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I've had some good off-shore people and some not so good, and a few piss-poor. It's very much a luck-of-the-draw deal. But, that said, I've had roughly the same spread with on-shore hires, so I no longer care either way. I still dislike the timezone difference, and the communication hassles sometimes, but that stuff can be overcome.
Ok, time to eat some humble pie. I seem to remember ranting about the fact we were going to use an offshore dev house a while back, and I'd convinced myself they were going to be absolutely useless.
Far from it. It's certainly meant I've had something else to do in managing them, and I can't say everything has been completely rosy - but overall, they're a bunch of hard working, decent devs who write good, well-tested code, are receptive to feedback in code reviews and take the initiative and ask questions when they need to. Shame on me for initially thinking otherwise - I'll miss working with them when I leave this place.
rant