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IT SERVICES

Hot Market: The Outsourced Work Force
 

More businesses are turning to remote workers. But can you really be sure that your off-site employees are working?

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Some 40 percent of the U.S. working population could do at least part of their jobs from home, and roughly 30 million work from home at least one day a week. Although 75 percent of managers say they trust employees, a third of that number would like the ability to monitor remote workers, according to the Telework Research Network. Meanwhile, 74 percent of business leaders say outsourcing can help a company survive, according to Capgemini, a consulting firm.

The Inspiration: In 2003, Odysseas Tsatalos, co-founder of the online accounting firm Intacct, wanted to hire his friend Stratis Karamanlakis to do some development work. The problem: Intacct is based in Silicon Valley, and Karamanlakis lived in Greece. Tsatalos's boss raised objection after objection, wondering about time zones, communication, code sharing. Finally, Tsatalos drilled down to the CEO's abiding concern: He had no way to make sure Karamanlakis was doing the job. Tsatalos responded by creating software that allows supervisors to monitor and communicate with remote employees.

The Business: oDesk, based in Redwood City, California, is an online marketplace in which companies hire remote contractors for tasks as varied as software development and customer service. The company provides tools that let employers track work as it is performed and the number of hours contractors spend on the job. The company also picks up the HR chores of payroll and taxes.

How It Got Started: Tsatalos left Intacct and together with Karamanlakis (still in Greece) launched a company to help large employers manage remote full-timers. To save money, they kept staff lean and hired contract engineers and developers from around the world. Tsatalos and Karamanlakis managed the staff members' work and paid them through the oDesk system. During sales calls, Tsatalos and CEO Gary Swart -- a former IBM business unit executive and software-sales veteran -- used a demo from their own business to illustrate the product's capabilities. Buyers saw the work- and time-monitoring tools in action. They also saw the internationally dispersed talent logged in to the system. "They said, 'Who are these guys?' " says Swart. "We said, 'They are people we found from around the world.' They said, 'How can we get access to these people?' "

The founders swiftly realized there was significant demand for a marketplace in which companies could source talent that has been vetted (by oDesk) and rated (by other employers). They began lending out their contractors to clients; the contractors told friends and talked about the service on professional sites. Within a few months, 1,000 contractors had signed on looking for work. About 1,500 more now sign up with the company almost every day. oDesk has more than 750,000 contractors and about 200,000 corporate clients.

The Result: oDesk has revenue of $120 million, with three-year growth of more than 1,000 percent. Swart says demand is "unbounded." "Take every company with 100 employees and ask, 'What percentage of those jobs could be done remotely, and can I save money and get access to the very best talent by doing them that way?' " he says. "If it's five out of 100, then that's the oDesk market. And it is massive."

IMAGE: Flickr
Last updated: Nov 1, 2010

LEIGH BUCHANAN is an editor-at-large for Inc. magazine. A former editor at Harvard Business Review and founding editor of WebMaster magazine, she writes regular columns on leadership and workplace culture.
@LeighEBuchanan




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