Business Services Providers Find Lehigh Valley a Cost-Effective Location
By Colin McEvoy on January 12, 2017
This story first appeared in the third issue of the Lehigh Valley Economic Development magazine, a publication developed by LVEDC and Journal Communications. This magazine highlights the region’s competitive advantages for targeted sectors, as well as providing an overview of the region’s business climate, livability, transportation infrastructure, and other economic assets.
Nationally known providers of high-value business services like Paychex Inc., as well as international companies including Nihon Kohden, are choosing the Lehigh Valley as the ideal location for their growing operations.
They are attracted by an unbeatable combination of advantages, including a high quality of life that makes it easy to find and keep skilled workers and a central location that is a short drive from Philadelphia and New York without big-city prices.
A well-developed transportation infrastructure, excellent health care services and the availability of suitable office space are other assets that make the Lehigh Valley irresistible for companies in the high-value business services sector, including back office operations such as data processing and hosting, payroll services and financial services.
For Paychex, the region’s skilled workforce was a major factor in its decision to expand in Lehigh Valley. The company provides integrated capital management solutions for payroll, HR, retirement and insurance services for small and mid-sized businesses. It has more than 600,000 clients across the United States.
“We have found that there is a strong talent base in the Lehigh Valley market that is well suited for the technical and service skills we need to serve our clients,” says John Gibson, senior vice president of service.
Paychex invested $1.3 million in the expansion, which doubled the size of its South Whitehall Township facility. The company now occupies 36,000 square feet. Employment will more than double. Paychex, which had 95 employees at its Lehigh Valley location, expects that number to reach 225, says Gibson.
Low Office Vacancy
Paychex’s expansion is another signal of the growing strength of the region’s office real estate market. The company expanded into space vacated by financial services company Morgan Stanley.
Morgan Stanley moved from South Whitehall Township to a new location in downtown Allentown’s Neighborhood Improvement Zone tax district. Paychex’s expansion into Morgan Stanley’s previous space is an example of why the Lehigh Valley’s office vacancy rate was around 9.4 percent in the second quarter of 2016, well below the national average of 13.0 percent.
For Nihon Kohden, a Japanese precision medical products and services provider with subsidiaries in the United States, Europe and Asia, Allentown is the ideal location to expand its U.S. operations and create at least 27 new high-paying jobs over several years. The project also enables the company to retain 11 current positions.
Nihon Kohden America’s 7,000-square-foot facility in Allentown provides technical and product call center support to key installations along the East Coast and supports biomedical training classes for consumers.
“Initially our new Allentown facility will serve as a second U.S. technical support call center, increasing access to our knowledgeable support staff, and in the future we will have the ability to add other functions as customer needs dictate,” says Dr. Wilson P. Constantine, CEO of Nihon Kohden America.
Guardian Life Insurance is another example of the Lehigh Valley’s growing high-value business services sector. The company chose to consolidate its operations, including 1,500 workers, into a regional headquarters on a 31-acre site in Hanover Township. The 281,000- square-foot building brings together operations that were spread over several offices in Bethlehem and Allentown.
The company is one of the nation’s largest mutual life insurers and a leading provider of employee benefits.
The new facility, developed in consultation with the employees who work there, is part of Guardian’s strategy to enhance work-life integration, increase collaboration and remain competitive. The design includes a town hall space, walk-up technology support center, walking trail and a fitness center. Pantries on every floor are included as part of the design.
The new workspace is a central part of Guardian’s sustainability strategy. The space will meet the latest standards for energy efficiency and LEED certification.
The design is intended to create a brighter, more open work environment that promotes greater collaboration and productivity among employees while addressing their feelings about where and how they work.
“Guardian continues to focus on attracting and retaining the best local talent, enhancing diversity and inclusion, promoting employee wellness and finding ways to work more effectively as individuals and as teams to best serve our clients,” says Scott Dolfi, the company’s chief operating officer.
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