Do you only want to hire Filipino staff because you’re a scrooge and you want work done for peanuts?
Remember if you pay peanuts, you get monkeys.
In this article, I’m exposing in raw detail what Filipino staff should get paid and what their standard of living is at different levels of income.
Can they afford to put their kids through school?
Do they have to take a second job just to put food on the table?
If you’re like me, you’ve asked these questions and probably many more.
Overview of the Labour Market
Overall, the Philippines is an employees’ market.
It’s said that an employee can leave one business at morning tea and start with another by the afternoon.
This isn’t actually true because the labour code in the Philippines is strict that employees give 30 day’s notice to leave a business, but you get the picture.
There’s more to recruiting and keeping virtual assistants. You have to ensure you pay on time, treat them with respect, evaluate them regularly, give them paid holidays, and consider extras like health insurance and bonuses.
The horrific stories staff tell me about their previous working conditions and salaries have alarmed me.
It’s no wonder they want to jump ship.
Some Nagging Questions
Even though we pay our team well, every so often, I find myself asking…..
What does it cost my team to live comfortably?
Do I pay them enough?
Am I exploiting lower wages?
Or, am I paying my teams much more than the average and therefore giving them a better life?
For peace of mind, I interviewed staff and did some research online.
I’ve broken the findings down into 5 key areas.
1 – the Philippines versus Australia
After 10min of Googling (is that even a word?), I discovered:
- The website Numbeo states that:
“You would need around AUD $2,516.86 (99,161.36₱) in Cebu per month to maintain the same standard of life that you can have with AUD $6,200.00 in Melbourne (assuming you rent in both cities).”
- The website Pay Scale states that:
the average wage in the Philippines for a customer services representative is AUD $790 (19,800₱).
Holy smoke, there’s a huge difference of 3 times between what a Filipino would need to earn compared to what they actually receive to have the same standard of living in Australia.
2 – Do Filipinos expect the same standard of living as Australians?
In my trips to the Philippines, I can tell you that Filipinos don’t have the same expectations as Australians.
A Filipino considers they are doing well if they:
- Buy a daily coffee
- Can pay shopping centre prices at the food court compared to street vendors
- Buy regular items such as clothes and shoes
- See a movie
Australian’s take the above as a given, so they consider they are doing well if they can also:
- Own a car
- Live in a 3 bedroom, 2 bathroom house they are paying off
- Afford to regularly travel overseas
Consider this example, one-third of Australian parents CHOOSE to send their children to private schools, costing them AUD $20,000 per annum per child. That’s double the annual customer service wage in the Philippines just to send a child to a private school instead of a public school where the standard of teaching is arguably similar and would cost around AUD $850.
3 – Non-cash remuneration
This is a big trap, so don’t get caught out.
Let’s say you’re interviewing a candidate and they earn ₱20,000/mth but you were considering paying them ₱30,000/mth.
You start second-guessing yourself why you should pay 30% more.
Make sure you ask questions about their ‘other benefits’ such as:
- Is breakfast supplied? If yes, is it just bread or is it a cooked breakfast?
- Do you get HMO (health insurance)? If yes, can you include family members at no extra cost?
- How much rice money?
- Do you get a travel allowance?
- Do you receive an attendance bonus or a Christmas bonus?
These extra benefits could add up to another ₱10,000 per month.
4 – Comparison of living standards for different jobs
If we have to, anyone can live within their means.
As an employer, do you want your staff to value their job, or just be doing it until they can find something better?
Imagine training a team member for 6 months only to have them leave because they didn’t feel valued.
The table below gives you a guide as to the salary you should be paying your staff. Mind you, we have staff joining us with 3+ years’ experience and they are being paid as junior call center agents.
|Low Paid||Average||Above Average||High||Very High|
|Occupation Type||Barista, Nurse, ESL teachers||Junior call center agent, Private school teacher||Experienced call center agent, Team Leader, Banker, Car salesman||Manager, Engineer, Architect||Executive – Director, CEO|
|Average Wage||₱10,000 to ₱15,000||₱15,000 to ₱20,000||₱25,000 to ₱40,000||₱40,000 to ₱80,000||₱80,000 above|
|Water and Electricity||₱1000||₱3,000||₱3,000||₱5,000||₱8,000|
|Mobile and Data Monthly Plan||₱300||₱500||₱1,000||₱2,000||₱3,500|
|Home cable and internet||N/A||N/A||₱1,500||₱3000||₱3000|
5 – How do the lowest-paid staff survive?
When a low-paid person is earning as little as AUD$250/mth (₱10,000), there is nothing left for social activities, hobbies, or personal pleasure.
So although happiness is an internal mindset, not having enough money can contribute to people’s level of health, wellness and mindfulness.
These entry-level working Filipino citizens would need to spend at least ₱10,300 on housing rent, bills, food, transportation, laundry, bathroom, and a phone credit allowance.
They need to be living at home with family or living in a hostel-style accommodation where they only have a bedroom and need to share the bathroom, kitchen and lounge with other tenants.
6 – What about above-average paid staff?
Staff earning an annual income of ₱20,000-₱25,000, may opt to get an apartment instead of living in a cramp boarding house or bed space. A basic apartment can cost between ₱6,000-₱10,000 per month whereas renting a whole house can be anywhere between ₱12,000 to ₱20,000 depending on the location and neighborhood.
For a single person living on his/her own, ₱15,000 can get a person by with a little extra to enjoy personal desires.
But do you want to pay staff so that they can just get by?
Maybe they’ll end up taking a second job working at night and then start not performing all of a sudden and you begin questioning why.
Out of the blue, they stop communicating with you.
Of course, you blame them and blame the whole Philippine Virtual Assistant industry. But you shouldn’t.
Did you consider their feelings? Did you respect them? Did you create an open and transparent relationship? Or did you act as a dictator from across the ocean and expect them to perform for you?
By the way, if this is you now? Don’t worry, I was there too 4 years ago. But we can all learn to be better. I’m still improving every day.
7 – Above average working-class Filipinos with KIDS
All VA Platinum staff start off in this income band between ₱25,000 to ₱40,000.
Many of our team have children because we typically hire staff with years of experience.
Here are common expenses you will have to prepare for when bearing fruit:
A one-time fee (depending on how many children you intend to have!). Note that the Philippine government offers monetary assistance of up to ₱32,000 expecting mothers for the first (4) four children.
|Normal Childbirth Hospital Fees||₱100,000|
Then here comes your monthly expenses on top of hospital bills and month-to-month expenses.
|Infant Necessities (Milk, Diapers, etc.)||₱6,000|
|Tuition and other school fees||₱6,600|
|Nanny or household help||₱4,000|
To conclude, for an average Filipino household family with 1 child to maintain a comfortable lifestyle, the family income must reach at least ₱50,000 per month. Should they consider adding more children, the cost would be higher.
8 – Other things to know
Many Filipinos support their family, parents included. In fact, many are the main breadwinners of their families, supporting their siblings through school and helping their parents in their retirement.
This is important to Filipinos so don’t downplay it. Understand it, and value that you have a staff member that is looking out for their whole family. I get choked up about this because it’s a special kind of person that does this.
Filipinos don’t like conflict, so try to be even-tempered and fair with all your feedback.
Filipinos are traditional and have important annual holidays to celebrate their ancestors and religions.
Cash is the best bonus/reward.
What have I learnt?
It’s not easy to get the equation right to pay your Philippine Virtual Assistants the right wage.
There’s a lot to consider and if you’re still confused, don’t worry, I think you have to take each situation as it comes.
The main thing I believe is to pay your staff slightly more than you feel comfortable paying. This will help ensure your staff feel valued and they will want to reward you back with incredible performance.
Lastly, I can’t stress this enough….get over and meet your Virtual Assistants. Get to know them. Understand where they live and how they get around.
Every time I’ve done this, it has helped me know what to pay my team and the rewards I get back are 10x.