An ideal transitional stage between using a BPO and fully independent incorporation is to use our Payroll, HR and Recruitment Services.
This is part of the EOS / Technology Elite incubation services, which is a modular approach to meeting your offshoring needs.
There are several reasons why it can be attractive to continue to outsource Payroll, HR employment law, and recruitment - either indefinitely or while heading towards independent incorporation.
Recruitment in The Philippines is not simply a case of advertise and hire. The following article will give you a better idea of why onshore recruitment methods typically fail in Philippines:
In the Philippines you can’t consistently hire good people based on interviews, resumes and references like in Australia or similar countries.
There are three Reasons:
i) The resumes are… optimistic to say the least. There is no cultural expectation that resumes should be factually correct, aside from basic dates and qualifications. So everyone looks like a genius on paper.
ii) Referees will rarely say anything bad and neither will previous employers. This is part of the culture – people won’t deliberately cause loss of face to someone else. So it’s often difficult to know if information on past performance is accurate.
iii) Interviews – this tends to work the opposite way. Filipino candidates are often painfully shy and nervous, and bad at the skill of interviews. They usually come across as terrible at communication. It takes a practised eye to spot which candidates will immediately overcome this once they secure the new job.
So the end result is that if you use ‘normal’ recruitment methods, you shortlist terrible candidates with no skills, and rule out people who might be great but interview badly.
Fortunately, we have many years of experience in creating recruitment systems that address these challenges. To get the best results, we recommend the following process:
The standard price for this service is AUD $2500 per role. 50% up front upon engagement, with balance payable with 2 days of signing of employee contract.
However, your price may get as low as half, dependent upon on your volume, the quantity of different roles vs same roles, and the length of replacement guarantees.
1. Each kind of role is carefully analysed to prove its viability and availability of candidates in the Philippines market. Often the outcome of the analysis will be to change some elements of the role to better fit the market. Let us help you adjust your hiring strategy to give the best chance of success given local realities.
2. Stages of exam filtering to be created in consultation with you. Advertising some roles will have the opposite effect to the concern listed in point 1 above – there may be hundreds or thousands of applicants. A rapid initial filter is created to save us time in the main skills testing stage.
A secondary exam filter will provide a more objective (and comparative) assessment of skills, which reduces reliance on resumes and interviews.
Importantly, these exam filters must be created with a strong understanding of the end result you desire. Seemingly similar-sounding roles can really be quite different when the output expectations are analysed. Step 1 provides us with that understanding.
If you already have exams, we can present your existing exams. If not, we will use our existing exams, but work with you to modify them to be most effective for the specific role and outputs concluded from step 1.
3. Initial interview. We conduct the initial interview to validate the key aspects of their prior experience, according to the role requirements. We encourage you to give us 1-3 key questions that we can ask the candidates.
4. English Testing. Another part of the first interview is used to score their English capabilities across a range of skills. One or more of these will be important to your required roles.
- English written skill
- English conversational spoken skill
- Word hunting under pressure (skill with live translation between Tagalog and English)
- Current ability with understanding the Australian Accent
5. Candidate endorsement. From this point, we summarise the results of all promising candidates and present the data to you. You will decide whether to proceed with interview.
6. Your interview. We provide you with recommendations for how to interview Filipinos in case you have not had prior experience with this. There are specific techniques required to get more complete and useful answers from the candidates.
Similar to an onshore recruitment service, you have 60 days to assess the viability of the employee. If they are not suitable, you may terminate and they will be replaced (via a new campaign or existing applicants) at no further cost.
Employee Payroll & Administration Solution
These different elements of running a team in Philippines are bundled together in a single solution because it’s not really practical to separate them. Generally we also bundle contracts management and HMO management (described below).
It’s impractical to run a payroll solution without interfacing and remitting tax and information to the various government departments. There are also significant risks around the drafting and maintenance of contracts and its relationship to dismissals. Generally our clients will not have expertise in these areas, so there is a high risk that they will fail to interface correctly with government requirements, unless we provide this as a bundle.
For a single fee of AUD$290 per person per month (lower for volumes over 10), we perform all of the tasks listed in this section: Payroll / Submission, Employee Contract Management, and HMO Management
Payroll Service, Employee / Government Submissions & Benefits
There is also some work involved each month in assisting employees with their government benefits. This can involve providing information to the employees as well as liaising with government departments. Our tasks include:
- Setting up of bank accounts for employees (required)
- Remittance to individual bank accounts
- Taxation / Holiday pay / Overtime / Tardiness calculations & adjustments
Government Mandated Contributions
(Calculation and submission of the following to government departments)
- Employee withholding tax
Employee Taxation Calculation / Tax Returns
- Annualisation of tax
- 13th Month pay calculation / remittance
- Annual tax return for employees
Monthly attendance reports
- Pulled from payroll software
- Can be cross checked against biometric door data
Employee Contract Management
Like many countries, there are specific legal requirements in Philippines with how employee contracts are drafted and maintained. The Philippines is quite regimented in its approach and it is trivially easy for a disgruntled employee to bring a case before the Department of Labor.
If contracts are not prepared carefully and maintained, it can impact everything from employee motivation, through to an inability to efficiently dismiss an employee without attracting a legal case.
The HR tasks that go with the Employee Contract Management Service are:
- Attendance monitoring
- Performance / Disciplinary action as per Labour Code
- External attorney / legal advice as required
- Filipino listening ear to find underlying issues which may arise
- Documentation of staff status changes / salary adjustments / bonuses
- Induction and on-boarding to improve early traction / set expectations
- Resolve issues between management and employees
- Hand-off from recruitment to HR upon successful hire.
- Organizing of company events - for example end of month, or team building activity
- Recognition of culturally-important milestones – eg Regularization, work anniversaries, birthdays
- Organizing of external training providers
- Updating job description in contracts (also linked to disciplinary action requirements)
- Monthly surveys / data collection as required
- Performance Appraisal scheduling, assistance and mediator.
- Maintain management guidelines by preparing, updating, and recommending human resource policies and procedures compliant to PH labour laws.
HMO Medical Insurance Management
Public healthcare in Philippines is very minimal. Providing basic medical insurance to employees is a legal requirement (via the government program Phil health). Increasingly, and particularly in white-collar roles, a more comprehensive HMO policy is needed to attract the best talent. In many cases the nature and coverage of the policy will sway an employee to accept one role over another. Offering a higher salary in recruitment does NOT necessarily trump a better HMO policy.
The cost of the policy is NOT included in our above fee. It ranges between AUD$20 and $38 per month, per employee/dependent. Contact us for clarification.
Health Care Management (HMO) Additional Points:
- We receive a bulk discounted rate for policies.
- We include the service to coordinate with PhilHealth - there are multiple components with management of all claims.
- We include seeking of approvals of doctors / hospitals to minimise employee out of pocket expenses. (This can be complex.)
- We include discussions with employees regarding new dependants / changes to individual policies, and coordinate with you to implement your decisions.
Contact us for further discussion on this service