We love elance. We currently employ about 10 full-time equivalents on elance. I'd agree with the linked article. For most serious skills (beyond basic HTML mar

We love elance. We currently employ about 10 full-time equivalents on elance. I'd agree with the linked article. For most serious skills (beyond basic HTML markup) you need to pay $15-$25, but the results we've got have been top notch. Here's what we've learnt: * Only hire people to do stuff you understand. You don't need to be an expert on it, but you have to be able to understand what you are speccing and what you are getting. * For anything beyond basic HTML we've never had success with a company from the Indian sub-continent. For basic HTML stuff we've had good results. * Our best results have come from Eastern Europeans, but we've used people from the US, and western Europe as well. * For many projects we hire people on an hourly rate. There are exceptions - if we have a really clear spec, and it's a side project (e.g. we need some flash client work) then we may do it fixed price. * Deal only with individuals - ignore companies. They only exception might be a small bunch of 2-3 hackers working as a team. * As with any form of recruitment - there are good people and more bad people. As with buying on ebay - look at feedback, and use your judgement. * If you're looking for people on an ongoing basis, then be prepared to interview and test them thoroughly. When hiring C++ coders we actually pay people (as a elance project) to do a 20 hour long programming test. This might cost us $400, but we prob take on 1 in 2 people who get this far. So an $800 hiring cost is cheap, especially if it gets people up to speed on your technology. We normally get them to right a cut down version of our actual project. * You need to monitor people regularly and manage them as you would a physical employee. * Give people respect, and deal with them fairly. * You have to be good at working virtually. We make extensive use of Wikis, Trac, Skype etc and this enables us to manage a virtual team well. The benefits: * For about $20 an hour ($40k per annum) you can get a top class programmer that would cost you $100k an annum in SE England, or the West Coast. But you have no hiring cost and no long term commitment. * We typically can put an advert on elance Monday, be interviewing by Wed, and have taken someone on by Friday to start the next Monday. In the old world it would be arguing for budgets to hire for a month, spending 2 months interviewing, waiting 1-2 months notice period. * We can very quickly bring in specialist skills. E.g. if I need a Silverlight developer, I can find one who can start within a week, and can terminate when the project is done.