Operating a recruitment agency in the Philippines requires a lot of planning with stellar execution.

You
need to identify your business’ niche, understand the local laws and regulations as well as invest in the
right technology. Your marketing and hiring strategy has got to be near perfect if you want to keep
staying ahead of your competition. Let’s take a look in detail what you need to do.

1. Identify Your Niche

The first thing you want to do is not to jump into the business blindly. You need to do your market
research first. Identify which industry you want to offer your solutions to - is it technology, oil and gas, or
education? Then you got to assess your competition and who could be your potential clients. Develop
and offer them your unique selling proposition, and test, and optimize it as you scale up.

2. Calculate the Costs

It is not cheap to start a recruitment agency. You need to pay to register your business and obtain the
necessary licenses. In addition to all that, renting an office can be a major cost in cities such as Manila.
To ensure that your business operates without a hitch, you need to choose the right Applicant Tracking
System (ATS) and Customer Relationship Management (CRM).

Below are the possible costs that you can consider:

Technology Solutions
You can save costs on your tech stack by using a solution that combines a recruitment ATS and a sales CRM in one
price such as Manatal, which starts at $15 per user. Sourcing candidates shouldn't be hard
Source & hire candidates faster with Manatal's ATS.

The cost of business registration and obtaining licenses depends on the type of business and other
factors. Here are the possible costs you might encounter [1]:

1) Bureau of Internal Revenue (BIR):

i) Annual Registration Fee: Php 500
ii) Documentary Stamp: Php 75
iii) Books of Account: Php 200
iv) Cost of Printing Official Receipts: Php 3,500
v) Total Cost at BIR: Php 4,275

2) Security and Exchange Commission (SEC):

i) Business Name Reservation for 90 days: Php 120
ii) SEC Express Lane: Php 600
iii) SEC Registration Fee: Php 2,530
iv) Stock Transfer Book: Php 500
v) BIR Documentary Stamps: Php 1,500
vi) Notarial Fees: Php 1,500
vii) Total SEC Expenses: Php 6,750

3) Department of Trade and Industry (DTI):

i) Barangay level/coverage: Php 200
ii) Municipal/city coverage: Php 500
iii) Regional coverage: Php 1,000
iv) National coverage: Php 2,000
v) Documentary tax for DTI documents: Php 30
Obviously, there are other costs that you need to think about like Barangay clearance, permits and
administration overheads. The numbers can vary depending on your location.

Personnel Costs
You obviously need some personnel to operate your business like recruiters, office admin, HR
executives, and more. Since you are most likely going to hire junior recruiters, the estimated total pay is
Php 66,000 per month.

These are just example figures and the actual costs can vary greatly depending on various factors. It’s
always a good idea to do thorough research and possibly consult with a financial advisor before starting
your business.

3. Your Business Model

Now that you have seen the possible costs, you need a business model that can determine your revenue
stream. The model that you are going to choose will also influence your relationship with your clients
and candidates. So be careful when choosing one because there is no one-size-fits-all approach. There is
the contingency model (risk and reward), hourly model (steady income), flat model (certainty income),
and retainer model (upfront income). Each model caters to different needs and scenarios.

Let’s delve deeper into each of these models and explore how they can shape your recruitment agency’s
path to success:

1.Contingency
In this business model, your clients will pay you when they hire a candidate you provide. Since your
income depends highly on the successful placement of a candidate, you can understand why it can be
risky. But, if you have a high placement rate, the Contingency model can be advantageous.

2. Hourly: If your recruitment process requires a significant amount of time and resources, then this
model might be beneficial for you as it provides a more steady income. However, it may not be as
lucrative as the contingency model if you can place candidates quickly.

3. Flat: On the contrary, in the flat fee model, you charge a flat fee for your services regardless of the
time it takes to fill the position or the salary of the candidate placed. This model provides certainty in
terms of income and can be attractive to clients as they know upfront how much the service will cost.

4. Retainer: In the retainer model, you receive a retainer fee upfront from the client before the
recruitment process begins. The retainer is usually a percentage of the estimated recruitment cost. This
model provides income upfront and allows you to cover some of the initial costs of the recruitment
process. However, it may be less attractive to clients as they have to pay a portion of the cost upfront.

4. Set Up Your Agency Website

The Internet is one of the places where your potential clients can find and interact with you. It has to be
professional-looking, easy to navigate, and accurately reflect your company’s brand identity. This
includes clear messaging about your services and contact information. As time goes by, you can include
testimonials from clients to build trust with visitors.
5. Create Content for Lead Generation
Then you need to create and share relevant, valuable content that addresses the needs and challenges
of your target audience. For instance, you can publish blog posts on topics such as AI in recruitment and
showcase your employer’s branding. With enough useful content, you can position your business as an
expert in the field, attract traffic to your website, and generate leads.

6. Use Social Media for Branding

An effective tool to increase your employer brand visibility and engage with your potential clients is
social media. You can use LinkedIn, Facebook, X (previously known as Twitter), Instagram, and TikTok to
regularly post updates about your agency, share your blog posts, and participate in relevant discussions
to build a strong online presence. Plus, you need to keep your branding consistent across all platforms to
reinforce your brand identity.

7. Choose Management Tools

Up until now, we know that when you are starting a recruitment agency, you do more than just
sourcing, attracting, and tracking candidates. You also need to manage your client relationships. So you
need to use management tools to help streamline your recruitment process and improve efficiency like
Trello (keep track of ongoing projects), MS Teams (collaboration tool within your team), and GSuite
(create and share documents with all stakeholders.)

8. Build a Team
When building your team for your recruitment agency, you need to hire the right people because they
are the backbone of your business. This is not only your team of recruiters, but also other staff who will
handle the administrative tasks, marketing, and legal. So, when you are recruiting your team, look for
individuals who share your agency’s values and are committed to providing excellent service to clients
and candidates alike.

9. Find Clients
Finding clients is often one of the most challenging aspects of running a recruitment agency. However,
there are several strategies you can use to attract potential clients. These include networking at industry
events, reaching out to businesses in your niche, and leveraging your website and social media platforms
to showcase your services. Remember, building strong relationships with clients is key to your agency’s
success.

Conclusion
In conclusion, the Philippines' optimistic economic environment makes starting a recruitment agency an
appealing venture. Despite client acquisition challenges, networking and online strategies are
recommended to foster lasting client relationships. Success in the recruitment agency business hinges
on a comprehensive approach, integrating strategic planning, financial prudence, effective marketing,
and meaningful client and candidate engagement.
 POEA Registration
Registration with POEA for Manpower Recruitment Agencies
Pursuing a manpower recruitment business in the Philippines is feasible through registration of a
corporation with the required Philippine equity or through partnership with an existing licensed
recruitment office, or a single proprietorship with a license. This license is obtained when
registering the manpower recruitment company with the Philippine Overseas Employment
Administration (POEA). The POEA guidelines provide that only those who possess all the
following qualifications may be permitted to register a company and engage in the business of
recruitment manpower and placement of Overseas Filipino Workers (OFW). InCorp Philippines
will assist local and foreign companies with the requirements and registration process to register
a manpower recruitment company or agency with the POEA, SEC, and BIR. We will draft all
contracts and consolidate all required documentation. InCorp Philippines works directly with its
clients and POEA to ensure an efficient registration process.

Capital Requirements and Ownership

A manpower/recruitment agency must be 75% Filipino-owned and have a P5,000,0000
minimum paid-up capital. You will be required to maintain a balance in a local bank of
P500,000 and have a P1,000,000.00 escrow agreement with POEA (Philippine Overseas
Employment Administration), as well as a P100,000 bond.

POEA Overview
The Philippine Overseas Employment Administration (POEA) is the government agency in the
Philippines which is responsible for optimizing the benefits of the country’s overseas
employment program. The POEA is attached to the Department of Labor and Employment
(DOLE) and was created to promote and to monitor the overseas employment of Filipino
workers. POEA is also the lead government agency tasked to monitor and supervise all foreign-
owned and local manpower recruitment agencies in the Philippines. The POEA is also an ISO-
certified organization. This certification is proof of its international standards.

Most Common Employment for OFWs

 IT
 Maritime & Seafaring
 Construction
 Welding
 Nursing
 Medical
 Domestic Help
 Engineering
 Hotel & Restaurant
 Service Industry
POEA Primary Functions Industry Regulation
 Issues license to engage in overseas recruitment and manning to private recruitment
agencies and ship manning companies
 Hears and arbitrates complaints and cases filed against recruitment and manning
agencies, foreign principals and employers, and overseas workers for reported violation
of POEA rules and regulations, except for money claims
 Implements a system of incentives and penalty for private sector participants
 Sets minimum labor standards
 Monitors overseas job advertisements on print, broadcast, and television
 Supervises the government’s program on anti-illegal recruitment
 Imposes disciplinary actions on erring employers, workers, and seafarers

Employment Facilitation
 Accredits & registers foreign principals and employers hiring Filipino workers (OFWs)
 Approves manpower requests of foreign principals and employers
 Evaluates and processes employment contracts
 Assists departing workers at the ports of exit
 Develops and monitors markets and conducts market research
 Conducts marketing missions
 Enters into memorandum of understanding on the hiring of Filipino workers with labor-
receiving foreign countries
 Facilitates the deployment of workers hired through government-to-government
arrangement
 Provides a system of worker’s registry
Tips to Make Opening a Recruitment Agency
o Research and Plan, and Then Research Some More
What sets great leaders apart from regular leaders is their readiness to expend effort on activities that precede
the actual business building. Planning and research go a long way when you are deciding to make a new move
to a new country. You use this step to understand the compatibility of your business in a new market analyze
your combined strengths and predict the opportunities that might come your way in the new market while you
also prepare to face the challenges. This is also where you pick your niche, whether it’s software development,
cyber security, or data science based on your research so far. Once you make your pick, you are also able to
understand how to meet the needs of your stakeholders. As Al Ries says in 22 immutable laws of branding,”
Good things happen when you contract your brand rather than expand it.”, Try to be as specific as you can in
the industry you pick.
o Know Your Competitors
Congratulations! Opening a recruitment agency in the Philippines is a great idea. And because this idea is so
great, it’s highly likely that there are others who have thought of it. Now the good news is that they have
already made the effort of doing it first and if you study these other recruitment agencies you can know what
works and what, well, is a broken cog in the machinery of setting up a recruitment agency in the Philippines.
Top Filipino recruitment agencies like Staffhouse, Manila Recruitment, and ManpowerGroup Philippines are
some of the top recruitment agencies you can study to plan a more efficient arrival in the oriental world.
o Create Goals for Your Business
This is a paramount step because this is where you distill the learnings from the past two steps and convert
them into a quantifiable game plan for your business. This is where you decide the direction and goals for
your recruitment agency and plan the steps and resources you will need to achieve them.
o Set Your Business in the Philippines Legally
One nifty tip when treading foreign waters is knowing the laws and regulations of the new land. Now even if
the Filipinos are culturally compatible with you, you must never forget that they have different modes of
operations and the best way to take advantage of these differences is by knowing them and identifying the
regulatory landscape. This also shows respect for their culture when you have to convene with the authorities.
Here are a few introductions to get you started. As an agency. You will have to register with the Department of
Labor and Employment as a Private Employment Agency (PEA) or Private Recruitment and Placement
Agency (PRPA) and foreign companies trying to recruit Filipinos for work overseas must obtain a license from
the Philippine Overseas Employment Administration (POEA). The government has also recently passed laws
concerning privacy and storage of information that you must be aware of when you are recording your
employees’ information here. Moreover, you can avoid unnecessary fines and unpleasant experiences when
you clearly see the lines you shouldn’t cross.
o Build a Strong Network
Now that you have moved here legally, it’s time to move socially here as well. Get in touch with tech
professionals, industry associations, educational institutions, and other stakeholders in your industry. Attend
events and hackathons, workshops, and conferences. It’s time to spread your wings and let the new world
know that you have arrived.
o Collaborate
Collaboration is the new ‘it’ word within the most successful tech companies today. This is your time to
explore how you can bring and get value in the industry landscape and start having these conversations with
the relevant parties. Go the whole hog on your efforts to know the decision-makers in the industry and
understand what they are looking for and then try to provide them with that. Know the gaps between your team
and the desired team and organize the requisite training and development.
o Run the Extra Lap
It cannot be stressed how paramount the processes at your organization are in determining the success of your
venture. Take the extra effort to develop solid screening and recruitment processes at your agency that
guarantee efficiency. Put an effective evaluation process consisting of required technical and coding
assessments in place. Don’t forget a thorough background check either. Here are a few tips that work for us at
Workfall to establish a robust evaluation process.
 o Become the Experts in Your Industry
A recruitment agency doesn’t have to work in only one tangent. You can choose the space that works for you,
and brainstorm with your team on how you can test your wings in the new industry. Offer not just basic
recruitment services but expand your services like talent consulting, skills assessment, and career coaching.
Also, conduct workshops and panel discussions, host charities, give grants, and become a resounding name in
the industry. Use your knowledge and new cultural experience to arrive at new approaches for your current
industry and aim to become a knowledge source of the industry. When you can become an advisor in the
industry, you can have access to trends and news and valuable resources and opportunities, thereby,
ascertaining your success.
o Build Your Brand
Now that you have a firm process at your very core, it’s time to pull out all the stops to build a resonating
brand in tech minds. Go online and offline with your marketing efforts. Consider the benefits of digital
advertising, content marketing, and offline participation in fests, conferences, and seminars. It pays to
experiment in marketing as a business organization in today’s business climate. At the same time follow some
thumb rules: record and share testimonials, write case studies, and release the news of new partnerships and
projects at the organization for perpetual engagement with the audience.
o Perform Long Term
The Philippines is now the new home for your recruitment agency and now you must ensure that you are
thinking and acting long-term when you operate here. One of the cornerstones of this is delivering consistently.
Be aware and adaptive to changing trends and continue to innovate. It always pays to maintain strong
relationships with clients because, in time, they come to become your brand’s biggest ambassadors. Regular
communication, feedback sessions, and post-placement support can help you identify mistakes (if any,
however little) in time and incorporate the changes in your current processes making you a dynamic contender
in the industry.
TL: DR,
When you are starting a recruitment agency in the Philippines, make the prudent choice of spending time
researching and understanding the business landscape and using this information to choose your area of
expertise, whether it is data security, software development, or data science. And then learn further about your
competitors and the standard operating procedures. Learn the laws of the new land and ensure you abide by
them to avoid unnecessary hassle in the present and the future. Now once you have laid the foundation, it’s
time to form wide networks externally and resilient processes internally. The key now is to participate actively
in events conferences and activities that enrich the community. All the while, also working towards building
streamlined processes that are tested for efficiency. Run the extra lap if you have to to make your agency
synonymous with efficiency and trust. And just keep up the practice.