'An enormous hiring challenge': Canadian tech companies face U.S. hiring spree

TORONTO — Jack Newton has big plans for the next two years.

His Burnaby, B.C. legal technology company Clio is generating so much business to add 250 staff to the 600-person workforce by the end of the year and in 2022, he hopes to be employing at least 1,000 people.

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But there's some big obstacles standing in the way of that goal.

With COVID-19 generating demand for e-commerce and other digital business practices, many tech companies have been scrambling to staff up. With many offices temporarily closed due to pandemic restrictions, these comanies are looking further afield for talented people who can work remotely.

That's caused foreign tech giants to eye Canadians at a dizzying pace and triggered plenty of competition for home-grown companies like Clio.

"We've got an enormous hiring challenge ahead of us," said Newton, who co-founded the company in 2008.

"With the tech boom that's been happening in Canada, the U.S. and worldwide, the demand for tech talent is higher than it's ever been...The hiring landscape has dramatically changed for Canada virtually overnight."

Microsoft, DoorDash, Amazon, Google, Wayfair, Twitter, Pinterest, Reddit and Netflix all announced Canadian hiring plans this year. Many will place workers in technical or engineering roles and some are also opening new offices or innovation centres to house them.

Canada's own tech giants are in the mix, too. Ottawa-based Shopify Inc. rang in the year with the goal of hiring 2,021 technical staff by the end of 2021 and Wattpad Corp. will add 100 workers in Halifax and Toronto.

Brendan King, who started Saskatoon software company Vendasta in 2008, is no stranger to the challenge of hiring for these roles.

"We're getting a bunch of folks out of university but we still can't keep up with engineering talent and product talent," he said.

"We need to hire folks who ... have been there, done that and can share their experience, or we need to train them and that's a really slow, long process."

Keeping talent at home is tough. Canada has long grappled with the "brain drain," where people educated here flock south of the border for jobs, whether for financial or lifestyle reasons.

A 2018 study based on LinkedIn profiles of graduates from the Universities of Toronto, British Columbia and Waterloo in 2015 and 2016 revealed 66 per cent of software engineering and 30 per cent of computer science students were leaving Canada for work after graduation.

The study's U of T and Brock University researchers found students moved because they felt a big employer would boost their future hiring prospects, their scope of work would be larger and they were promised higher salaries.

Hired, an employment platform publishing average annual salaries, said Toronto tech workers earned an average of $109,000 a year in 2020, up 10 per cent from 2019.

The average tech worker salary in the U.S. that year was roughly $177,463 and the global average amounted to $158,015.

With 527 staff, King's been lucky to recruit hires many smaller businesses can't afford, but even Vendasta isn't immune to the effects of the pandemic.

"We've lost some people who decided to go work for other companies remotely, but we've also got a couple of people from Amazon," he said.

Prior to COVID-19, Vendasta attended hiring fairs in Toronto and Vancouver, where big-name companies loomed large.

King would invite prospective hires to a restaurant to pitch the merits of Saskatchewan, but often found candidates were already prepared to move because the province is home to affordable housing and shorter commutes and the scope of work at Vendasta is large.

"It's not all about location for people, or money," said King. "It's a lot about the kind of work you're doing. Is it fulfilling?"

Caitlin MacGregor feels similarly.

Her Waterloo, Ont.-based company, Plum, helps businesses use artificial intelligence to hire and retain talent, but when adding to its own team, co-founder and chief executive MacGregor prefers to highlight unconventional perks.

For example, Plum offered Friday afternoons off during the pandemic to boost mental health and give staff time to spend with family or on hobbies.

"Knowing that they're not burnt out at Plum, that they're supported and we are going above and beyond ends up being really good to counteract those higher offers," MacGregor said.

She also puts Plum's own software to work. Rather than targeting high-profile candidates everyone else wants, MacGregor uses Plum to identify people with transferable skills or who are likely to excel in specific roles.

"We've been able to tap into talent that hasn't necessarily had that perfect track record yet and really hire for potential," she said.

"We often are seeing people that those U.S. competitors aren't even looking at."

Meanwhile, Clio has adopted the same strategy as U.S. competitors by advertising for remote work positions and looking farther afield for talent.

Clio will be open to new hires in cities where it has no footprint, but keep its Vancouver, Toronto, Calgary and Dublin spaces as collaboration hubs and for people who prefer an office.

If new hires are in regions with "talent density," Clio will consider opening hubs there too.

Newton hopes this flexibility will be attractive to workers and prove how bold Clio is.

"There's an opportunity here for Canadian companies and a need for Canadian companies to step up their game in a big way and compete at this global level," he said.

"Canadian companies...should be looking at (this) as the kind of opportunity that comes along once every few decades, if you're lucky."

This report by The Canadian Press was first published May 21, 2021

Companies in this story: (TSX:SHOP)

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