Nashua software firm packs up, moves south

As New Hampshire continues its efforts to lure Massachusetts businesses north of the border, one local company has done just the opposite.

Nashua software company Kadient packed up and moved its 60 employees to Lowell, Mass., last weekend to take better advantage of the Boston-area work force, the company announced Tuesday. “We did it all of a sudden. We packed up on Thursday. We worked remotely on Friday,” Chief Executive Officer Brian Zanghi said. “It’s a mess here, but the phones are working.”

Tuesday was the first full day of work in Lowell, but Kadient has been considering a move out of Nashua for about a year and a half.

Zanghi said the company does a lot of recruiting from Greater Boston, but has had trouble convincing recent college graduates and interns to drive over the border to work in New Hampshire.

“A lot of the students wanted to be closer to an urban environment,” he said. “Trying to convince that person to drive up to Nashua . . . it was more of a challenge.”

The news is particularly disappointing for Nashua because the city has a reputation as the state’s high-tech hub – a place with a highly skilled and educated pool of workers.

However, it’s no secret that the state is losing young people and recent college graduates at an alarming rate in favor of more metropolitan areas or regions with a lower cost of living – a phenomenon known as “brain drain.”

Although Lowell is only about a 15-minutes south down Route 3, Zanghi said the company believes the move will be enough to make a difference in recruiting. The company decided against moving even closer to Boston because about half of the employees live in New Hampshire, he said.

Despite the move, Zanghi said the company was able to retain most of its New Hampshire employees.

Until Tuesday, state officials in the midst of an aggressive and unconventional campaign to swipe businesses from Massachusetts by touting the state’s perks during all-expenses-paid tours were unaware of Kadient’s move.

“We didn’t hear about it,” Michael Bergeron, business development manager for the Department of Resources and Economic Development, said. “I think if we’d had a chance to make a presentation and provide more research to them, we could have changed their minds.”

In November, DRED announced an open invitation to wine and dine Massachusetts business owners willing to consider relocation. They would be picked up at the border in a limo, whisked away to lunch and offered hockey or skiing tickets and a night’s stay in an upscale Nashua hotel. Over lunch, a business recruiter would pitch New Hampshire’s perks before taking the business owner to visit potential relocation sites.

So far, one company has visited and another is scheduled to come this month. Two others have shown interest.

Bergeron agreed that many 20- to 25-year-olds prefer living in downtown Boston to the suburbs of New Hampshire, but he said other local companies have had success recruiting young people willing to commute north for work.

“Fidelity has been successful in recruiting to that age group,” he said, referring to the investment company’s Merrimack campus. “It’s hard to believe that a 15-minute difference is such a big deal for this company when it’s not for other New Hampshire companies.”

Bergeron said any company’s decision to leave New Hampshire is usually influenced by more than one factor.

Indeed, Zanghi said Kadient was also unhappy with its building space at 15 Trafalgar Square. He joined the company four years ago and inherited a five-year lease.

It was a traditional building on two different floors that wasn’t really a “collaborative” workspace, Zanghi said. The new office is an old mill building with lots of open space, he said.

Kadient essentially “rents” software to sales and marketing teams at large companies. Customers can pay monthly subscriptions for use of the software instead of paying a big expense to buy it up front.

The company was created in 1995 by an Amherst couple under the name Pragmatech Software, but changed its name in 2007 after launching a second product – software designed to boost sales team revenue by providing better interactions between companies and prospective customers.

The original product is bid and proposal software.

Zanghi said Kadient, at one point, considered staying in the city but moving right next to the border off Exit 1 on the F.E. Everett Turnpike. Plans are in the works to transform land there into a major regional technology park. But the plans were not far enough along to support a move there, he said.