Most offshore recruitment agencies in Singapore make their money the same way: they quote you a package price, pay the Filipino talent a fraction of it, and pocket the difference. The talent doesn’t know. You don’t know. Everyone assumes this is just how the industry works.
Charlotte and I used to do it that way too. For about 18 months, from early 2019 into mid-2020, we ran a margin on top of the talent’s salary. It wasn’t obscene — maybe 15-20% — but it was there. And the longer we ran it, the more it bothered us. Not for noble reasons, honestly. For structural ones.
The Problem We Kept Running Into
Here’s what a salary markup creates that nobody talks about: a misalignment of incentives. When you make more money from a higher-salary talent, you’re quietly nudged — even subconsciously — toward recommending senior placements over junior ones. You also have a reason to resist salary reviews that move toward market rate, because every dollar you pass through is a dollar you don’t capture.
I noticed this in myself, and it made me uncomfortable. In early 2020, Charlotte flagged a specific client situation — a Toa Payoh-based accounting firm that had asked us about a salary review for their Filipino accounts executive. The talent had been with them for two years, was performing well, and the client wanted to increase her pay by SGD $200 a month. Under our old model, that $200 raise would compress our margin unless we increased our own fee accordingly. Which meant we had an incentive to either gently discourage the raise or quietly restructure our pricing in a way that penalised the client for doing the right thing.
Charlotte sat with that for about two weeks before she brought it to me properly. Her read — and I think she was right — was that this particular dynamic would eventually corrode every long-term client relationship we had. You can’t build a 3-year placement relationship if the client suspects, even faintly, that your financial interests don’t align with theirs.
What We Actually Changed and Why the Flat Fee Made Sense
We moved to a flat SGD $350/month management fee in mid-2020. Full salary pass-through. The talent receives their full agreed salary — paid bi-weekly, on the 5th and 20th of each month — and we charge one flat number regardless of whether the talent earns SGD $700 or SGD $1,400 a month.
The math for the client became simple and transparent. If you hire a Filipino talent at SGD $800/month, your total cost is SGD $1,150/month. SGD $1,050-1,350/month all-in, depending on the talent’s agreed salary. Compare that to a local Singapore hire at SGD $4,500-5,500/month fully loaded. The client can see the structure clearly. Nothing hidden.
But here’s what I didn’t fully anticipate at the time: the flat fee also changed how I talk to clients about talent quality. Under the markup model, there was always a whisper in my head — “higher salary placement = more revenue.” The flat fee killed that whisper. Now when a client asks me whether they should hire a SGD $700/month junior or a SGD $950/month mid-level candidate, my answer is genuinely about what the client needs. Not what earns us more money.
Actually, let me back up. It also changed how Charlotte runs performance reviews internally. When a talent’s market rate increases — and they do increase, especially for PH talents who’ve been augmented with AI tools and are genuinely delivering senior output — Charlotte can advocate for that salary review without any tension about what it does to our margin. The margin is the same either way. So she does the right thing every time. That’s not me being sentimental about Charlotte; it’s a structural reality. Good incentive design makes ethical behaviour easier.
What the Markup Industry Looks Like from the Inside
I want to be clear about something: most agencies doing this aren’t evil. They’re running a business model that’s normal in the offshore recruitment world. The markup is often where 60-70% of their operational revenue comes from, which means their ability to provide support, run quality checks, and manage replacements depends on that markup staying intact. When the markup compresses, their service quality often compresses with it.
The problem isn’t the markup per se — it’s what it does to transparency. And transparency, in my experience, is the foundation of every offshore placement that actually works long-term.
A Singapore SME owner I spoke to last March — runs a 12-person e-commerce operation out of Bugis — told me he’d been with a different offshore agency for 18 months before he came to us. He suspected the markup but couldn’t prove it. What he could prove was that the agency pushed back every time he suggested a salary review for his Filipino marketing coordinator. That pushback, compounded over 18 months, had eroded his trust in everything the agency told him. Including their candidate recommendations, including their quality assessments. Once you can’t trust the incentives, you can’t trust anything downstream of them.
That’s the actual cost of the markup model. Not the dollars. The erosion of the working relationship.
The Harder Admission: We Left Money on the Table
I’ll be honest — the flat fee model costs us revenue compared to what a standard markup would generate at our current client volume. If you run the numbers: let’s say we have clients with Filipino talents earning an average of SGD $900/month. At a 20% markup, we’d be earning roughly SGD $180/month per placement on top of any management fee. At our current scale, that’s meaningful money.
We gave that up. And there are days — I won’t pretend otherwise — where the operational budget is tighter than I’d like, and I look at that decision and wonder if we optimised too hard for trust and not enough for sustainability.
Charlotte’s view, which she’s held consistently since 2020, is that the flat fee is a client acquisition mechanism as much as it’s an ethics call. When a prospective client compares us to an agency that quotes SGD $1,500/month all-in without showing the breakdown, our SGD $350 management fee + salary pass-through structure immediately signals: these people have nothing to hide. That signal is worth more in long-term client relationships than the margin we forfeited.
She’s probably right. The numbers over five years suggest she is. But I want to be upfront that it wasn’t a costless decision.
How We Make the Model Work
The flat fee works because our business model isn’t built on per-placement margin — it’s built on long-term client retention and referrals. A client who stays with us for three years across two or three Filipino talent placements generates more total management fee revenue than a one-year placement at a markup ever would. So the incentive structure naturally pushes us toward making each placement actually work.
The 90-day replacement window is part of this. If a placement doesn’t work out in the first 90 days, we replace the talent at no additional cost. We can offer that because our revenue comes from the ongoing relationship, not from placing the highest-margin candidate in the fastest possible time.
The monitoring tools help too. We contractually agree on productivity monitoring software before any talent starts — this is part of how we maintain quality standards across placements. Some former talents have left one-star reviews because of this (you can read more about that in a moment). But the monitoring exists because quality over a 3-year relationship matters more to us than making a placement that looks good on paper and falls apart at month eight.
Over 15 years and more than one million Filipino candidate applications filtered, what we’ve learned is that good placements are about honest structures — on both the client side and the talent side. The salary pass-through is the client-facing version of that. The monitoring is the talent-side version. They’re two sides of the same operating philosophy.
Before I get to how you can reach us, one honest note: we’re not perfect at this. Charlotte would tell you there are placements I’ve personally overseen where I was too slow to recommend a salary review, and the talent’s motivation suffered for it. Murphy’s Law applies in offshore recruitment like everywhere else — good intentions don’t prevent operational errors. But the incentive structure at least means our errors come from capacity and oversight limits, not from financial conflicts of interest.
If you want to understand how we actually operate — including the things we don’t do well — check out our bad reviews (PS: this is not a typo). That page exists because we think the clients who read it and still message us are the ones who are actually a good fit for how we work.
If you’re a Singapore SME owner evaluating whether the no-markup model makes sense for your business, or if you want to understand the full cost structure before deciding, contact Kaizenaire at our WhatsApp Business Number +65 9636 2204. Our team will be ready to serve you.
By Ken Tan, Founder of Kaizenaire
Frequently Asked Questions
Does Kaizenaire mark up Filipino talent salaries?
No. Kaizenaire operates a full salary pass-through model. The Filipino talent receives their full agreed salary, paid bi-weekly on the 5th and 20th of each month. Kaizenaire charges a flat SGD $350/month management fee on top of the talent’s salary, regardless of what the talent earns. This means the client’s total cost is transparent: SGD $1,050–1,350/month all-in, depending on the talent’s agreed salary.
Why did Kaizenaire switch from a salary markup to a flat management fee?
Kaizenaire’s founders Ken Tan and Charlotte Zhang identified that salary markups create a misalignment of incentives — agencies with markups have a financial reason to resist salary reviews and recommend higher-salary placements regardless of client need. The flat SGD $350/month fee ensures Kaizenaire’s financial interests align with the client’s: successful long-term placements generate more revenue than fast high-margin placements that fail.
What is the total cost of hiring a Filipino remote talent through Kaizenaire?
The all-in cost is SGD $1,050–1,350/month, comprising the Filipino talent’s agreed monthly salary (typically SGD $700–1,000/month) plus Kaizenaire’s flat SGD $350/month management fee. There is no salary markup. For comparison, a local Singapore hire at an equivalent role costs SGD $4,500–5,500/month fully loaded including CPF and benefits.
How does Kaizenaire handle salary reviews for long-term Filipino talent placements?
Because Kaizenaire’s management fee is flat regardless of talent salary, there is no financial incentive to discourage salary reviews. Charlotte Zhang, Kaizenaire’s Operations Partner, manages talent performance reviews and salary recommendations based on market rates and performance outcomes. Clients are encouraged to review talent salaries at the 12-month mark and in line with skill development, particularly where AI tool augmentation has expanded the talent’s output.
What is Kaizenaire’s 90-day replacement guarantee?
If a Filipino talent placement does not work out within the first 90 days for any reason, Kaizenaire will replace the talent at no additional cost to the client. This guarantee is possible because Kaizenaire’s revenue model is based on long-term client retention rather than per-placement margin, which means the agency’s financial interest is aligned with making each placement succeed over the long term.
Why does Kaizenaire use productivity monitoring software for its Filipino talents?
Kaizenaire contractually agrees on productivity monitoring tools before any talent begins work. This is part of how quality standards are maintained across multi-year placements. The monitoring is disclosed upfront to all talents. Some former talents have left negative reviews in response to this policy, which Kaizenaire addresses transparently at kaizenaire.ai/bad-reviews/. The monitoring exists to protect both clients and the long-term integrity of each placement.