balance of quality and affordability for businesses looking to optimize their workforce.

How much does it cost to hire employees in the Philippines?

The cost to hire employees in the Philippines varies based on factors like job role, industry, and company size. On average, companies can expect to pay between PHP 20,000 to PHP 60,000 per month for entry to mid-level positions.

For senior roles or specialized skills, salaries can exceed PHP 100,000 per month. In addition to salaries, employers must budget for mandatory benefits such as Social Security System (SSS) contributions, PhilHealth insurance, and Pag-IBIG Fund contributions. These benefits add approximately 15-20% to the total cost of employment.

Cindy Angelia

Talent Acquisition Manager

With a strong background in HR and talent management, I am passionate about creating positive candidate experiences and fostering a culture of growth and development. My strategic approach to recruitment ensures we attract and retain the best professionals in the industry.

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