If you're looking to expand your business with international talent, the Philippines is a top destination to consider. From its large population to its strong economy, the country is among the best options for hiring in Southeast Asia. Many Filipinos hold college degrees, and with a high concentration of young professionals, there are plenty of people eager to enter the workforce; in fact, as of 2020, nearly half (47.3%) of the population aged 20-24 had reached or completed college.
The Philippines also has a lower cost of living than many other countries, so businesses located elsewhere are often able to offer competitive pay without facing budget constraints. A majority of the population is also fluent in English, the second official language of the country, and the nation boasts a high literacy rate—as of 2020, 97.0% were literate among the population five years and older.
But while these benefits are compelling, many companies face complex challenges when it comes to onboarding international hires. To address the intricacies of sourcing and hiring talent abroad, some organizations turn to a professional employer organization (PEO). Here, we break down what PEO services entail, along with alternatives for your business to consider.
Wondering how Oyster fits into your big picture? Book a customized demo to see what your day-to-day could look like with our global employment platform.
What Is a Professional Employer Organization (PEO)?
A Professional Employer Organization (PEO) becomes your co-employer, sharing legal responsibility for your Filipino employees while you retain control over their day-to-day work. This partnership lets you access local HR expertise without setting up your own entity in the Philippines.
A PEO partner can take on a number of responsibilities to help manage your employees in the Philippines, including complete HR services. For example, they could handle:
Because a Filipino PEO will be well versed in the nuances of the Philippines labor market, they can help your business make competitive offers tailored to the needs and expectations of local hires. They may also oversee screening and interview processes, employee contracts, and leave administration. In other words, a PEO can take on the role of an outsourced HR team, acting under your company's guidance.
Pros and Cons of PEO Services
So, is a PEO right for your business? The answer depends on your expansion plans and resources.
Here's what makes PEO selection challenging:
PEO vs EOR vs HR Outsourcing: Key Differences
When you're looking to hire in the Philippines, you'll encounter different employment models. Here's how they compare:
Model
Your Entity Required?
Employment Responsibility
Best For
PEO
Yes
Co-employment (shared)
Single-country expansion with local entity
EOR
No
Full legal employer
Quick expansion without entity setup
HR Outsourcing
Yes
You retain all liability
Specific task management only
What Services Does a Philippines PEO Include?
While services can vary between providers, a PEO in the Philippines typically bundles several core HR functions. Your agreement will specify the exact scope, but you can generally expect a PEO to manage:
PEO Costs and Pricing in the Philippines
So, what will a PEO actually cost you? Most providers use one of two pricing approaches:
Pro tip: Always request an all-inclusive fee breakdown to avoid hidden charges for onboarding, terminations, or compliance support.
Things to Know About Hiring in the Philippines
What makes hiring in the Philippines unique? Here are the key compliance requirements you'll need to navigate:
These are just some of the considerations for hiring in the Philippines. To learn more, check out our comprehensive guide to hiring employees in the Philippines. You can also use Oyster's cost calculator to get a full breakdown of the cost of hiring in the Philippines.
How to Choose the Right PEO Provider in the Philippines
Selecting the right partner is crucial for a smooth experience. As you evaluate PEOs, consider asking about the following:
A PEO Alternative: Hire in the Philippines With Oyster
If you're looking beyond PEO services to meet your company's international hiring needs, you might also consider working with an EOR in the Philippines to act as the legal employer of your Filipino staff. One major advantage of EORs is that you don't need an entity in the Philippines, which you would if co-employing staff with a PEO. However, if you're hiring in multiple countries, you would still need multiple local EORs.
If you're looking to onboard talent across several locations, a better option is to work with a global employment platform like Oyster. Our automated platform allows you to hire, pay, reward, and manage employees in more than 180 countries (including the Philippines), without having to establish legal entities. Whether you're seeking to hire Filipino contractors, part-time workers, or full-time employees, our platform can support all of your hiring needs by streamlining contracts, onboarding, payroll, benefits, and more. With Oyster's deep local knowledge and insights, you'll be able to navigate local labor laws and hiring practices compliantly and confidently.
Learn more about how Oyster makes it easy to scale your team with international talent.
About Oyster
Oyster is a global employment platform designed to enable visionary HR leaders to find, engage, pay, manage, develop, and take care of a thriving distributed workforce. We let growing companies give valued international team members the experience they deserve, without the usual headaches and expense of hiring abroad.
Oyster enables hiring anywhere in the world—with reliable, compliant payroll and great local benefits and perks.
