Not money, though money is tight. Founder attention.
Every hire consumes attention before it produces output, and across a 7 to 16 hour time gap that consumption is heavier than it would be locally. Questions take a day to answer. Context that would transfer by proximity has to be supplied deliberately.
The practical consequence is that at this stage the number of hires matters less than whether each one reduces founder load or increases it. A specialist who needs their work defined for them increases it. A generalist who can operate with ambiguity reduces it, even if their output is less refined.
Market Guides
Hiring in the Philippines as a pre-seed or seed stage startup
In short
At this stage the useful hire is usually a generalist who can operate without process, not a specialist who needs one. The 2 recurring mistakes are hiring for a role the founder cannot yet describe, and treating a first international hire as a way to avoid making decisions rather than a way to execute them.
This is an illustrative overview of what companies at this stage typically encounter rather than an account of any specific company. Pre-seed and seed hiring in a new country is a different problem from Series A hiring, and the differences are usually underestimated.
What is actually scarce at this stage
What the Philippines can realistically do here
Well suited: operations and business support that removes routine work from a founder, customer support and success for an early customer base, engineering capacity at mid level where the problems are defined, finance and bookkeeping, marketing execution against a decided strategy.
Less suited at this stage: roles that require inventing the strategy, roles where the founder cannot yet articulate what good looks like, and single senior hires expected to build a function while the founder is still deciding what the function is.
That is not a limitation of the market. It is a limitation of hiring anyone, anywhere, into an undefined role, and the time gap amplifies it.
Less suited at this stage: roles that require inventing the strategy, roles where the founder cannot yet articulate what good looks like, and single senior hires expected to build a function while the founder is still deciding what the function is.
That is not a limitation of the market. It is a limitation of hiring anyone, anywhere, into an undefined role, and the time gap amplifies it.
The first mistake, hiring an undefined role
The pattern is recognisable. A founder is overwhelmed, decides to hire, and writes a job description that is a list of everything they do not want to do.
The hire arrives capable and willing, and spends 2 months trying to work out which of the 9 things is the priority. The founder concludes the hire was not proactive. The hire concludes nobody knew what they wanted.
The test before starting a search: can you describe what this person will have done in 90 days, specifically enough that you would both agree afterwards whether it happened. If not, the problem is not yet a hiring problem.
The hire arrives capable and willing, and spends 2 months trying to work out which of the 9 things is the priority. The founder concludes the hire was not proactive. The hire concludes nobody knew what they wanted.
The test before starting a search: can you describe what this person will have done in 90 days, specifically enough that you would both agree afterwards whether it happened. If not, the problem is not yet a hiring problem.
The second mistake, structure taken lightly
At this stage the temptation to engage someone as a contractor is strongest. It is faster, it feels lighter, and it defers decisions.
Philippine law assesses employment by the substance of the relationship, applying a four fold test with control as the decisive factor. A full time person working your hours, under your direction, using your systems, is employment regardless of the agreement. The exposure includes unpaid statutory contributions, 13th month pay, withholding tax and security of tenure, and it is retroactive.
The exposure is small when the arrangement starts. It compounds quietly and arrives when the relationship ends, which at this stage is a materially worse time to find out.
Philippine law assesses employment by the substance of the relationship, applying a four fold test with control as the decisive factor. A full time person working your hours, under your direction, using your systems, is employment regardless of the agreement. The exposure includes unpaid statutory contributions, 13th month pay, withholding tax and security of tenure, and it is retroactive.
The exposure is small when the arrangement starts. It compounds quietly and arrives when the relationship ends, which at this stage is a materially worse time to find out.
What the numbers look like
Statutory employer costs add roughly 11 to 16 percent to salary depending on seniority, falling as salary rises because SSS, PhilHealth and Pag-IBIG all cap out. 13th month pay is mandatory at 1 twelfth of annual basic.
Your own entity is not a realistic option at this stage and does not need to be. It generally requires around USD 200,000 in paid-up capital under the Foreign Investments Act and up to 5 months of setup, and a widely used rule of thumb puts the crossover somewhere around 10 to 15 people.
Your own entity is not a realistic option at this stage and does not need to be. It generally requires around USD 200,000 in paid-up capital under the Foreign Investments Act and up to 5 months of setup, and a widely used rule of thumb puts the crossover somewhere around 10 to 15 people.
The honest version of when the answer is no
If you cannot describe the role in outcomes, wait.
If nobody has time to onboard the person properly, wait. A hire who receives no context in the first month has usually decided about you before month 3.
If the work changes weekly because the product direction is still moving, wait or hire the most adaptable generalist you can find and tell them that is the job.
None of those are Philippines problems. They are stage problems, and hiring internationally does not solve them, it makes them more expensive to discover.
If nobody has time to onboard the person properly, wait. A hire who receives no context in the first month has usually decided about you before month 3.
If the work changes weekly because the product direction is still moving, wait or hire the most adaptable generalist you can find and tell them that is the job.
None of those are Philippines problems. They are stage problems, and hiring internationally does not solve them, it makes them more expensive to discover.
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