Written by Joshua Baum, Senior Associate at RSM Canada - an AC partner.
As the tech industry continues to grow at an unprecedented rate, it is depleting a key resource: talent. The dissolution of geographical boundaries resulting from the shift to remote work has made it easy for top talent to leave Canada. Early-stage Canadian tech companies simply can’t compete against their U.S. counterparts when it comes to salaries. Many large tech companies such as Microsoft and Amazon are expanding operations in Canada, further increasing demand on a dwindling supply of trained tech professionals. Hiring in 2022 can sometimes feel like reverse arbitrage.
Despite this, Canadian tech has an incredible amount to offer. Early-stage companies can use the context of their size and position within the tech lifecycle as an advantage. Here are four key strategies Canadian tech companies can employ to compete for talent.
1) Highlight the employee’s role in the organization and opportunity for personal growth
Working at a company that is small and nimble can have a significant upside to employees. Without the large, rigid reporting lines common in larger organizations, employees can participate in roles that they may not otherwise get to experience. They can wear many hats and as a result, grow professionally and gain a more holistic business experience. Lower headcount also means that there is less distance between executive management and employees. It is important to communicate the upside to being a part of a tightknit team and benefitting from the mentorship of accomplished senior professionals.
Smaller companies also have more flexibility to differentiate on culture. Startups are less restricted on spending and can treat their employees to unique benefits. Differentiating on perks is a great way that companies can demonstrate an attractive lifestyle and positive environment.
Finally, given startups’ potential for significant organizational growth, it is important to communicate to early employees the opportunities for rapid advancement within the company.
2) Communicate the financial upside through stock options and growth trajectory
Working for a large organization typically means strong, consistent income, with a lower ceiling. Early-stage companies pursuing outsized organizational growth also bring the opportunity for much higher earnings potential. It is therefore critical to sell the future trajectory of the company. Individuals will often be more willing to accept lower pay if they believe in the probability of future rewards.
Outsized gains can be communicated through committing to increasing salaries in line with future funding rounds, as well as offering stock option incentives vesting over time.
3) Ability to contribute to meaningful work
A common issue for employees at larger, more rigid organizations is the feeling of being a cog in a machine. By inspiring potential employees with the company’s vision and having them buy into a mission greater than the current job description, the job can ascend from day-to-day tasks to a greater purpose. This non-financial gain can have outsized impacts on an individual’s desire to work at a given company.
4) Targeting the right individuals
With all the pressure to hire in a challenging environment, it is important to not lose sight of the quality component. Hiring the wrong person can be more expensive than not hiring at all. Furthermore, the time invested pursuing individuals who were never the right fit can also hinder recruitment by tying up key resources.
Establishing best practices and seeking professional recruiting expertise are the best ways for companies to ensure they remain efficient. Recruiting professionals add value by screening, with the use of advanced methods such as behavioral interview strategies. Earlier stage tech companies have an elevated degree of risk and reward, and it is therefore critical to ensure that individuals have the right mindset and risk appetite. There can be many external influences and internal values that can stop someone from joining a growing early-stage companies, and it is critical to screen them out upfront.
While local talent is increasingly looking abroad, Canadian companies can also look abroad in areas such as Brazil, India, and Eastern Europe for talent. In addition to remote work opportunities, there are many offshore employees looking for a way to come to Canada. The relative ease in which foreign employees can immigrate to Canada for work combined with a strong national brand is a competitive advantage which should be exploited.
With the tight market for talent not expected to ease up in the foreseeable future, it is more important than ever to be deliberate with hiring. Through properly articulating their value proposition and using the right toolset, early-stage technology companies have a lot to offer. Now is the time to put these strategies into action.
Interested in discussing talent acquisition further? Reach out to the RSM team to start a conversation about your talent related needs.