The 4 Things Making it Damn-Near Impossible to Hire Engineers in Toronto Right Now (And What to Do About It)

Art via Tax Collection

If you’re trying to hire engineers and having a hard time, you’re unfortunately not alone. The simple reality is hiring engineers in Toronto is a nightmare for hiring managers and founders. Unfortunately, this is due to the perfect storm of four factors hitting the Toronto market all at once. But if you’re in this spot, there are a few things you can do. In this blog, I’ll take you through the four perfect-storm factors and outlining the ways your company can compete in this red-hot talent market.

At Bloom, we like to call what’s happening the perfect storm.

Art via Tax Collection

Factor 1: An exploding market

Some small brands you might have heard of — Netflix, Amazon, Microsoft, and others — have all announced they are building Toronto offices or hiring Toronto teams. And it’s not just that more companies are coming. It’s that these companies plan to hire dozens (if not hundreds) of engineers each. Suddenly, Toronto turned from Canada’s biggest city into a global talent mecca, which means a great many wonderful things but also creates a huge talent crunch.

Factor 2: Dollars and cents

When multiple massive companies come into town, wage pressure skyrockets. It’s not just that talent is drawn to a cool brand for their resume (though that would be enough to cause hiring problems), it’s that there’s real money on the table. This is because many international companies setting up shop in Toronto are calibrating pay rates to San Francisco or New York market salaries, which means Canadian startups face a double whammy: competitors pay more both in terms of absolute salary number and salaries net out higher because of the exchange rate.

For example: consider a junior engineer in a Toronto startup being paid under market value (it happens a lot) might pull in $60,000 to $70,000. If they job-hop, they could nearly double their salary when you factor in the cushy salaries big American companies pay and the USD-CAD exchange rate.

Factor 3: Global talent pools and remote work

We’ve known about Canada’s brain drain for a while. Political instability in the United States slowed that outflow and even reversed it a bit as more Canadians came home and more skilled immigrants came here instead of the US. But now we face brain drain 2.0: global talent pools and remote work stemming from the pandemic.

Toronto used to benefit from a somewhat insular market: we paid the highest salaries in Canada, so people kind of had to stick with it if they didn’t want to leave the country. Now with remote work, engineers in Toronto can work for fantastic American or European companies even if they don’t have local offices.

Factor 4: Career trajectory

As Toronto built up its ecosystem, we faced a huge lack of good developer managers. The solution a lot of companies chose — since we didn’t pay enough to lure those managers in from the United States — was to take their best developers and make them managers. But this is not what all developers want, and many would rather go freelance or move to another company in a senior coder role so they can focus on building, not managing. This is especially true when you factor in both remote work and major companies setting up shop in Toronto, meaning good developers are getting more options than ever to leave a company trying to force them into management.

Recruiting engineers? Here’s what you can do

All is not lost if you’re recruiting engineers right now. Here’s what you can do.

1. Be transparent

When exploring new opportunities, people either want to know exactly what they’re getting into or they want to get paid so much they don’t care. It’s not that every engineer is dying to work at Facebook or Google — quite the opposite — it’s just that you’re paid so much and given so much prestige with these firms that you’re willing to suck it up for a while.

You can break this process by being transparent: salaries, equity, total compensation, vacations, and role guides. If people know they are joining a company where they can do meaningful work, that often matters more than the dollar value on their paycheque (but only to a point: you still have to pay fairly and competitively).

2. Be inclusive

Despite multi-million dollar marketing campaigns, major tech companies all face huge inclusion challenges. If you want to win talent that cares about inclusion, be inclusive. That doesn’t mean decking out your logo in rainbows each June, but creating a cohesive and repeatable interviewing, recruiting, and performance management process that lets people’s work and personality shine through.

3. Rethink career paths

Don’t expect every good developer to want to become a people manager. You can certainly add a mentorship component to senior jobs so that junior developers can learn their craft from the best, but creating a two-pronged career path (one into mentorship while still working as an individual contributor and another into formal people management) is an easy way to retain more of your developers and recruit others who are tired of the up-or-out slog.

4. Be intentional about connecting with candidates

Those big companies that pay way above market also usually have a team of recruiters whose entire job is connecting with future talent and staying in touch. You can do the same thing, albeit on a smaller scale. Doubling down on a magnetic talent brand strategy will help you build awareness and excitement within the community of folks you’d like to hire so when you are doing so people will either apply or respond to your LinkedIn request. Give yourself the best chance of having an amazing candidate lined up as soon as the perfect role comes through.

5. Be flexible on start dates

The pandemic has been a lot for people. Between kids, homeschooling, missing families, and not seeing friends, we’ve all been through a bunch. And that translates into the job search: giving a strict start date could be the difference between a candidate accepting and declining your offer. Sometimes the right folks are out there, it just isn’t the right time for them. So, let folks know in the job posting and your messaging that the start date is flexible (if it can be). This will put some folks at ease and may help passive candidates get over the hump of “I don’t want to make a move now”.

You can still find great engineers

Engineers are people. They want to feel fulfilled, happy and do good work with a group of folks that won’t give them grief. So build a recruiting and talent management process that honours that. You may not be able to compete on dollars or brand recognition with the major players, but you can pay fairly and give your engineers (and all employees) a great place to do great work. But, you could be the first to reach out, the company with leaders they admire or have a compelling mission that people can get excited about. The battle for talent is getting tougher. There’s no denying that. But you don’t have to be down and out just because you don’t have the deepest pockets.

We help startups and the people who work at them grow.