CON 2025 049 | Recruitment Fees and Costs Research Consultant

Project Context

MBHR in Asia is a regional programme aimed at promoting corporate responsibility to respect migrant workers' rights in line with the United Nations Guiding Principles on Business and Human Rights (UNGPs). It is being implemented in the Philippines, as well as Cambodia, Indonesia, Malaysia, Nepal, Thailand and Viet Nam. Through MBHR in Asia, IOM collaborates with governments, private sector and civil society to uphold the human and labour rights of migrant workers in key sectors and migration corridors.

Background and Scope of Research: 

Since the start of its labour migration program in 1974, the Philippines has built on 50 years of experience in continuously developing and strengthening its institutions, laws, and policies to protect the welfare and rights of international labour migrants. Often at the forefront of global efforts, the Philippines has set an example in advancing migrant workers protection. The establishment of the Department of Migrant Workers (DMW) in 2022 marks a significant milestone, underscoring the Philippine's commitment to improving its migration governance and enhancing protection of Filipino migrant workers. The DMW is an executive agency created to fulfill the State's mandate to: protect the rights and promote the welfare of OFWs and their families, regulate all manner of legal recruitment and foreign employment of its nationals, ensure overseas employment is a choice rather than a necessity, strengthen the domestic labor market for the effective reintegration of OFWs, and progressively align programs and policies with the 23 objectives of the Global Compact for Migration (GCM). Additionally, the creation of the DMW introduced into Philippine law its first formal definition of ethical recruitment: "the lawful hiring of workers in a fair and transparent manner that respects and protects their dignity and human rights" and formalized its longstanding commitment to promote ethical and professional recruitment. 

Despite the advancement, the Philippines has yet to fully adopt one of the key principles of fair and ethical recruitment: the prohibition of the charging of recruitment fees and related costs to migrant workers, otherwise known as the Employer Pays Principle (EPP). As embodied in ILO Convention No. 181 (which has not yet been ratified by the Philippines), the EPP is an international best practice meant to reduce risks of forced labour, debt bondage and exploitation to migrant workers by preventing workers from accumulating recruitment-related debt. Under current regulations, it remains legally permissible in most cases to charge overseas Filipino workers (OFWs) up to one month's salary as recruitment/placement fee, along with certain specified recruitment related costs. However, the private sectors are encouraged to go beyond this minimum standard by voluntarily adopting the EPP framework; in cases when the law in the country of destination already adheres to EPP by prohibiting the charging of recruitment fees to migrant workers, Philippine law also explicitly requires that this higher standard should be followed. 

To strengthen their human rights and welfare protections for OFWs, and to incorporate fair and ethical recruitment practices in their stakeholder incentives systems, the DMW is exploring ways to promote EPP among employers, private recruitment agencies (PRAs), and countries of destination, and implement measures to reduce (or eliminate) recruitment fees and related costs for workers and jobseekers as per the ILO Fair Recruitment definitions1. However, information is not readily available on what is the total and actual scope of recruitment fees and related costs are in the Philippines, and how much each recruitment stakeholder (OFW, PRA and employer) currently spends for the successful recruitment process of an OFW. Therefore, there is not enough information to advise stakeholders on how to practically apply EPP in recruiting OFWs, or whether and how recruitment fees and costs could be reduced in the Philippine context. 

The IOM has been a longstanding partner of the DMW (and formerly the POEA) on initiatives involving the promotion of migrant worker rights and welfare, advocacy for an enabling environment for fair and ethical recruitment standards, and prevention of illegal recruitment, human trafficking, forced labour, and exploitation of OFWs. Thus, in continuous support for the above initiatives, IOM's proposed research aims to provide the DMW with comprehensive evidence and data on recruitment fees and related costs involved in the recruitment of OFWs through Philippine PRAs, and subsequent recommendations for the reduction of these fees and costs and the promotion of EPP. This approach is in line with the NAP-FER, which does not directly espouse a blanket prohibition of elimination of recruitment fees, but instead emphasizes the development of a supportive policy and regulatory environment to enable more recruitment and employment stakeholders to implement EPP and align their business practices with international Fair and Ethical Recruitment standards.  

The key objectives of the research would be the following: 

1. To provide the Philippine government with a complete overview of all recruitment fees2 and recruitment-related costs, including "hidden" administrative, operational, and time costs involved in internationally recruiting an OFW in three (3) migration corridors;  
2. To provide data to the Philippine government to support the development of "charge rates"4 or a clear public guidance for stakeholders (OFWs, PRAs and employers) for two types of migration corridors: Type 1. where EPP is legally required; and Type 2. where fee-charging is still legally allowed. The "charge rates" would be based on an evidence-based understanding of: (a) the actual costs borne by the worker (and their family) during the recruitment phase up to deployment, including "hidden" costs where possible to identify; (b) the costs actually covered by employers per type of migration corridor; and (c) costs actually absorbed by a PRA for deployment of an OFW per type of migration corridor.  
3. To identify evidence-based factors that (a) discourage employers of OFWs from adopting the EPP and (b) make it challenging for Philippine PRAs to find and secure employers who are willing to practice EPP; and  
4. To provide recommendations to the Philippine government on: effective measures to reduce recruitment fees and related costs in the recruitment process of OFWs; communicating to stakeholders the actual costs of recruiting OFWs from the Philippines; the use of the data to inform DMW policies on incentives for employers and PRAs; and jointly advocating with private sector for broader EPP adoption among employers and countries of destination.  

The results of the research shall also inform and compliment IOM's ongoing partnership with the DMW on strengthening overall labour migration policy, including initiatives to incentivize private sector stakeholders practicing fair and ethical recruitment and human rights due diligence, and to support capacity-building and professionalization of the recruitment industry by standardizing management systems requirements for PRAs.  

Organizational Department / Unit to which the Consultant is contributing

The Consultant will report to IOM Philippines' Labour Mobility and Social Inclusion (LMI) Unit, under the MBHR in Asia Programme. (Project Code: LM0532)

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