New York, Philadelphia and other major metros might be suitable for a corporation’s front office — think sales, marketing and branding. But they rarely work for back-office operations for cost reasons alone. People staffing the accounting, technology support, payroll services, customer service, transaction processing and other functions would rather work in a location where they can enjoy a quality of life unfettered by long commutes and high living costs. Like the Lehigh Valley, just across the river from New Jersey.
That’s where three companies have opened, expanded or consolidated back-office operations in recent months — The Guardian Life Insurance Company of America, Paychex Inc. and Olympus Corporation of the Americas. Coincidence? Only to the extent that high value business services — which include those outsourced to third parties (non-core functions) and those managed internally due to regulatory, technical or strategic requirements — is one of four target sectors identified by Garner Economics as being ideally suited to the Lehigh Valley. The others include manufacturing, food and beverage processing and life sciences research.
“We actively manage our global real estate portfolio, and location strategy plays a big part in picking the right locations,” says Andrew Schwartzberg, Vice President, Enterprise Shared Services, at Guardian Life Insurance. “As we analyzed our Northeast footprint, renewing Guardian’s commitment to the Lehigh Valley in Pennsylvania just made sense. Guardian has a rich history in the Lehigh Valley since the early 1980s and remains committed to the area.”
The insurer opened its new, three-story, 281,680-sq.-ft. building in Hanover Township in July, consolidating operations that had been housed in five buildings in Bethlehem and Allentown.
“Our goal was to bring them all together, in one building, to increase the ability to work collaboratively for the customers’ benefit, and remain competitive in the marketplace,” says Schwartzberg. “Since we already have a significant presence and workforce in the area, we were mindful of their current commute and looked to enhance work-life integration for our employees.”
By late summer, more than 1,400 employees had moved into the new facility, which can accommodate up to 1,800.
10 Years and Growing
Olympus is celebrating its 10-year anniversary in its Center Valley, Pa., headquarters, where it moved in 2006 from its previous digs in Melville, N.Y. It employed about 600 at the time; today nearly 1,000 work in the Lehigh Valley, between the headquarters in the Stabler Business Center, where it is the largest tenant, and the company’s largest distribution center in the Americas, in Breinigsville, Pa., southwest of Allentown. The Lehigh Valley won the headquarters contest after a two-year analysis of 16 major US markets focusing on quality of life, the ability to attract and retain talent, affordable housing and labor costs, distribution logistics and close proximity to four major airports, among other criteria.
In 2016, the same holds true. Olympus, which now specializes in solutions for medical and surgical procedures rather than photographic equipment, “reaps many benefits from the area, including the pool of talent, distribution operations nearby, and benefits for our employees, such as cost of living and quality of life, exceptional and various healthcare options and a community that offers a breadth of recreational and charitable activities,” according to a company spokesperson. Corporate activities in the Lehigh Valley include marketing and customer service, sales support, operations, warehouse and distribution, finance, legal, compliance, human resources and information technology support.
“I know first-hand the benefits of operating a company and distribution center in the Lehigh Valley,” says Nacho Abia, Olympus’ President and CEO. “I have partnered with Lehigh Valley Economic Development Corporation to help share my insights and advice with companies considering an investment in their operations in this area.”
What does he tell them? That Olympus enjoys the benefits of being near New York and Philadelphia, as well as efficient local transportation options enabling the company to locate its primary distribution center for North and South America in the Lehigh Valley. “We have experienced successful growth driven in part by an expanding, skilled employee base thanks to both local talent and the ability to attract candidates to the area based on an attractive cost of living, exceptional healthcare, numerous higher education opportunities and an excellent quality of life,” adds the Olympus spokesperson.
Olympus and Guardian Life Insurance — and Paychex, which is investing $1.3 million to expand its South Whitehall Township facility and add 100 full-time employees — are not done growing in the Lehigh Valley as they staff their new facilities. They are laying the groundwork for additional investment in back-office operations, because it is where those operations will be successful.
“The availability of a deep talent pool and the proximity of local colleges and universities provides us with a guaranteed pipeline of potential talent to join our company,” says Schwartzberg of Guardian Life. “We are currently migrating additional back-office operations to the region. There is growth capacity in the building and the ability to add additional space on the campus if needed. For other investors, we feel they will find what we already know: The Lehigh Valley is not just for manufacturing and industrial operations.”
This Investment Profile was prepared under the auspices of Lehigh Valley Economic Development. For more information, contact LVEDC at (610) 266-6775, or visit www.lehighvalley.org/office.
Mark Arend has been editor in chief of Site Selection magazine since 2001. Prior to joining the editorial staff in 1997, he worked for 10 years in New York City at Wall Street Computer Review, ABA Banking Journal and Global Investment Technology. Mark graduated from the University of Hartford (Conn.) in 1985 and lives near Atlanta, Georgia.