If you have ever worked at an Internet-based company, chances are you’ve either dealt directly with outsourcing or have heard about it. Thanks to globalization, it’s now easier than ever to outsource your programming, customer service, and other corporate staffing.

Buyer beware! It’s up to you to protect yourself. For every honest outsourcing company, there are two that are just waiting to string you along. Here are some of the practices I’ve encountered with almost every outsourcing company I’ve worked with. From speaking with programmers and Virtual Assistants (VA’s), I gather these techniques are quite common throughout the Philippines and India:

1. They give clients fake resumes, so make sure to ask coding questions (on webcam and www.Join.Me).
2. If you hire two people they will have one working, and switch them around (all junior).
3. If you hire senior they will still give you junior.
4. If you hire one “dedicated” programmer, they assign two or three clients to that one programmer. This means less overhead for the outsourcing company – less computers, less staff, infinite number of clients, no need to wait to hire, they always have available staff.
5. Charge clients more than six to eight times what they pay the programmers (most programmers in the Philippines are paid about $120 to $180 US per month – for full-time work – by the outsourcing companies they work for.)
6. They tell everyone to say the same stuff on chat, so the client won’t recognize the difference in people “yes ma’am, yes sir, I’m still working on it”.
7. They have unrelated people who have nothing to do with the project sit and chat with clients and say “I’m still working on it, yes ma’am, etc.”
8. Steal and sell database and client assets, reuse code on multiple client sites.
9. If you need a shopping cart, or feature on your site, they will tell you it has to be made custom and it will be fast to code, then keep delaying and drag it out for many, many months. If you check your code, you may often find that the new feature that they added was actually plug-and-play pre-made code that should have taken a day to customize and was just an excuse to rack up months worth of extra hours.
10. For designers: they have one designer for the whole office and many clients, and they get the designer to go from client to client and make one design, then other cheap (minimum wage) non-designers make copies in other colors. If you notice that sometimes designs are great, and sometimes the quality is bad, or just variations in color, that’s why.

Here are a few tips I learned along the way, to help you navigate the murky waters of outsourced staffing.

Hiring Tips:

1. ONLY hire companies on this list: http://www.bpap.org/bpap/index.asp?industry
   • [Beware Hubport Interactive, PhilWeb Services and Online Experts (all in the Philippines). I’ve found all three to be using unethical practices.]
2. Be skeptical by default; think about how they could be scamming you.
3. Interview with webcam and have them answer coding questions.
4. Interview with webcam (you can use Google Talk) and notice the office environment: are there empty work stations with computers that are on? are people switching desks?
5. Red flag: if they don’t need to wait to hire, they always have available staff (then they are assigning multiple clients to one programmer).
6. Always ask for a list of sites they worked on, and email and say that XX coder said they built your site. Did they, how were they, if not then who did (maybe it was a company the coder worked for and the client didn’t know the coder’s real name).
7. Never hire a project manager at the same company as your coders – it’s wasted money.
8. Never hire more than one coder per company, and assume whoever you will get will be junior.
9. Have another coder at a separate company check the code every so often, to see if it’s sloppy, or if they’re racking up too many hours on things that should be quick to code or customize.
10. Protect your assets, don’t let them have access to your database.
11. It’s a bit better if the company has a branch in the US, but it still doesn’t mean you can trust them. They are very practiced in how to gain your trust and sell you on their company being more ethical than others, but even as they speak, they know they are going to employ all the same shady practices they preach against.
12. Make them sign a good employment, NDA, non-compete contract that also prohibits them from further outsourcing the work.

Working Tips:

1. Make them install and use this software: wwwAgentGuardian.com (to make sure they’re online the hours they bill you for, and aren’t on Facebook half of the day, or away from their computer, etc.)
2. AgentGuardian gives screenshots every 5 min, but you can also occasionally share your screen using www.Join.Me so you can see what they’re doing in real-time (especially great with designers, so you can direct their progress).
3. Even if you use computer monitoring software, they may still have two computers – and multiple clients – and just move the screen a bit every so often so it looks like there’s activity. If they’re not getting much done, there’s always a reason. This is a good time to start using www.Join.Me on a daily basis.
4. Keep them on one-way webcam while they work (so you can see them, but they can’t see when you’re away from your desk).
5. Carefully track their progress. Use a project management site like BaseCamp to set milestones, deadlines, and easily track and comment on tasks.
6. Be very clear with your instructions  they’re not mind-readers – they need very, very specific instructions with visual mockups.
7. Use Codesion to make sure they don’t break your live site, and if they do they can easily roll it back.
8. Hire a very senior local programmer that you trust to check on the code occasionally and make sure it’s not overly sloppy and slowing down your site.
9. If they are slow, or you continually don’t get a response in chat for over 15 minutes, fire them. 90% of the time it means that they’re not being honest and you’re not their only client.
10. Make sure that the minute you cancel with a company you immediately block them from future payments.
• When I tried to cancel with one company, Hubport Interactive, they tried to immediately put through an extra charge on my AMEX of over $6000. saying that there had been a billing error for almost two years, and that they just learned of it. I proved via emails and contract that this was not the case, but they still tried to make the charge go through the same-day as they sent their email notifying me of it. I have AMEX to thank for viewing the evidence and reversing the charge.

That said, I have had several good experiences with outsourced writers and VA’s who are particularly smart, honest and diligent. If you happen to find the right fit, and employ the aforementioned techniques, you could end up with a long-lasting and fruitful relationship for both parties.

Good luck, and remember, $5 per hour is only cheap if they’re actually working the hours they’re billing. If their real rate is $20 an hour because they have three other clients, then you may want to -gasp! – consider bringing the work back home – and into your office.

A comment on this article from an ex-Hubport Interactive employee, that has since been deleted:

Also see: Online Monitoring Software: An Employee’s Perspective