How Much Of A Raise Should You Give Your OFS?

It goes without saying that a salary increase will most definitely motivate an OFS to work harder and be more loyal to your business.

Online Filipino Specialists are often too shy to ask for a raise. But when they do, that means they’ve already mulled the decision over a hundred times in their minds. They’ve asked other OFS’ if they should ask for a raise. They’ve Googled stuff like “When is the right time to ask my client for a raise?” and all that. Some of them may have even posted that question on freelancer Facebook groups.

So what should you do then?

As their client, your OFS would be grateful if you initiate the negotiation for a salary increase.

Negotiating a Salary Increase with Your OFS

You wouldn’t go blindly into the next crucial step that you need to take to grow your business, right?

By this principle, you also shouldn’t go blindly into the negotiation process on how much of a raise you should give your OFS.

Here are a few questions that you can ask that will help you come to the right decision at the right time.

How Much Can Your Business Afford?

Check your books. Can the business afford to give a raise at this stage? If yes, then how much?

If your business has reached a stage where you can afford to give a raise, then you have to create a proper plan before giving the raise.

Take your business projections for the coming months or even years. Make sure that the salary increase is manageable. Leave your business enough room to expand so that you can save up a budget for any succeeding salary increases.

How Much of a Raise is Your OFS Expecting?

It wouldn’t hurt to ask your OFS how much they are expecting. Chances are, they wouldn’t expect too much.

We had a peek at the questions posted on Filipino freelancer communities on how much to ask for. A surprising majority of the responses say that at least $1-$2 per hour should be enough, while others say it must be at least half of what the OFS is earning now.

A good thing about asking your OFS is that you can compare their expectations with what you can afford.

Is the OFS’ Work Performance Worthy of a Raise?

Most of the time, when an OFS is asking for a raise, they would have already measured their own performance. The first thing they will consider is the length of time that they’ve been working with you.

In most cases, they would be hoping for an increase after at least 6 months. This is especially true if they started at the lower end of the salary spectrum, say around $3-$4 an hour. Adding a dollar or two to this rate after six months would be enough for your OFS.

What if the OFS started at a higher rate already?

You may have agreed on a higher rate with the OFS during the interview process. So increasing their rate after 6 months could put a strain on your company’s budget. What we’ve seen some clients doing is that they negotiated the rate wherein the OFS starts at a slightly lower rate than their asking price.

Once the OFS has reached the performance expectations after an agreed period, you can then increase their salary to the expected rate. Say they initially asked for $8 an hour during the interview. Negotiate to pay them $5-$6 during the probationary period, then increase it to $8 if they meet expectations.

What Alternatives Can You Offer In Lieu of a Raise?

The business just might not be in a good position yet to give a monetary increase. If so, what alternatives can you offer?

We’ve scanned through the discussion boards on OFS communities to see what alternatives they are willing to consider instead of a raise.

Here are a few alternatives that stand out:

Assistance with government-mandated benefits. The Philippines has strict laws covering office-based employees. Their employers are required to pay a percentage of the government-mandated benefits once they pass the probationary period. Unfortunately, Online Filipino Specialists aren’t so lucky. Most of them are paying for these benefits out of their earnings. So a little help with these monthly payments would go a long way.
Help them pay for their insurance or an HMO. Just like the government-mandated benefits, your OFS is most likely paying for life insurance and/or an HMO provider. You can offer to pay for a portion of the insurance or HMO premium.
Holidays or paid time off. Let’s face it: people who work online don’t have holidays. This is an accepted fact in the Filipino Online Specialist community. So if you offer to give them paid time off on national holidays plus a week or two at Christmastime, they might just say yes.
Give them bonuses. The 13th-month bonus is a big thing in the Philippines, and it’s actually part of the mandatory benefits. This means that you basically pay them their full rate for an extra month, hence the 13th month. Depending on your budget, this can be given out in full at the end of the year or divided into two payouts: May and December.

There may still be other alternatives for a salary increase that we haven’t covered here. When you’re stuck in making a decision, the best thing to do is to ask your OFS directly: what alternative is acceptable for them?

The Bottomline

Everything considered all we can say is that “How much of a raise should you give your OFS?” is the wrong question to ask.

Ask yourself this instead: “How much of a raise does my OFS deserve?”

There is also one undeniable truth here. Regardless of whether you double their salary, raise it by a small percentage, or give them alternatives, it would still be a lot cheaper than having to train a new OFS. They’ve spent the last 6-12 months getting a good grasp of the ins and outs of your business. This time, they can give you a different perspective on possible solutions to challenges and recommend strategies that could be helpful for the business.

That raise is a win-win for everyone.