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- Offshoring

by Lisa A. Bacon
Virginia Business
May 2004

MUMBAI, India - Around 9:30 on a Tuesday morning, Gauri Niar escapes the sweltering heat as she enters her air-conditioned office on Bank Street. It’s on one of the few tree-shaded roads in the Old Custom House district of this bustling city — formerly known as Bombay — where temperatures this time of year routinely hover in the high 90s. As the India-based director of In-net India Private Limited, the sari-clad Niar oversees medical billing services for New Jersey-based ClaimPower Inc.

Although the building houses attorneys’ offices as well, In-net India seems to have the nicest accommodations. Handsome wood paneling and modern office furniture create a feeling of new-age progress in a land where cows, still viewed by many as sacred animals, roam the streets. Other accommodations made for comfort included dropping high ceilings so four window air-conditioning units could be installed. The small 550-square-foot office is carved into a half-dozen smaller offices, most housing computers used by data entry clerks.

ClaimPower’s owner, Indian-born Rajeev Thadani says comfortable surroundings are just good business. “If you treat your employees well, they are more productive,” he says from his Fairlawn, N.J. office. Not only are working conditions superior to most commercial Indian concerns, salaries are better, too. Thadani’s 35 Mumbai employees earn monthly salaries ranging from $133 to $663 per month, a kingly sum in a country where a decent, air-conditioned hotel room can be had for as little as $20 per night

As more and more American companies outsource service jobs to cheaper labor markets, India has become one of the world’s fastest-growing economies. In the last quarter of 2003 alone, the economy grew more than 10 percent.
Finding workers here is easy. Although turnover at her company is low, Niar says when jobs do come open, there’s no need to advertise. Niar simply asks her workers for leads. “I ask employees if they know someone who would be good.” Niar prefers college graduates who can grow into the job and advance their own careers while advancing the company. “Government work here offers job security,” says Niar, “but this offers growth.”

Though most of the younger employees tend to dress in jeans or fashionable western attire, many of the women wear traditional Indian dress. “There is no dress code,” says Niar. “We simply expect everyone to look decent.”
ClaimPower opened its Mumbai location in 2001, after Thadani decided to expand his business by using Indian labor to help file insurance claims. By undercutting American firms in service costs, Thadani says, he can pass along savings to his company’s clients. Up to now those clients were mostly medical practices in New Jersey, but since ClaimPower was mentioned in an article in The Wall Street Journal Thadani says clients from other states, including Virginia, have expressed interest in hiring his firm.

“Rates for medical billing in the U.S. range from 7 to 12 percent commission on the amount collected from insurers,” he says. “Our rates range from 4.5 percent to 6 percent.” Furthermore, his India staffers are spread over a fifteen-hour day. So with the ten-and-a-half hour time difference, his evening employees — who work from 4 or 6 p.m. until 1 a.m. — are toiling while America sleeps. “All the work sent to us today will be done before our clients come to work,” he says. “The data will be in their offices when they arrive in the morning.”

Return to Virginia Business - May 2004