The First Warning Sign For A Fake IT Worker Is A Discount

Offshore IT staffing services in Australia are not the risk. The risk is an unverified person at the far end of a below market quote. The Australian Sanctions Office advisory on fraudulent North Korean IT workers sets out the warning signs an employer should look for, and the first is that the worker "may have a history of excessive bidding on projects, and may charge below market rates for their work". Cheap is not the benefit on that list. Cheap is the flag.

Which is awkward, because the discount is the reason most founders started looking. Outstaffer's own answer is an employer of record that hires the person locally, so read the rest knowing that.

What the 16 September numbers say about offshore IT staffing in Australia

The Multilateral Sanctions Monitoring Team, which Australia sits on with ten other governments, reported on North Korea's overseas labour program on 16 September. It puts the program at "between US $450 million and $800 million in 2025", generated by "an estimated 35,600 to 101,280 labourers", across "at least 17 countries".

Six days later iTnews reported the Australian Signals Directorate joining Japan, Germany and the United States in an advisory about North Korean operators posing as recruiters. ASD would not say whether any Australian organisation had been hit.

What does the advisory tell an employer to check?

It tells you to verify what the worker told you. Inconsistencies in name spelling, nationality, claimed work location and education history. A worker unreachable during the hours you agreed. A worker who "may refuse or claim they are unable to appear on camera". None of that needs a security budget. All of it needs somebody whose job it is.

What the discount costs when nobody can name its source

At the wide end of the published range, US $450 million across 101,280 workers is about US $4,400 a head for the year. At the narrow end, US $800 million across 35,600 is roughly US $22,500. The whole operation turns on four to twenty two thousand dollars per person per year.

So what does verified employment cost per head?

Outstaffer publishes Employer of Record at $250 a month per employee, which is $3,000 across a year on top of salary. A developer specification machine is published from $10 a month, another $120.

The fraud is not competing against something expensive. It is competing against a $3,000 line you decided you did not need, because the person seemed fine on the call and the rate was good.

Three thousand dollars buys an employer in the country the person lives in, who has seen the identity document, pays them through a local tax file, and issues the laptop. The advisory says restrict remote administration tools. You can only do that on a machine you own.

The honest case for taking the cheap bid anyway

Almost everyone quoting under your local rate is standing in a cheaper labour market, which is why this industry exists. The odds of a 30 person Australian business meeting a sanctioned operator are low, and treating every low quote as a threat leaves you hiring nobody. Verification costs money and weeks.

All true. Your answer to "how do I know who this is" is still a video call and a gut feel.

Related reading

• ASD Says The Fix Is Not In The Model. It Is In Who Holds The Laptop.
• Are Your Offshore Contractors Actually Employees? The 5-Question Test

Where offshore IT staffing services in Australia earn their fee

Not on the rate. On the part you cannot do from Sydney, which is standing in front of the person holding their passport.

Vetting the agency is a different exercise from vetting the person, and both need doing. On the direct route, the mechanics of hiring a developer you will never meet are where identity work gets written in. Sanctions law is not a blog's job to interpret, so get advice on your own arrangement.

My position is narrow. A discount you cannot explain is not a discount. If the price is lower because the labour market is cheaper, say so and proceed. If you cannot say why, you are buying an unknown at a good rate. Run one role through a service that employs the person properly and compare.

What would it take for you to ask a contractor to turn the camera on?