How’s business in Merrimack?

Area businesspeople weigh in on local issues

NH Business Review recently met with area businesspeople at the offices of the Merrimack Chamber of Commerce to get their take on the issues facing the region and its economy.

Participants were:

Tom Boucher, CEO and owner of Great NH restaurants, parent company of T-Bones, CJ’s and Copper Door

Mike Eastman, director of imaging for Derry Imaging

Bill Fyfe, Merrimack branch manager, Digital Federal Credit Union

Karen Keating, acting chair of the board of the Merrimack Chamber of Commerce and business development and commercial loan closer, STS Commercial Loan Closing Services

Tom Monahan, founder, Monahan Companies

Joe Murray, vice president of government relations and public affairs, Fidelity Investments

NHBR: What makes Merrimack such an attractive place for large employers, like Fidelity, Connection and BAE Systems?

Tom Monahan: It’s in a really good location. We’re probably 45 miles from downtown Boston. We’ve got Exit 10 and 11, easy on, easy off. Now the off-ramp to the airport has really made Merrimack even nicer than it has been before.

Another thing is it’s got all the utilities that are required for development, which is really huge, and it’s actually got two water systems — Pennichuck is involved in the town water system but also the Merrimack Village Water District.

I also think that the infrastructure within the community, the town road system, the internal road system is very good. You can get from Exit 10 to out west to 101, and get to north/south very easily.

Joe Murray: We’re also between two of the largest cities in the state — Manchester and Nashua — so for an employee base, you have close to 200,000 residents in those cities. You also have the amenities that come with a larger community. What’s interesting is Merrimack is also a large town of 24,000 to 25,000, so we have associates that live in all three of those locations and their commute to work is a piece of cake.

Karen Keating: Merrimack has such a great community, for all the employers to come in and have their employee base and a good place to live, the housing here is great, the school system is great. As far as recreation, there’s a lot that Parks and Recreation does as well as having the Y right here. There’s a lot to offer people moving into the town, so I think that’s attractive for employers.

Jeff Feingold, editor of NH Business Review

NHBR: Are there any other strengths about the area that you can think of?

Tom Boucher: Obviously Merrimack has more affordable housing, for sure. That’s clearly an advantage over a place like Bedford.

Bill Fyfe: I recently moved from western Massachusetts to Hollis, NH, and what you can find over the border, even though it’s seven or eight miles from where I used to live, has significant value as compared to Massachusetts.

Boucher: One of the challenges that I think the whole state has, particularly in southern New Hampshire, is affordable workforce housing. There there’s a little bit of a misnomer that workforce housing is for people that make under $45,000 a year. It’s the same exact apartment as someone who makes $100,000 a year — it’s not Section 8 housing, and sometimes people get that confused.

And the fact that if people want the services that towns like Merrimack and Bedford offer, they need to have employees that can afford to live where they work.

Look at all the shops at the Premium Outlets — a lot of these people, they’re not making $100,000 a year, and they need an affordable place to live and a quality place to live. I think there needs to be a little more education to the public about what housing needs are out there for people that are either younger or just getting started.

Murray: The issue is housing affordability, and like Tom was saying, any community should allow its teachers, its public safety officials and others who may find it harder to afford a home to be able to live in the town that they serve in if they choose. As we look at a place like Fidelity with this range of people, from entry-level customer service associates to world-class portfolio managers — the same holds true for our employees.

Monahan: I have had the good fortune to build some workforce housing in southern New Hampshire. We were the first to do it in Bedford and the first to do it in Londonderry. The way we could make it work was to increase density. In Londonderry, we had a parcel of land that was only for 120 apartments and we built 240 apartments. It’s more dense, but you could walk in any apartment and you wouldn’t know which ones are workforce housing and which are market rate. In Bedford, we increased the density by 30 percent — it worked well.

NHBR: What about workforce?

Keating: Through the chamber, we have employers that are looking for manufacturing employees and they’re having a difficult time. They’ve asked us to post on our website the openings that they have and we actually have someone from the Department of Employment Security coming here to talk about the resources they have. They actually have a program that will pay an employer so much of their pay for a certain number of weeks, so there’s a lot that they have to offer and that will be good for people who are having a hard time finding employees.

Joe Murray, vice president of government relations and public affairs at Fidelity Investments

Murray: We’re constantly working to improve our recruiting. This is a challenging time for employees. We hear it all the time — whether it’s certain chambers or the Business and Industry Association — there’s a lot of really great work that’s going on compared to 10 years ago where it’s a nonpartisan issue and people that are really reading from the same playbook.

The last thing I’ll mention on that is the importance of internships. For the past three years, we’ve averaged somewhere between 125 and 150 paid internships just in Merrimack. These are mostly college interns, but across the enterprise in terms of financial services, technology, even HR and communications, things like that. That is one of our best tools that can expose them to what it’s like to work at this company and get them even before they graduate. We’re all much better off.

Fyfe: Globally, between our call center and 22 branches, there are 30 open positions. I’ve had five open positions at my branch in Merrimack. Teller and MSR (member service rep) positions, which are entry-level. I almost never get candidates with experience, so what I’m looking for when I’m hiring is someone with decent interpersonal skills and computer skills and I can teach them the banking aspect. But it’s been a struggle to hire entry-level positions.

Boucher: In our business, it’s entry-level positions as well, mostly kitchen help is the toughest for us to find because we’re competing with retail, grocery stores, Starbucks. I see Whole Foods advertising $14 an hour for a night janitor.

Bill Fyfe, Merrimack branch manager at Digital Federal Credit Union

But we actually got ahead of it. Last year, we made a conscious decision to raise our hiring wage to $11 an hour, and we’re probably going to go to $12 next year. At our three most southern stores — Hudson T-Bones, Salem T-Bones and the Salem Copper Door — there’s huge wage pressure increase because it’s so close to Massachusetts. The other thing we did is we gave every single manager a minimum of a 10 percent raise this year, plus whatever the “earn” for their performance was. We’re ahead of it and it’s costing us some labor dollars, but it’s the environment we’re running.

Mike Eastman: We run into the same thing with wage issues with the border. I have a limited pool for my higher-earning employees — our ultrasound techs, nurses, CAT scan techs, MRI techs. I get people who are coming up from Massachusetts and they’re looking for $10 or more an hour different from what our range is. They live in northern Massachusetts and have been commuting into Boston and they’re used to the Boston pay. Now they’re going in the other direction, but they’re still looking for that $10 an hour that would be missing in their paycheck.

NHBR: Another concern that has been mentioned at other similar NHBR roundtables is the aging population of New Hampshire.

Boucher: It’s a very big concern. We’re the second-oldest state in the country, and it won’t be long until we’re probably tied. One of the things that we have consciously done is have a commissary building in Manchester, producing more of our made-from-scratch items because it’s a lot easier for us to have one person making 50 gallons of chicken pot pie than having them made individually, so there are some economies of scale there. We just see it’s going to be more challenging to find young people to stay in this state. Manchester’s doing a good job — they’re making their downtown a little bit more vibrant and building nice apartments. It’s going to be a challenge for this state, for sure.

Murray: We have a program that is called Resume, and it’s actually an internship program for people who are returning to the workforce after a significant break in time. It might be a mother or father who was at home raising children. It’s designed to ease the pathway back into the workforce. That’s one of the tools that we use to try and deal with that challenge.

Tom Boucher, CEO of Great NH Restaurants

Eastman: Definitely the workforce has changed, and it’s forced us to look at our employees differently, and when we were talking retention, we have to take different strategies because millennial workers are a different type of worker and different things matter to them than some of our older workers.

We’ve done some work with recognition surveys. We’ve surveyed our employees to find out what things interest them, so when we do employee recognition, we tailor it to be something that’s important to the employee.

If we have a contest or some sort of promotion and I want to award them a Dunkin’ Donuts gift card but they don’t drink coffee, there’s no reward in that. So we’ve really done a lot of work lately with trying to look at what’s really important to our employees to bring more value to the things we’re trying to do to help retain them and keep them engaged.

Boucher: We adopted a very similar concept where 80 percent of our employees are between the ages of 25 and 35. We own Celtics, Bruins and Red Sox season tickets, and we give them away either through contests or we built this Facebook private group — “Staff Matters,” and there are 481 members on there — not bad out of 650 employees.

I’ll give you a concrete example, and this came from a young person in our office: She works in the marketing department, and we had a suite to see Disney on Ice and she said, “Why don’t we do a contest to see who sells the most gift cards next week, and whoever has a percentage up from last year, we’ll give it to that person because there’s a lot of moms that would like to take their kids to Disney on Ice?” I never would have thought of that. That’s the kind of stuff that works. People really love that, and it’s something a lot of restaurant groups do, too.

NHBR: How about transportation — what about the state of infrastructure itself?

Monahan: I think we’re doing alright down in the southern tier. My pet peeve is the Exit 10 tollbooth. I’m sure some other folks sitting at the table would like to see those removed and at Exit 11. Merrimack pays more than its fair share for highway transportation into the state.

Certainly, understanding years ago that’s the deal that was made — Industrial Drive was built and the deal was, we’re putting a toll at Exit 10. Industrial Drive has long been paid for, for many years.

But all in all, I think the infrastructure is pretty good. Do I think that the transit system’s good in Merrimack? No. I think that the town could do better. I know at the outlets, I’ve had the city of Nashua come to me and say they’d like to put a bus stop at the outlets. The outlets have actually said they don’t want it, but I’m still sitting on the fence — haven’t decided which way we’ll go. With respect to transit vehicles, the town of Merrimack and southern New Hampshire could do better and that’s not even talking about the trains.

Tom Monahan, founder of Monahan Companies

NHBR: What about trains?

Monahan: We need it. It’s as simple as that. I think we need it to go to Concord. The argument is to get it to Nashua or Manchester, but let’s get it to Concord and it’ll open up the capital. This is my crazy opinion. I also think that we should have the opportunity to cross the river on occasion with it. I’m a firm believer in the rail system.

Murray: Fidelity and our regional leadership team has told us that it should certainly be properly vetted and the decision to not accept federal money to do that vetting just didn’t seem like good public policy to us. So let’s figure out if it’s viable and affordable, how much it costs and get all that information, like any business would do, and then make a decision from there.

Keating: I support trains coming up and I think Concord would be good, but I think the major areas that need it are all the way up to Manchester because there is workforce that does go down to Massachusetts every day that lives in New Hampshire, and vice versa. I think having that would ease traffic but also it would reduce the need for all this expansion on the highways.

Monahan: We’ve got two buildings in Exeter with some pretty good-sized tenants, and one of the reasons we did was because of the train system, the Downeaster. Interestingly enough, some of the businesses that are tenants have made a deal with the state of Massachusetts. It’s a two-part deal that the state pays the train ride for the employees to come up to work, meaning Massachusetts pays their residents to come up and work in New Hampshire into the Exeter area. It’s not all the time, just during the holiday season. It’s an interesting scenario.

But the fact that the train is there —that’s really been a boon for us in Exeter. It’s very important. Although to Joe’s point, I think if they did the math, it would never be there because I’m not so sure it works at the end of the day. There was a shortfall this last year. That’s an issue.

NHBR: Another thing: What are the concerns about the PFOA/PFAS water contamination issue and how is it perceived in Merrimack?

Keating: I don’t live in Merrimack, but I wouldn’t be happy if my water had been contaminated, and I do think that Saint-Gobain has been working with the town and with Pennichuck to get residences connected. Water is every home’s greatest resource — you need to feel that it’s safe to drink and wash in.

Monahan: We’re in south Merrimack, and one of the big issues in the north is the wells. We haven’t been affected. One of the really good things is that we at Exit 10 have Pennichuck water right there. What’s more important than the water? That’s the life blood.

NHBR: Are there other concerns from your perspective?

Eastman: Definitely healthcare — the rise in the cost of healthcare, insurance premiums, deductibles, co-insurances. We’re seeing an increase on all levels and really what needs to happen is, as employers, companies need to look at ways to reduce those premium costs, looking at alternatives to the way things have been done.

Mike Eastman, director of imaging at Derry Imaging

For instance, we provide the same quality images compared to a hospital at 40 to 70 percent less. If we spend less on healthcare, then those premiums go down. Companies then use that to reduce future premium costs so they can refund it back to their employees.

We’re seeing a great surge in the size of the deductibles. There are so many plans now, with $4,000, $5,000, $6,000 deductibles per individual, $12,000 to $15,000 for a family. It’s not that the premium prices have come down, so you’re paying a whole lot less per week out of your paycheck because you’re paying that high deductible. It’s still expensive in your paycheck and you’re still faced with this higher deductible.

Boucher: I was on a panel talking about health insurance and, in particular, the health insurance tax. It’s on hold right now but its scheduled to play out in 2020 where insurers will be charged a $488 per person tax and the insurance will forward it to the employers. So that’s about $100,000 a year for us.

Senator Shaheen signed on to continue to delay it — basically it’s the same old thing: kick the can down the road, it doesn’t mean it goes away.

Internally what we do, we offer health reimbursement accounts. It’s a good retention tool for us because we allow them, if they’re healthy and they just get their annual physical and get the $2,000, they can roll it over for the next year, and then if they’re healthy again next year, they get $4,000, so they can keep growing that up to $10,000. And if they leave the company, they forfeit it. So it’s a good retention tool in regard to that.

But I will tell it is one of the most daunting tasks that I have to do every year, to sit down with our broker and just wait to hear what the number is. We’ve been pretty fortunate in the last four years, with the exception of last year — we had a 22.2 percent increase. Three years ago we were paying $800,000 in premiums. This year we’re going to pay $1.1 million. How do you budget for that? You don’t because you don’t know how many claims your employees are going to have.

Karen Keating, business development and commercial loan closer at STS Commercial Loan Closing Services

Keating: I worked for one company that put half of your deductible into an HSA for you and then they also put that same amount into an HRA that was only used if you went over your deductible. So basically, I had no out-of-pocket expenses, and it was lower-cost to them because of the fact that not everybody uses that HRA and the HSA and there are tax benefits.

Eastman: As employers, we have to encourage employees to take advantage of HRAs, HSAs and other cost-saving tools. Depending on what insurance carrier you go with, some of them offer discount programs. It doesn’t take away the choice of where you want to go, so you could still choose.

But some insurers will give you an additional $250 if you choose a low-cost provider because it’s saving them on the claim as well, which results in lower premiums.

NHBR: How do you see things going from your perspective a couple of years down the road?

Fyfe: I see over the last few years our members in a better financial state. They’ve recovered from the recession, more are located in households, and their credit is being repaired and rebuilt from the effects of the economy. We see the improvement, and I don’t anticipate that changing in the near future. I see an upward trend, so I’m very optimistic.

Boucher: Similarly, I feel if you take what’s going on in Londonderry with the development there and what Salem’s doing and Joe Faro, there’s a lot of residential being built and other businesses, but that’s going to continue to bring Massachusetts people here because it’s more affordable. That’s just the way it is. I don’t mean to get political, but nothing’s going to get done over the next two years because it’s a split Congress, so nothing changes. So there’s some certainty, which I feel good about looking up two years from now.

Monahan: I think there’s going to be some nice activity going on. We’ll be focusing on Merrimack and the Seacoast in the Exeter area, but also some in Hudson at Exit 2. We look at the location where we are going and the infrastructure that we have and again, similarly, where we are located on the map. We get to take advantage of our good friends 40 miles south of us. We are in the path of progress. My plan is to stay the course and keep going.

Murray: The economy is cyclical. It’s inevitable that things go up and down, and we’ve enjoyed a great ride. From Fidelity’s perspective, we’ve had a terrific year, and then kind of zooming in to Merrimack, we’re already investing significantly in our campus to upgrade and make our spaces more for collaboration between business units, a more open place. The days of endless rows of cubes are quickly fading away. So that’s a real neat thing to see. Another thing is we’re in the process of building a 12-acre solar farm on our property that will power a portion of one of our two buildings. As we look at those other issues employers care deeply about is the cost of and reliability of our energy infrastructure, but that’s good news for employees and the environment.

Eastman: I’m encouraged by the amount of growth that I see. I live in Wakefield, and on my side of the state, there’s a lot of development. And there’s a lot of economic development going on here, residential development. I think we’ll see more people moving up from Massachusetts.

Keating: I feel pretty optimistic about the next couple of years. I think the growth is going to start slowing as far as the building. I don’t think it will stop, but I think it will kind of flatten out a little bit.

Until people get used to the increases in the interest rates because they do say that they are going to start a little more aggressively raising those rates, which is going to make a difference when it comes to housing, and even just commercial building, it’s going to make a difference, so I think you might see it level off.