For Robert Gray, the owner of Matters in Motion in Cabot, Ark., finding people to help with graphic art design work, Web design and software development was a frustrating process.

After bad experiences with local hires, he turned to the Internet for help and hired a person in the Philippines.

 “He did a fantastic job, he did exactly what I wanted and did it very quickly,” said Gray.

Gray was so happy with the job he ended up paying double the $8 an hour rate the contractor charged and hired him for additional work. Since then, Gray has hired software developers in India.

Finding a person in the U.S. or overseas to do contract work can be risky; after all, there’s little a small business can do to control the outcome. Enter oDesk, an online marketplace that helps small businesses hire, manage, and pay remote freelancers.

ODesk allows small business owners to post a job, whether it’s for a software developer, writer, graphic designer or any job that can be done at a desk, to 750,000 contractors who can apply for the opening.

According Gary Swart, chief executive of the Redwood City, Calif. based oDesk, most jobs get at least 30 applications, but usually more. Impatient employers can search for contractors instead of waiting for applications.

ODesk’s service isn’t unique. Freelancer.com and Guru.com  also look to hook up employers with contract workers. What sets oDesk apart is its software tool.

Any contractor working on a project through oDesk has to log in to the Web site’s virtual office to complete an assignment. In the virtual office, the amount of time a contractor works is logged and communications can take place via instant chat. Each hour the software takes six random screen shots of a freelancer’s desktop. That way the employer at any given time can see what the contractor is doing and ensure the work is being done. It also gives the employer the ability to refocus the work or make suggestions in real time.

“It’s scary to work with someone you never physically met and have no physical contact with,” said Gray of Matters in Motion. “With oDesk you have that piece of software that has to run. “

Web sites like oDesk were born in part out of advances in technology and also because of the economic slowdown. Small business owners have tight budgets forcing them to do more with less.

In marketplace settings, small businesses can get a good price for work with so many people competing  for assignments. oDesk works similar to eBay; contractors get rated based on their performance. Contractors are also encouraged to take free tests on oDesk to increase or prove their experience levels. 

“As a guy from Arkansas that’s been out of the country twice, it’s scary enough as a small company with a limited budget to hire someone to do something in California without a whole lot of control. It’s terrifying to do that on the other side of the planet,” said Gray.

To help Gray weed out good candidates from the bad, he posted parts of a specs for a software application and asked applicants to do some of the work, offering to pay for only a few hours of their time. Once he found the person he liked, he went ahead and made the hire.

While the employer pays oDesk a 10% fee for the total amount paid for the project, they don’t have to worry about paying the freelancer or creating a contract. oDesk takes care of all of that, alleviating some of the time it takes to hire someone and make sure all the tax forms are in order. Not to mention the headaches from hiring overseas.  Contractors do not pay to be part of oDesk.

“Contractors don’t have to worry about chasing down the buyer and the buyer doesn’t have to worry about the hours getting padded. It’s all verifiable and you get guaranteed work,” said Swart.