Future of Work

Amid nationwide tech hiring spree, startups get flexible on benefits and industry boundaries

Three software engineers looking at a laptop
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Canadian tech startups and scale-ups are battling it out for skilled engineers, experienced sales reps and top growth executives, and the competition is only set to increase. New companies are forming in the country’s main innovation hubs at a rate often favourably compared to Silicon Valley and other established ecosystems.

At the same time, domestic success story Shopify and global giants Microsoft, Uber, Intel and Amazon have recently announced mega-expansions. All of that means even more options for top candidates.

Compensation is one way to bring in the best people, but there’s a limit to how much companies are willing to hike salaries and stock options. Instead, firms are working to build their profiles, changing where they look for promising candidates and how they approach them, and revising the list of perks they offer with a greater emphasis on employee choice.

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The scale of the demand is significant. Prospect, a recently-launched site that aggregates tech sector job postings, listed 2,122 open positions at the time of publishing, with more than half of those in Toronto, Kitchener-Waterloo, Montreal or Vancouver.  

There’s a definite squeeze for talent,” says Emma Hunt, head of talent acquisition at Logojoy, a 29-person Toronto company that uses artificial intelligence to generate logos and other design elements for users. Hunt previously worked in London, a city with more people and a bigger tech industry. “There’s a smaller talent pool [here], and there’s so many startups.”

Talking Point

More money isn’t the only thing tech companies are offering amid a nationwide hiring crunch for top talent. They’re also using each others’ services to provide perks, making benefits more flexible, and looking outside the sector to other industries in search of great people.

The growing number of companies looking to hire engineers has driven up compensation packages. Ben Zifkin, founder and CEO of Hubba, a marketplace matching brands and retailers, has seen “step-level changes” in the dollars and cents on offer in the last three years. Salaries for senior and junior roles have each increased between 10 and 15 per cent in that time. But the biggest jump has come for engineers at the intermediate level. “If you have a couple of years’ experience, and you’re able to hit the ground running and be productive … the value of those folks has gone up quite significantly,” he says, putting the rise at 25 to 30 per cent.

But the view that “people are getting paid crazy money” misses the fact that an increase in compensation for skilled engineers “is generally a positive sign” for an ecosystem, according to Zifkin. It reflects a growing set of scaling companies raising and making more money, which need to bring in good workers to continue to succeed. The Toronto market—where Hubba and its 50 staff are based—“was suppressed a little bit beforehand,” he says.

Jamie Hoobanoff is the founder and CEO of The Leadership Agency, an executive and sales recruitment firm, whose clients include Ritual, Busbud and SkipTheDishes, among others. At the executive level, she says, competition is particularly fierce in three non-engineering functions: growth and marketing; sales and revenue; and staffing, customer and supplier relations.

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In a company that starts with two people, typically “one of the founders will take strategy [and] the other will take product,” she notes. “But as they grow, they’ll start to diversify and need [someone] to lead each line of business.” Executives with the necessary experience and skills in those non-technical competencies are typically hard to find within a small startup, so founders look externally.

With roles up and down their organizations and in different departments to fill, Hoobanoff says companies are working to create an “employment brand,” to communicate their corporate values and what they’re working on.

Logojoy is a relatively new employer working with a technology—AI—that is among the hottest in the country right now (The Logic found 345 LinkedIn postings for jobs in the field in Toronto and 817 across the country, although Zifkin notes that a company like Hubba is looking for a different type of AI technologist than more broadly-focused firms like Element AI or Integrate AI).

Hunt says the company works to show off its culture and explain the nature of its work via social media content, as well as hosting and sponsoring events. When a candidate is identified, CEO Dawson Whitfield sends the first message, “just to give it more of that important and personal feel.” Executive recruits in particular appreciate contact with a founder, says Hoobanoff, who also identifies transparency around key metrics as a selling point.

Another big shift in hiring practices overall has been companies’ increasing willingness to go after candidates beyond those employed by their own direct competitors, says Hoobanoff. Hubba has looked even further afield since its founding in 2012. “One of the things we initially implemented was an investment banker rehab program,” says Zifkin. Those data-driven, analytical types helped build the business side of the company.

It also supported the creation of Ladies Learning Code (now a program of Canada Learning Code) to enable women in other industries, such as advertising, to move into tech. And Hubba doesn’t sweat turnover, which tends to be an ecosystem-wide preoccupation. Zifkin says the company likes to see people try something new after two years—whether that’s internally, by launching their own startups, or at other companies, where he’s helped place his own employees.

What coders make now

The median salary in Toronto for a software engineer with one to five years’ experience is $75,000, according to self-reported data from 1,044 users collected by LinkedIn.

 

Those with six to 14 years of experience bring in an average of $84,000.

 

The numbers vary by region. Vancouver leads, with an average salary among all software engineers of $82,000; followed by Toronto at $75,000; Kitchener at $73,000; then $70,000 in Montreal; and $62,000 in Halifax.

Silicon Valley pioneered the workplace-as-playground model, with an emphasis on novel office amenities and catered meals. While Canadian startups often have exposed brick and high ceilings, they increasingly pick which perks to offer with employee choice in mind.

In a 2015 Ernst & Young study, 74 per cent of respondents said being able to control their own hours without giving up career advancement was a very important consideration in choosing a job.

Hoobanoff says more companies are offering flex time and unlimited vacations, or monthly Ritual budgets to buy lunches and coffees and travel savings-matching via Vacation Fund. She’s encouraged to see companies support each other as customers, even if they’re sometimes competitors for the very talent receiving the perks their platforms enable.

Hunt says unrestricted “holiday”—a Briticism—was the only perk on offer when she joined Logojoy to lead recruitment as one of its first employees. She soon added extended health, dental and vision benefits. “That’s pretty standard in any company,” she says.

Other incentives—like team outings, conference and course budgets and fully-paid six-month parental leave—were pulled from what worked at her past employers, or staff wishlists. She opted for a monthly $100 stipend for fitness over a corporate gym or class subscription partnership after consulting co-workers.

While they believe their companies’ compensation and perks are competitive, both Hunt and Zifkin say their best tool in selling potential hires on a job is the the work that they’re doing.

“There’s no ping-pong tables or slides in the office—they’re not coming for that,” says Zifkin. “They’re coming for the massive challenge, and knowing that it’s supported by a strong adult company with good people.”