The benefits of choosing to hire Filipino workers remotely

In an interconnected world, businesses are increasingly turning to remote work to tap into a global pool of talent. The country has become a popular destination for remote hiring because of the professionals’ affordability and strong English proficiency. Keeping this in mind, it is not easy to hire employees in the Philippines for challenges such as payroll, compliance with local labor laws, not submitting the W-8 BEN form, and so on. This is where Global Squirrels steps in to help you and your business hire top talent who meet all your business requirements.

If you are planning to hire Filipino staff, you have come to the right place. In this blog, we will get into numerous advantages of doing so, from cultural compatibility and cost-effectiveness to work ethic and technical expertise.

Hire Filipino staff: the benefits of working with them

Readiness to work in the U.S. timezone

Filipino professionals are often willing and able to work during US timezone hours. This flexibility is critical if your business works across multiple time zones, enabling real-time collaboration and communication. Being able to adjust your schedule to work with international clients is something that many Filipinos are accustomed to adjusting, which makes them perfect for jobs that require you to be available during US business hours.

English proficiency

The Philippines is the 2nd highest in Asia and 20th in the world for English proficiency according to the English Proficiency Index (EPI). Around 80% (57.4 million) of adults can understand written and spoken language, and 69% (49.5 million) of Filipinos can write the language. This fluency is due to historical influences, such as American colonization, which made English, the colonizing language, the medium of instruction in schools and universities. English is also used in media and daily life, which not only reinforces communication skills but also adds to the overall soundness of your English. Filipino workers are great communicators, and they can work well with the rest of the remote teams.

Affordable hiring costs

It is more cost-effective to hire Filipino professionals than it is to counterparts in Western countries. The lower cost of living in the Philippines allows you to source your labor at a much lower cost without sacrificing quality. This affordability makes the Philippines an enticing option for offshore outsourcing of different roles, including customer service and digital marketing. This cost advantage can be used by the company to get a highly skilled workforce to deliver high-quality work.

Also Read: Employee Benefits and Compensations in Philippines – All You Need to Know

How to hire employees in the Philippines?

Hiring employees in the Philippines can be approached in two primary ways: You can either establish a legal entity or partner with an Employer of Record (EOR). There are advantages and challenges with each method, and a company’s resources, objectives and long term plans will drive the choice.

Setting up a legal entity

A traditional way to hire directly is for a company to establish a legal entity in the Philippines. This process involves several steps:

• Registration: Companies must register with the Philippine Securities and Exchange Commission (SEC) and for sole proprietorships with the Department of Trade and Industry (DTI). On top of that, you have to register with the Bureau of Internal Revenue (BIR) for tax purposes.
• Cost and time: It can be expensive and time consuming to set up a legal entity. Initial capital investment is needed, and you need to know local labor laws, as it will be expensive to comply with regulations.
• Control and stability: This approach gives complete control over hiring, employee management, and payroll. If you are planning to keep your business entity in the Philippines for a long time, this option may be suitable for you.
• Challenges: Companies must deal with complex employment laws, and if mismanaged, they can be fined. This option should be considered only by those who are willing to face the inherent risk and complication.

Partnering with an Employer of Record (EOR)

An EOR offers a more streamlined approach to hiring employees in the Philippines without needing to establish a local entity:

• Simplified compliance: As the legal employer, an EOR takes care of the payroll and taxes and compliance with local labor laws on behalf of the company. Businesses can now concentrate more on operations and assure legal compliance.
• Quick setup: This is the perfect method for companies that need to hire quickly or want to test the market viability without incurring major up front investment.
• Operational control: The EOR is responsible for compliance with employment laws, while the hiring company retains the power to direct the day to day management of the employee.

Cost considerations: Although using an EOR incurs fees, it is typically less expensive than managing the whole entity and is particularly beneficial for smaller and less certain firms regarding long-term commitments in the region.

Challenges you may face when you hire Filipino workers

When you do not partner with an EOR:

Obtaining the W-8BEN form

This document is vital because it confirms they are not a US resident for tax purposes. However, if completed incorrectly, this form can cause legal risks. If your hired worker does not submit the W-8BEN form, you will both be exposed to unnecessary withholding taxes and the risk of non-compliance with IRS requirements. Additionally, without this documentation, you may lose out on the benefit of valuable tax treaty reductions of applicable tax rates.

Huge markups charged by BPO/staffing agencies

When you hire talent in the Philippines via BPO/staffing agencies, they will charge 40-50% more than your budget by adding extra fees and huge markups. This can affect the way you hire staff in the Philippines, especially if you have a set budget.

Unable to manage your employee’s payroll

It is not easy for many businesses to handle employee payroll. You have to navigate through the complexities of employment laws, ensure that the professionals are paid on time, stay updated with tax laws, and more! This can affect a number of situations if not managed properly, such as job dissatisfaction for the employee and potential legal risks.

Lack the resources to attract top talent

One reason why your business might be struggling to attract top talent could be that many talented professionals in the Philippines are more likely to work with entities that offer access to government-mandated benefits. Health insurance through Philhealth, housing benefits, through the Home Development Mutual Fund (HDMF), and social security through the Social Security System (SSS) are included in these. There are such benefits that some stability and security associated with traditional employment make them more attractive than freelance or contractual jobs. When you don’t provide a comparable setup, you are risking losing out on highly qualified candidates looking for these advantages when selecting where to work.

How does Global Squirrels help you hire staff in the Philippines effectively?

Global Squirrels, as one of the best Employer of Record solutions providers, is a staffing and payrolling platform that allows you to hire and manage employees efficiently and effectively. Our platform ensures you hire employees in the Philippines who meet all your business requirements. What is an Employer of Record? It is a solution our platform offers you where Global Squirrels will act as your legal entity in the countries you want to hire but have not set up.

Global Squirrels resolves all your challenges without any hassle.

• Global Squirrels ensures that you will not face any legal risks by mitigating non-compliance and adhering to local and international labor & tax laws. One such factor is the W-8 BEN form when you hire Filipino staff. Our platform lets you rest assured that you will hire workers in the Philippines who meet all your requirements without any hassle.
• Unlike other staffing agencies, our platform allows you to save up to 20% on hiring costs with the help of our transparent pricing. This works in a unique way, where you just have to pay the employee’s salary and a flat fee.
• Our platform is one of the best Employer of Record solution providers, as our platform ensures that your employees are always paid on-time and accurately. Global Squirrels also ensures that the platform is updated with all the latest laws.
• Our EOR solutions ensures that you do not lack the luxury of being able to offer benefits to attract top talent efficiently. Our transparent pricing and the benefits package ensure you have no lack of talent.

Also read: Employer of Record in the Philippines

Here are other features of our Purple and Orange Plans:

If you have already found or have a professional or freelancer that you would like to onboard, the Purple plan may be useful to you. After that, our software will take care of all HR-related tasks, such as doing background checks, onboarding, adhering to local and international labor & tax regulations, and generating the offer letter.

The Orange plan assists you in finding and hiring top talent who fits your budget and all of your employment requirements. Furthermore, our platform will make sure that all HR-related tasks, including payroll, benefits administration, legal compliance, and onboarding, are handled.

Are you ready to hire staff in the Philippines efficiently and effectively? Get a Demo today!