Online Portal Helps Firms Retain Low-Cost IT Help

By JADE BOYD

While the Internet has reduced barriers to competition, high-tech workers in some developing nations still command only a fraction of the salaries they could in the United States. A new online portal aims to take advantage of this by linking enterprises with overseas programmers working for bargain prices.

Verticity.com offers two services: a global IT marketplace and a remote employee management service. At the marketplace, enterprises can bid out projects to competing firms. The services allow U.S. companies to hire full-time workers in Pakistan for a fraction of the cost of hiring skilled U.S. labor, said Jeff Mason, Verticity's chairman and CEO.

In both cases, Verticity acts as an intermediary between U.S. companies and overseas workers. For projects, enterprises pay Verticity before work begins. Verticity holds the project fee in escrow and pays the vendor once the customer approves the work, keeping a 10 percent commission for brokering the deal. Mason said this protects both customers and vendors because enterprises need not worry about paying for substandard work, and overseas vendors have assurance they will get paid once the job is finished.

Vendors such as ProSavvy and SkillsVillage.com use the Web to match up enterprises with IT outsourcers. Others, such as e-ISN.com and IndiaRecruit.com, specialize in outsourcing to Indian firms. Verticity is one of the first to bring the two concepts together and offer the escrow services that take the worry out of hiring overseas help, said Bill Martorelli, an analyst at Hur-witz Group.

The New York-based day trading firm Sonic Trading has bid out two projects through Verticity and is considering hiring some permanent staffers through Verticity's remote employee program, said Brian Walsh, a partner in the firm. About six months ago, Walsh hired a firm in Pakistan to redesign Sonic Trading's Web site, and he recently hired a different firm to produce a multimedia presentation. Walsh said he got a dozen bids for the Web redesign and ended up paying about $7,500 for the job.

"Most of them submitted examples of previous work," Walsh said. "I think I ended up going with the second-cheapest one, but the quality of work is by far the best."

Mason said about 1,200 firms have signed up to bid on jobs at Verticity. More than half are located overseas, with some 300 in India, about 250 in Pakistan and 100 others scattered in countries like China, Ireland, Israel, the Philippines and Russia, he added.

Not all workers recruited by Verticity come from overseas. While low-cost labor gives overseas companies an edge over domestic firms, Mason said U.S. companies land about one-third of the jobs submitted to Verticity. Mason said some small U.S. design houses located far from urban centers have low overhead themselves and benefit from exposure on the site in much the same way overseas firms do. He said some clients also prefer local companies for certain jobs.

Verticity's remote employee management service allows U.S. companies to hire skilled Pakistani IT workers on a full-time basis. Mason said the U.S. employer screens, interviews and hires its own worker, then pays Verticity a monthly fee based upon the employee's skill level. Verticity pays the worker, gives him a computer, a phone and a cubical and retains an onsite manager in Pakistan.

Mason said a range of skill levels is available. College graduates with rudimentary IT skills can be hired for $900 per month, while senior programmers with a master's degree and eight to 10 years' experience cost $2,000 per month.

Walsh said he is thinking of retaining outsourced help through Verticity for some help-desk functions because the price for the service is very appealing. Walsh said he thinks he can outsource his help-desk support to Verticity for about 40 percent of what it would cost to hire full-time workers in New York.