Vanocouver tech firms offer benefits to attract tech workers

As Vancouver tries to be a base for new tech start-ups it has found that it needs to offer bonuses of various types to attract workers to the city where living costs are high. While Vancouver has already established itself as the cheapest place among fifty markets in North America to establish a new tech start-up, companies in Vancouver realize that to be successful they must attract top tech talent.

The growth of the tech sector in Vancouver is being helped by the fact that large multinationals such as Amazon and Microsoft have recently opened offices in Vancouver. At the same time, Canadian startups such as Hootsuite have begun to obtain international status. Vancouver's high cost of living and the low value of the Canadian loonie relative to the US dollar are two drawbacks that Vancouver has to counter. However, the situation is even worse in some prime high-tech areas such as Silicon Valley in the United States which is notorious for the high cost of living in the Bay area. An employee in the area notes: “I didn’t become a software engineer to be trying to make ends meet,” said a Twitter employee in his early 40s who earns a base salary of $160,000. It is, he added, a “pretty bad” income for raising a family in the Bay Area." Bill Tam CEO of the BC Tech Association said that the growth of the industry has left companies to fiercely compete to hire workers. The Association issued a report estimating that by 2021 there will be an estimated 35,000 jobs needing to be filled in BC in the tech industry. The competition has led companies to offer enticements such as vacation cash and luxury cars to hire prospective employees. Tam said that demand for workers was by far exceeding supply. Tam said that he has heard of companies offering flexible work hours, unlimited vacation, and even one company that offered a downpayment on a new Tesla car. Tam said: "Tech companies by design are trying to be innovative in all aspects of what they're doing. So the way in which they structure their businesses and the culture they try to adopt is very much consistent with that philosophy."

One company, RingPartner, has cut hours per day worked to just five hours in an attempt to lure employees. The thirty employees of RingPartner report to the office between 10 a.m. and 3 p.m. Monday to Friday. Where they do the rest of their work is up to them. They can spend the afternoon at the beach and log on to their computers in the evening. Many parents appreciate the arrangement as they can spend more time with their family. However, some people prefer the traditional eight-hour day at the office and do exactly that. RingPartner notes that since they introduced their new policies sick days have actually decreased by a significant ten percent. Their revenue and profitability has also increased.

Leslie Collin, director of people and culture at Unbounce said that benefits not only are a recruiting tool but reflect a company's culture. The Vancouver-based company gives each of 190 employees four weeks of paid vacation, plus $1,000 for taking time off. Collin said that the vacation bonus allows workers "to go on a new adventure and support their life goals as well as their career goals." She said that rest helped employees to be able to come up with fresh ideas and more creativity and that this helped the company be successful.

Study shows that tech students may be going to US rather than staying in Canada

A study by two students at the University of Waterloo shows that in the fast growing tech market many tech graduates are deciding to go to the US rather than stay in Canada.

Atef Chaudary and Joey Loi are graduates of the Systems Design Engineering(SYDE) program at the University of Waterloo in Ontario. The small study of 82 graduating students to which 77 replied showed that many in the program went straight to the US rather than stay in Canada. This appears to show a brain drain from Canada at least in the tech area. However, the two who did the study warned against its being extrapolated. Yet the study does give at least some evidence for a potential brain drain in the restricted area of technology graduates.

The tech area is the fastest growing market in North America and so there is fierce competition for graduates. Each student in the SYDE program had to take six co-ops in which they were required to work for companies to obtain experience. These co-op experiences are what drove many graduates to decide to work in the US. By the end of the term fully 40 percent of the students did co-op work in the US. Students working in the Waterloo area started out at 30 percent but declined ever since. Toronto jobs also fell precipitously from 70 percent to 30 percent. As their skills increased, it would seem that students found better co-op positions outside the country..

The reason for the migration south is that the US jobs pay better among other pluses. In advising Canadian companies how to compete Loi said: “Co-op replicates a realistic job search process. Make the internships in Toronto or other areas more enticing. One of the ways to do so is matching pay. We need it for tuition and also almost as a status symbol.” Average hourly pay for a US co-op job was $49.40 an hour. In contrast, the average pay on co-op jobs in Canada was only $25.40 per hour. Obviously, US pay is much superior. Fully six out of ten students who had a full time job at the time of graduation were working for a company that they had done a co-op with. Many students want to migrate to places such as San Francisco and Seattle where there are large innovative companies such as Tesla, Apple and others who are innovative and are attractive to new grads.

Loi said: “There’s a mentorship aspect. The perception exists that if you go to these bigger companies you’re going to get exposure to better people to network and get more opportunities for you, which is not the same for Canadian companies. If there were more high profile hires in Canada, engineers or others coming from the valley that would an attracting point.”

Obviously, if the Canadian tech companies are going to hire top people from Silicon valley in the US it would need both to up salaries and provide special incentives to lure them away. Neither may be practical. The least Canadian companies could do is to compete on the salary level. No doubt many would prefer to stay in Canada if the salaries came close to matching those provided in the United States. It may be that Canada is able to attract more from overseas as the political situation in the US appears threatening to some tech students from some countries. This may help Canada attract some foreign tech workers and students who would have otherwise gone to the United States.

At a global level, it would appear that China is also on the cutting edge of advancing technology and wants to become a global leader in artificial intelligence development as discussed in a recent Digital Journal article China is offering more to entice top researchers compared to competitors in US or Europe.

Chaudhary also notes that Canadian tech companies are not doing the right things to keep Canadian graduates here particularly on the salary level. Of 50 markets for tech start-ops Vancouver was the cheapest with Toronto and Montreal also faring well as competitors, but unless Canadian technology companies start to to compete with salary levels in the US they will fail to keep and attract the top talent they need.

Heather Galt, of Communitech said that many hope that students will study abroad and then return to start companies or contribute to developments in Canada: “I encourage my students to go and have that opportunity for international experience. It benefits the individual and Canada.I actually believe that going and having those expat opportunities is a fantastic part of how we as a country will build opportunities internally within our own country. The Canadians that I talk to in the Valley and Seattle, they have an incredible sense of pride. They miss home and love Canada. We need to encourage our companies, our schools and our students to share stories with one another to get excited. It shouldn’t be out of a sense of duty—in my mind it should be that you really believe and really want to be a part of what’s coming.” The small study is not in any way a definitive study showing that there is a brain drain. Indeed there are studies that show the opposite which is not surprising given the political uncertainty in the US at present. However, the study does show the need for Canadian tech companies to offer salaries that are competitive to those in the US. The Canadian government and investors have been promoting tech industry in Canada as discussed in a recent Digital Journal article. This investment will be in vain if top tech talent in the country decides to move south.

R