Raising salaries to attract new candidates while forgetting to offer raises to current employees could cause problems for Canadian tech companies in a 2019 job market that favours workers over companies, according to a report from recruitment company Hays.
This past year saw a number of major tech companies bringing operations to Toronto, (and Canada enlarge), and with that, an ever-increasing skills shortage – so in 2019 almost half of Canadian tech companies are planning to pump money into hiring, but Hays warns against increasing the risk of losing current employees by not putting money into their pockets as well.
In its annual Salary Guide report, Hays states that 61 per cent of Canadian employers say they have hiked salaries to attract new candidates, while those offering raises for current employees has hit a five-year low.
In the tech sector in 2018, more than 40 per cent of employers only increased salaries by less than three per cent, while more than 30 per cent didn’t increase salaries at all.
Rowan O’Grady, Hays Canada’s president states that tech companies need to keep the needs of current employees in mind and be careful not to disenfranchise the talent they already have in this competitive hiring market.
“The negative impact of talent shortages is at its highest point since 2015,” he states in a press release, “From an employer’s perspective, the job market is extremely competitive and without the right people in place, next year’s business goals could end up in doubt.
He states that “curtailing” spending on existing staff in favour of new ones, is not the solution, “the intent may come from a good place, but this is a band-aid solution. Without taking a more holistic view of staffing or having smart support and advice, further workforce problems are all but inevitable.”
Attracting & keeping skilled workers in a competitive job market
Tech job growth in Canada has been increasing over the past couple of years – Toronto was ranked as the top city for growth in 2017 with more new tech jobs than San Francisco, Seattle and Washington D.C. combined.
But the demand for talent continues to outpace the number of available skilled candidates. About 76 per cent of employers reported to Hays they have experienced a moderate to extreme skills shortage. Retirement, as well as a lack of training and professional development programs at universities and colleges in Canada, are contributing to this shortage.
On top of that, Hays reports that tech workers are one of the top sectors that feel their salary is not competitive with the market average. In fact, it reports that only 12 per cent of information technology sector professionals believe their salary is competitive when compared to all other industries.
To make matters worse the report also finds “nearly three-quarters of employers said that a shortage of skilled workers has resulted in heavier employee workloads and heightened stress.”
The current job market favours tech workers who have their pick of employers. And Hays states that “employers risk a high employee churn by not increasing salaries.” One of its top recommendations from the report is to review the compensation of current employees to make sure salaries remain competitive and up to date with changing trends.
However, it’s not all about the money.
Companies should also emphasize other benefits that come with or may be unique to working for its organization. Hays finds that along with competitive salaries, benefits are key to talent attraction and retention.
“We strive to be competitive with our salaries but know that we are up against big players that have endless resources, ” said Dinesh Kandanchata, chief operating officer at Gatineau-based software company Macadamian Technologies in the press release. “This challenges us to be creative and to break the mould. Money isn’t the only thing that gets people in the door. The purpose of a company providing people with meaningful work and a culture they feel passionate about goes a long way.”
The top five benefits that matter in recruitment according to Hays are:
- Three or more weeks of vacation time,
- The ability to work from home,
- Health
- Flexible work hours and;
- Dental coverage
Hays’ report states that topping up salaries with benefits such as these or relocation services can go a long way in attracting the right candidates and keeping current employees happy.
Job openings galore in 2019
In the past year, Hays says it observed a spike in job vacancies across sectors and leading into 2019, new positions and opportunities are being created each day – almost half of Canadian companies are planning to hire this year.
In our annual ITWC CanadianCIO Census for 2018 44 per cent of industry leaders state that they plan to hire or increase their IT department headcount, with 42 per cent also hoping to keep their IT headcount stable.
Our findings, as well as Hays’ report, show that the most in-demand jobs include big data, business intelligence analysts, software developers, and security engineers.
Keeping in mind the competitive job market, employers looking to hire tech workers will need to make sure their current employees are not overlooked, by ensuring salaries remain competitive, offering key and unique benefits, as well as a strong workplace culture that emphasizes meaningful work.
Maintaining a strong leadership team and offering employees upward growth opportunities are other ways employers can keep and attract top talent, according to Hays, which reports that the primary reasons workers consider leaving current positions is related to salary, career growth opportunities and changes in leadership or management.
Hays’ recommendations that tech employers in 2019’s competitive job market, “need to walk the talk.”
The key takeaways from the report are to keep current employees in mind, convey a culture of technological innovation companywide, top up salaries with benefits, and build pipelines and relationships with potential, highly skilled candidates.