If companies can profitably outsource their work to employees in other countries, can enterprising employees do the same thing?
Apparently yes -- at least until they're caught.
Last month, Verizon published a 2012 case study describing how an employee, call him "Sam," while working for a U.S.-based infrastructure company, outsourced his responsibilities to a Chinese firm, giving them less than one-fifth of his six-figure salary for their efforts.
Sam's strategy worked so well he picked up freelance jobs on the side that he also farmed out. Sam made $200,000 a year after paying his contractors and used his free time on Facebook, Reddit and watching cat videos.
Sam's "work" schedule included two hours surfing of Reddit, 1.5 hours of lunch, an hour on ebay, 2.5 hours on Facebook and LinkedIn and a 30-minute, end-of-day email update to management.
Despite Sam's outsourcing all his work, his supervisor gave him exemplary performance reviews, noting that his assignments were timely and pristine and his code clean and well-written. For multiple quarterly reviews, reviewers described Sam as the best developer in his company.
Ultimately, the jig was up. Verizon's security team told Sam's company that they had uncovered irregular activity in the VPN logs, with an active, daily connection to Shenyang, China, and hundreds of PDF invoices from a Chinese consulting firm. This alerted them to Sam's ruse.
Although Sam initially denied everything, the company fired him. Sam had apparently Fed-Exed his sign-in to China so the Chinese contractor could log in under his credentials. As Sam's employer was a U.S. "critical infrastructure" company, it couldn't afford the security breach of an unauthorized Chinese VPN connection that had apparently logged in for the entire work day for more than six months.
Was firing the best answer? "While this employee was paid his full salary to perform work, he wasn't," notes Deloitte's Senior Manager of Employee Relations Michele Sommer. "He simply forwarded his job to a contractor, essentially eliminating his position. After learning this, his employer needs to decide if they can trust this employee and if he can still add value to their operation. If his employer has a policy against being accessed from outside the U.S., they need to address his policy breach."
Further -- and despite Sam's amazing delegation skills -- lawyer Brit Weimer views Sam's actions as fraud. According to Weimer, "Employee dishonesty is a form of insubordination. Employers cannot and should not tolerate unauthorized delegation concealed from one's employer by a smokescreen of lies."
Additionally, Weimer notes, Sam exposed his company to risk. "By not running his work through regular channels, Sam deprived his supervisors of the ability to negotiate confidentiality agreements with their 'hidden' vendors, and thus to protect the company's intellectual property and trade secrets."
What should Sam have done? As a highly compensated professional employee, Sam was expected to be innovative in delivering benefits to his employer. Sam could have presented his actions to his managers as an ingenious way to save the company money -- and probably netted a promotion for his efforts. He would have had the additional reward of knowing he conducted himself in a clean, above-board manner.
Alternatively, Sam could have left his company and started his own - and potentially turned it into a Fortune 500 success story.
Meanwhile, we're left wondering -- where was Sam's supervisor and how is his company handling his lack of true oversight? And who are these Chinese contractors and are they available?
Dr. Lynne Curry is a management- employee trainer and owner of the consulting firm The Growth Co. Inc. Email questions to firstname.lastname@example.org. You can follow Lynne on Twitter @lynnecurry10.