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7 Ways to Save on Foreign Domestic Worker-Related Expenses

(Source: sg.finance.yahoo.com)

Hiring a full-time foreign domestic helper is expensive and keeping her employed over a length of time means your associated costs will only continue to increase. Since domestic help employers are responsible for covering a plethora of expenses relating to their employees, you may find yourself spending thousands of dollars a year on your domestic helper alone. However, there are ways you can decrease your costs significantly and still get the help you need. Below, we discuss some tips on how to save on domestic-helper related expenses.

1. Hire directly or hire a transfer domestic helper

Direct hires and transfer maids (domestic helpers who are looking to switch employers before their contract is up) are increasing in popularity because of their cost-effectiveness. By bypassing maid agencies, you can save thousands of dollars on fees, exams and travel costs, spend less time away from work to train your worker and have her start working quickly within a week. Even if you use an agent, the fee for a transfer domestic worker is around S$400—50% cheaper than for a new one. However, the Ministry of Manpower recommends you should be wary of domestic workers who have switched more than 3 employers in a single year. Therefore, we recommend asking your network of friends and family for a referral when hiring directly.

Disclaimer: You cannot hire a Filipina maid directly due to government restrictions.

2. Know what kind of worker you need

Since domestic workers come from a variety of backgrounds, carefully vetting domestic helpers for the skills you need is a good way to save on termination/re-hiring fees and training costs. Finding a domestic worker who has the right qualifications will save you lengthy training costs and reduces the risk that the worker will be a poor fit for your family, which could result in early termination and subsequent penalty fees. For instance, if you need help taking care of a child, an elderly or a disabled, you can find a domestic helper with verifiable qualifications in the respective area. If you prefer to train your domestic helpers on your own from scratch, you may save on wages as untrained or new workers are cheaper than more experienced workers. However, you will end up spending more time on training, which can take you away from your job.

3. Choose your maid agency carefully

Maid agencies fees are the most expensive part of your domestic helper’s onboarding process, with a cost of around S$500-S$2,000. While it is not advisable to go for the cheapest agencies, as those are usually scams, it is still possible to find a good value accredited maid agency that have low prices while maintaining good retention and placement rates. It’s important to find good quality agencies because they can help you save hundreds of dollars of additional costs down the line. Using an over or under-priced agency can cause you to waste hundreds of dollars due to poor customer service, poor quality workers or exorbitant replacement fees. Lastly, agency fees for transfer workers is about half of what they are for hiring new domestic workers, as mentioned previously.

4. Look for government subsidies

A lot of people forget to utilise government subsidies that can actually help to reduce their costs associated with hiring a domestic help. For example, the Ministry of Manpower’s monthly levy of S$265 can be reduced to to S$60 if you have a young child younger than 16, have a disability requiring assistance with daily living or are an elderly person (over 65 years of age). Not only that, you may qualify for a monthly grant of S$120 if you require a domestic helper to assist you with a family member who needs permanent assistance in 3 or more daily living activities.

There are also some medical and dental offices that offer subsidies for your domestic worker. Since some medical costs aren’t covered by maid insurance, dental and other appointments can get quite expensive. NGO’s like the Humanitarian Organization for Migration Economics (HOME) offers subsidized dental care; if you want to utilise their subsidised services, you should make sure to make an appointment well ahead of time because the waiting period can be at least a few months.

5. Purchase high-value maid insurance

Since you are required to purchase maid insurance for your worker, you can save a lot of money by finding the best value plan that offers better than average coverage for a below average price. While some plans will charge up to S$450 dollars and provide skimpy coverage, you can find a comprehensive plan for under S$200. By getting great coverage, you protect yourself from having to pay thousands of dollars for expensive medical costs and you will have options to protect your domain and belongings from theft. Maid insurance plans that offer letter of guarantees and counter indemnity waivers for the security bond can also save you money, since these options free you from depositing S$5,000 and reducing your bond burden to S$250 in the event of a bond breach.

6. Take advantage of your travel or rewards credit card

If you are hiring directly or you have to repatriate your maid, you could use your domestic helper’s plane ticket to your advantage. Using your travel credit card for your maid’s travel expenses can either give you a discount on online travel websites and also allow you to rack up bonus rewards like miles. If you can also use your rewards credit card to earn cash back or discounts on the lifestyle needs for your domestic helper, such a bedsheets, towels, monthly toiletries and other miscellaneous expenses. Since most of these expenditures are unavoidable, wisely utilising credit card rewards can help recover some of those costs.

7. Treat your domestic worker well

Across all industries, employers should be treating their employees with respect and understanding. This is no different in the domestic worker space. If you can build a good rapport with your worker, and she respects you and enjoy working with you, you can actually save money and time you would otherwise spend pitching in to help or re-hiring new maids. If you give her adequate rest, you can prevent mental deterioration and burn-out, which are some of the main causes of poor job performance. A healthy and happy worker will be able to perform all her duties well and will be less likely to run away, saving you costs in the long-run. While this isn’t a guarantee that your worker will perform perfectly and you may still end up with one who has ulterior motives, keeping in mind how she is feeling in your home will help.

Consider other alternatives

If you don’t require full-time help, there are several other options you can utilize to receive domestic help. If you need someone to help you with household chores, you can hire a part-time maid; if you need help with young children, you can consider sending them to daycare or hiring a nanny; if you need help with elderly relatives, you can consider finding a caregiver. These options can save you a few hundred dollars per month, depending on how frequently you’ll require their services. Also, because these services usually charge by the hour (besides daycares), you can tailor them to your needs without making a big upfront investment. However, depending on the amount of help you need, domestic workers may actually be cheaper, considering some cleaning agencies charge S$300/week for cleaning services and nursing homes cost up to S$3,500 per month while the total cost of a domestic worker for is around S$1,100 per month.

The article 7 Ways to Save on Foreign Domestic Worker-Related Expenses originally appeared on ValuePenguin.

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