Technology companies in Canada are running into an age-old frustration as they vie for talent in a highly competitive hiring landscape: It’s tough to find qualified workers.

With the wider labour market still in recovery mode, the tech sector stands out. It’s not only managed to get through the pandemic with minimal damage, but many companies – from fledgling startups to industry stalwarts – are firmly in expansion mode.

That’s apparent in the numbers. As of March, employment in professional, scientific and technical services had climbed 6 per cent over the pandemic, behind only the education industry. (Overall employment is down 1.5 per cent.)

And tech companies want more workers. Job postings for tech roles were up 30 per cent from prepandemic levels in early March on job-search portal Indeed Canada, with higher demand for software engineers, developers and management. That outpaces a 5-per-cent gain in non-tech postings.

As such, the tech industry is firmly placed on the upper branch of the K-shaped recovery, a fortunate position after a devastating year for many industries. Still, that leaves tech companies in a high-stakes battle for talent – and vacancies can take a while to fill.

“The job market is very, very tight,” said Alex Popa, chief executive officer of Boast Capital in Vancouver. “There’s just no availability of experienced employees. It’s pretty strange. A year ago, you would have never thought this would be the case.”

“This trend was happening way before COVID,” said Benjamin Bergen, executive director of the Canadian Council of Innovators (CCI), a lobby group of high-growth tech companies. “And in some ways, COVID may actually have added jet fuel to it.”

For various reasons, the tech sector has managed to cope with pandemic realities. It was uniquely suited to the abrupt shift to remote work. Certain trends – such as warehouse automation – have only accelerated. And with plenty of cheap cash around, it’s been a great time to raise money.

“The availability of capital has really skyrocketed,” said Mr. Popa, whose software startup announced in December that it had raised $30-million. “It’s become fairly affordable to raise capital and double-down on growth, and we see that across the board.”

That’s helped to fund the hiring boom. Boast has gone from around 30 employees in December to more than 70 today. Zensurance, a Toronto-based insurance startup, has nearly tripled its headcount over the past 16 months. Gatik, a California-based company that specializes in autonomous vehicle deliveries, plans to double its Canadian staff within the next few months.

“We are always fighting for talent,” said Arjun Narang, the company’s chief financial officer.

Despite a massive labour shock, the talent isn’t necessarily there. In January, there was just over one job seeker for every vacancy in professional, scientific and technical services, according to an analysis of labour data from Mikal Skuterud, an economics professor at the University of Waterloo. Only the finance and health care industries were tighter.

Job-seeker interest can vary widely, based on the position. Junior roles at Zensurance will quickly get hundreds of applications, although the vast majority come from China and India and get dismissed, as the company prefers Canadian-based talent, said CEO Danish Yusuf. But senior roles that require a decade of experience may draw two or three applications in a week, he said, forcing the company to bring in a recruiting firm to help.

Filling leadership positions is a long-standing problem in Canadian tech, Mr. Bergen said. “Where Canada has really struggled is growing firms from $10-million to $100-million to $1-billion in recurring revenue,” he said. “We don’t have a lot of highly skilled workers who have done that. … There’s maybe a handful of them in Canada.”

A key consideration with job vacancies is wages. Several companies said they’ve hiked their pay offers to lure desirable candidates. Furthermore, Indeed found the largest growth in tech listings was for high-wage roles with annual pay above $81,000.

“We offer competitive packages, and we make adjustments as we need to get top talent,” said Shawn Malhotra, head of engineering at Thomson Reuters, which has roughly 70 openings at its Toronto-based technology centre. (Woodbridge Co. Ltd., the Thomson family holding company and controlling shareholder of Thomson Reuters, also owns The Globe and Mail.)

Still, Mr. Yusuf of Zensurance said it’s tough to compete with the likes of Shopify Inc., which can layer on stock-based compensation to their pay packages. (Since Feb. 1, 2020, Shopify shares are up 142 per cent.) And the homegrown tech giant is looking to get bigger.

“In research and development, we are launching an ambitious hiring campaign for engineers that we expect will gain strength over the course of 2021,” said Shopify CFO Amy Shapero on a February earnings call.

To alleviate the pressure, wage offers may need another hike, or companies may have to adjust their expectations of candidates. In a prebudget submission, the CCI called on the federal government to boost its investments in training programs.

At Zensurance, it was tough to find tech-savvy insurance brokers with years of experience. As a result, the company has brought on plenty of recent university graduates or people looking to switch careers, and puts them through a training boot camp.

However, that’s a tough act to replicate with the technical team, which includes Javascript developers, product leads and user-interface designers.

“I would literally double that team this year, if I could find the right number of people,” Mr. Yusuf said.

The Globe and Mail, April 19, 2021