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Writer's pictureMitchell Ndlovu

Hiring Remote Workers In The Philippines

Updated: Jun 27


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So, you're a small to medium-sized business owner ready to bring on a few new team members. You're not exactly swimming in money, so each hire must be affordable and exceptional – a tricky combination if you're looking within the US. Great companies hire great talent, and the competition drives prices up, making it challenging if you're not in that league just yet.


The good news? You have options. Exceptional talent is available outside the US at a fraction of the Cost. In regions like the Philippines, South America, Africa, India, and more, you can save up to 82% on salaries for most entry to mid-level positions compared to US rates. 


In this article, we'll focus on the Philippines, exploring the opportunities, benefits, potential risks, and strategies to mitigate them. If you are familiar with Brian Tracey's work, you will know the term "Eat the frog", i.e. Doing the most important thing first. So, in that spirit, let's review some of the Risks of hiring remote teams. 


What are the risks associated with hiring remote workers in the Philippines?


Person calculating taxes using a calculator and documents, representing the consideration of tax implications when hiring remote workers from the Philippines
Tax implications

Tax implications when hiring remote workers in the Philippines

First and foremost, it's always wise to consult your accountant or attorney. Rest assured, based on our experience, the primary tax consideration is that the wages you pay to your foreign contractors are deductible. Have your contractor complete a W-8BEN form to confirm their status as a foreign independent contractor, and keep this form on file.


There's no need for a 1099 form since they're not based in the US, and you won't need to withhold taxes because they don't pay US taxes. Additionally, there are no government requirements, unemployment insurance, or mandatory benefits to worry about, as they cannot be classified as an "employee" in your country.


We've found no tax or reporting obligations between the US and the Philippines, Canada, the UK, Australia, or other countries we've worked with.



Abstract sphere with interconnected lines and nodes, symbolizing robust internet infrastructure essential for remote work in the Philippines

Infrastructure Reliability in the Philippines

Overall, the internet infrastructure in the Philippines is solid, with median internet speeds around 92 Mbps. Today, about 69 million Filipinos have internet access, a significant increase from roughly 48 million in 2018. While power outages can sometimes disrupt work in certain areas, this issue is easily managed with a small backup power battery that an employee can purchase, giving you peace of mind. 


Search Cost of finding the right talent in the Philippines.

Maybe it's just me, but hiring the right person can feel like it takes forever. You start by posting the job on various platforms, then you're reviewing resumes, booking calls, screening applications, dealing with no-shows, and reposting the job when you don't find the right fit. And just when you think you've succeeded, the new hire quits and you have to start all over again. This process is tough enough when recruiting domestically, but adding in the foreign angle with time differences and cultural nuances makes it even more challenging. Time is expensive!


At Zimlance, we handle the entire process for you. Once we receive your requirements, we work our magic to provide you with candidates who meet your criteria and have been thoroughly vetted and interviewed. Your total time investment should be around three hours: a 30-minute discovery call, two hours interviewing shortlisted candidates, and thirty minutes just in case. This streamlined process ensures you can find the right candidate quickly and efficiently, relieving you of the stress of a lengthy hiring process.

 


Three employees in the Philippines collaborating around a desk, engaged in discussion and working together, highlighting a productive remote team environment

Culture and Language

Culture can be tricky, so let's dive into a quick history lesson. Spain ceded the Philippines to the US in 1898, making it an American colony for 48 years before gaining independence in 1946. During this period, American influence significantly shaped the culture and language. Today, English remains the second official language of the Philippines, with about 90% of the population understanding and speaking it. This historical connection places the Philippines in a prime position to understand American culture and business practices.


One cultural aspect worth noting is the 13th check. In the Philippines, employees expect a 13th check as a bonus at the end of the year. While you're not legally required to pay this, it's encouraged as it's a Generally Accepted Bonus Practice (GABP) - not to be confused with GAAP! 


What are the benefits of hiring remote workers in the Philippines?


The large, experienced talent pool

One of the most significant advantages of hiring from the Philippines is the vast and experienced talent pool. The country has a high literacy rate and a strong emphasis on education, producing a steady stream of graduates proficient in various fields such as IT, customer service, healthcare, and more. Additionally, many Filipinos have experience working for international companies, giving them a global perspective and familiarity with different business practices. This makes finding candidates who can hit the ground running and add immediate value to your team easier.



Piggy bank placed on top of a calculator, symbolizing cost savings achieved by hiring remote workers from the Philippines

Cost Savings

One of the most compelling benefits of hiring from the Philippines is the substantial cost savings. Labor costs in the country are significantly lower than in the US, allowing you to hire skilled professionals at a fraction of the Cost. This doesn't mean you're compromising on quality; you're simply capitalizing on the economic differences. For instance, a highly qualified customer service representative in the Philippines might cost you $900 per month instead of $3500 in the US, offering a significant cost advantage without sacrificing quality. 

Moreover, the lower Cost of living in the Philippines means that your employees can enjoy a comfortable lifestyle, translating into higher job satisfaction and loyalty.



A Summary of Hiring Remote Workers in the Philippines


Hiring remote workers in the Philippines can be a game-changer for small to medium-sized businesses looking to scale efficiently and cost-effectively. The country offers a large and experienced talent pool, significant cost savings, and a workforce well-versed in English and familiar with Western business practices. 


While there are some risks and challenges to consider, such as tax implications, infrastructure reliability, and search cost, these can be effectively managed with the right strategies and support. By leveraging the advantages of hiring from the Philippines, you can find exceptional talent at a fraction of the Cost and foster a diverse and dynamic team that can drive your business forward.


At Zimlance, we specialize in streamlining this process, ensuring you find suitable candidates quickly and efficiently so you can focus on what matters most: growing your business. Ready to explore the benefits of hiring from the Philippines? With careful planning and the right partner, you can build a strong, skilled, cost-effective remote team that propels your business to new heights. Take the first step today and start reaping the benefits of this strategic move.




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