Recently the NBI and the National Telecommunication Commission arrested three individuals for illegally routing international telephone calls without going through one of the licensed Telco-Operators (full story here). This resulted in a large uproar from many of the business community about what businesses should be allowed to do (they feel that a VOIP provider should be able to whatever they want since they are leasing the DSL lines). I feel a very interesting point that was not mentioned in the article was whether this group attempted at any point to actually receive the necessary license and pay the appropriate fees as the law is clear that this is necessary.
The reason I bring this up is throughout the past couple of years I have met many businessmen/businesswomen both foreign and local engaged in recruitment and executive search. When I meet them and ask if they have acquired the necessary license from Department of Labor and Employment (DoLE) I am usually met with several typical responses ranging from “The license is not applicable to them since they only do local recruitment”, “They don’t need a license because they only bill a flat rate”, “All we do is source resumes the client ultimately hires them” , or even the best is “There is no license to do recruitment locally”. These are all myths and misconceptions. The fact is, doing any type of recruitment (local) requires a license from the DoLE known as a PRPA a Private Recruitment and Placement Agency license issued from the Bureau of Labor and Employment and any type of overseas employment requires a license from the POEA Philippine Overseas Employment Agency.
The definition of recruitment is passing on any candidate (whether you have interviewed them or not) to a company or individual for any type of compensation (fiscal or otherwise). It does not matter that they are based locally or that you are just charging a flat rate. There is also a restriction on foreign ownership for a recruitment agency which is maximum 25% foreign ownership. Companies like Jobstreet and JobsDB are not actually doing recruitment they are just acting as a classified ad space but even dealing with them companies know that they have a long checklist of requirements before they will even let you post. This is all done with the ultimate goal of protecting the potential hires.
Why it is important to be a licensed recruiter is there are sever penalties for providing recruitment services in the Philippines without the appropriate license including large fines and mandatory jail sentences for those that have recruited more than 5 positions. However there are also penalties for using a company that is not a licensed recruiter and these vary from fines to possible jail time depending on the severity. So when dealing with any company involved in executive search of recruitment ask to see their DoLE license or it could be you who are penalized if there is a complaint from the employee.
While Philippines is a liberalized business environment some industries are still highly regulated and require the proper licenses.
Here at Triple i Consulting we actually work with a licensed partner since we cannot posses our own PRPA license as we are majority owned by our parent company. However combining some of our talents with our licensed recruiter we are able to deliver the highest quality recruitment services.
For more information about businesses that are restricted to foreign ownership or if you need help with your recruitment and executive search in the Philippines feel free to contact us.