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Over the last couple of months I've talked occasionally about the looming economic situation and I'm about to do it again because it's important to understand what we're facing. Most people would think that the situation we now find ourselves in began with the sub-prime mortgage crisis in the United States but the reality is that it began well before then and probably had its roots way back before 9/11.

Bin Laden said that he would disrupt the US economy with the attack on the world trade centre and he certainly did that. Many people thought that he meant the physical attack on the twin towers would do provide that disruption but the world recovered fairly quickly. What we didn't recover from ... and possibly what he meant ... was the fallout from that attack and the subsequent war in Iraq.

Regardless of the rights or wrongs of that war it has cost a whole lot more than people expected and the US economy couldn't afford such a war that had a high cost in so many areas that most of us would never have even considered. So now we're looking at a recession in the United States ... and other parts of the world too.

Just how long that recession will last has been something that many economists have been considering and at one time it was thought that the recession might only last two quarters and be relatively mild in its effect. If it had then that would have been relatively easy to handle but now it seems that the recession is likely to go on a whole lot longer.

In a House Financial Services Committee Hearing last week one leading economist suggested that we might be looking at a recession that could last a whole lot longer than anyone expected... perhaps as long as six quarters and it could be a whole much bigger impact than many people expected.

That's not the sort of news any of us wanted to hear but, in this business, you can't bury your head in the sand and hope all that bad news will just go away. Instead you need to face the situation squarely and deal with it.

Outsourcing
One of the ways of dealing with a downturn in sales that might come as a result of a recession is to cut costs. In this business one of the ways to cut costs is to outsource as much of the business process as we can to countries where labor is much cheaper.

Over the last few years that has meant outsourcing coding and perhaps even SEO work to places like the Philippines, India and even Russia and Eastern Europe. There is no doubt that labor costs were definitely much lower in those countries and, while the quality of the finished product produced in those countries was less than perfect, many adult webmasters ... and even those in mainstream ... were prepared to live with the lower quality simply because it was cheaper.

But that was two or even three years ago at a time when you could hire a full time programmer in Eastern Europe for around $300 a month. The cost of hiring anybody who can actually do the job you want done certainly isn't that cheap these days.

One well-known mainstream marketer wrote the other day that the cheapest Eastern European programmer he can find these days works for around $1,000 a month and if you want at least some guarantee of quality then you need to be thinking of $1500 to $3000 a month and even then the quality of the work can be a whole lot less than you were expecting.

Of course those figures are for a full-time worker but it also reflects the increased costs for one-off jobs too.

Even in India ... and the Philippines ... the cost of outsourcing is going up and up. Not only is the exchange rate affecting those prices but the workers themselves are beginning to want a higher standard of living and so the prices they charge are going up accordingly.

So if you're looking for a good, cheap outsourcing solution then beware ... good and cheap are not related terms anymore when it comes to outsourcing. You either have to be prepared to pay a higher rate than you might have been expecting or you have to settle for a vastly inferior product at the end. And at times you will still get a crappy product even though you might have paid a relatively high price.

With that in mind, if you are thinking of going the outsourcing route for part of your business don't rush in and grab the lowest price that someone might offer you. Don't rush in and grab a price that's perhaps more reasonable either. Instead look for recommendations from other webmasters - ones that you know - as to which outsourced providers can really produce what you want.

Notice that I added a little proviso there? Make sure you know those who are making the recommendations because you really only want recommendations from those who have actually used the outsourcer they're recommending. Recommendations from people who have heard about the person they're recommending from other people are of little value. Recommendations from people you don't know are of even less value because, for all you know, the people making the recommendations could be in the employ of the outsourcer.

Even in good economic times you need to be careful about who you choose to outsource work to. In tough times like now you need to be even more careful and you should never rush into anything without first checking with those who have personal experience with the outsourcer you're thinking of using.