Why US Tech Startups Should Hire Canadian Employees [2022 Stats]
Hiring top-tier tech talent is expensive. Today, hiring a new software developer will likely cost you an estimated 20-25% of an employee’s annual salary. And salaries have gone up, too: over the last year, developer salaries increased between 20 and 30%. That translates to intermediate developers being paid $130K USD annually, and Staff Engineers making roughly $170K. Depending on a developer’s location, past experience, and the stack they’re working on, that annual salary may be even higher.
In California, for instance, developers are paid around 22% more than the national average, and New York is around 12%. Especially given the current economic conditions, it’s hard for startups and mid-size companies to compete with tech giants.
Software Engineer Salary Review 2022, Hack Reactor
There is a silver lining, though: remote work has opened up a global marketplace. Software engineers often prefer remote work, or are at least familiar with it. Over the last decade, the mindsets of hiring managers and technology leaders have shifted in how they perceive remote work. “Remote” no longer means offshoring with limited oversight or hiring remote contractors; rather, many leaders now believe it’s possible to build a remote development team, and perhaps even preferable.
Of course, not all software development talent is created equal. When considering building out your remote team, there are a number of considerations that should be taken into account. While cost-effective labor is an attractive feature, there are other factors that must be considered: is it feasible to hire a developer in another time zone? Is there enough cultural overlap with the remote candidate and your team to be successful? And is the talent going to be strong enough?
One country that many U.S. companies are looking to that checks all of these boxes is Canada.
Canadian Software Developers: A Well-Kept Talent Secret
Canada has a dynamic, globally competitive, and growing talent pool. In 2021, Canadian hubs like Calgary, Vancouver, and Toronto saw a growth in digital skills (like React, SQL, Java, and Node.js) of 6%; for comparison, top cities in the U.S. saw less than 5%. In fact, Toronto has one of the largest and fastest-growing pools of software development talent in the world. It’s for this reason that some of the heavy hitters in tech, including Uber, Netflix, Google, and DoorDash have all opened up offices in Toronto.
What’s more, many Canadians want to work with U.S. companies, but don’t want to relocate. There are a few major reasons for this:
They can make higher salaries than they can would working for Canadian companies
US technological growth is attractive, and the volume of U.S. companies gives them unique opportunities to work on cutting-edge projects
Remote work offers flexibility
They receive international exposure, working with developers across the border.
If you’re not convinced yet, below are a few reasons you might want to consider looking to hire Canadian employees for your next remote software development role.
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#1. Canadians are some of the world’s top software development talent
You might think that Canada’s software engineering talent is limited, simply because our population is small (it’s only about a tenth of the United States). But Canada is known to produce some of the world’s top engineers. Five Canadians cities - Toronto, Vancouver, Ottawa, Montreal, and Waterloo - were ranked in the top 25 tech talent markets in North America, with Toronto taking the #3 spots in 2022. And Canada has the most highly educated workforce in the world, with a particular focus on technology - nearly 20% of graduates each year have STEM degrees. In 2021, 3 Canadian universities ranked in the top 50 engineering schools.
The University of Waterloo, located south of Toronto in Kitchener-Waterloo, is internationally recognized for the engineering graduates it produces. The largest engineering school in Canada, 35% of graduates are later employed in the tech sector. Throughout their 5-year engineering co-op program, students complete four 4-month work terms in software companies around the globe. The program is intensively competitive, and many students even work in entry-level roles within the FAANG companies (Facebook, Amazon, Apple, Netflix, and Google).
The University of Toronto has a similar program that grooms students for the professional world, offering a 12- or 16-month Professional Engineering Year (PEY). With these types of programs, thousands of Canadian students graduate from Engineering School with a strong theoretical background, as well as the practical experience to hit the ground running with your company. Computer engineering students gain exposure and experience working with a variety of technology stacks across platforms, including mobile and web.
Along with formal post-secondary education, a number of Canadian engineering students also enroll in coding bootcamps to broaden their knowledge of technology stacks and frameworks. Bootcamps like BrainStation and Lighthouse Labs are well known for their intensive structure and comprehensive training that helps programmers further hone their skills.
#2. Professional similarities and cultural overlap makes onboarding and collaboration simple
While the quality of talent is certainly key, every hiring manager knows that cultural alignment team is key for success. The best developer in the world won’t last long in your company if they can’t communicate well and get along with their manager and coworkers.
Fortunately, if you’re looking to Canada to hire your next remote software developer, you can feel confident that there’s considerable alignment between the neighboring countries.
Value professionalism and take pride in their work
For one, both US and Canadian companies value their work and take pride in their professional life. Professionalism and punctuality is expected: in both countries, meetings are expected to start on time, have a clear focus and agenda, and end when specified. You’ll find Canadians to be similar to their American counterparts, come to meetings prepared, demonstrate respect for their colleagues, and try to keep the “rabbit holes” to a minimum (or at least schedule a separate meeting for them).
Flat organizational structures and egalitarian culture
If you’re used to working in the U.S. startup environment, you’ve likely been part of a culture that is largely flat. The CTO dresses the same as the staff (usually jeans and a t-shirt) with everyone referring to each other on a first-name basis. Generally, tech startups and mid-size companies are informal with a casual dress code, exhibiting friendliness between colleagues, teams, and departments.
In meetings, Canadian as well as U.S. startups typically encourage everyone to speak up, and the opinions of all employees are valued. This is reflective of the flat organizational structure, and a commonly held belief that, regardless of seniority, all opinions are valid.
Employ similar engineering project management styles
Canadian and U.S. companies will generally employ similar engineering project management styles. Agile and scrum are some of the most popular and widely understood, though waterfall and kanban are used, too. Similarities in project management style makes it easier to onboard your Canadian employees than other countries, where differences in language and/or management style might be a harder gap to bridge.
#3. More cost-effective talent
Probably the most attractive reason in the current economic climate is a more cost-effective hire overall. A Developer in the Bay Area, for instance, will make on average between $180,000 and $315,000 per year; in Toronto, that same developer would make between $66,000 and $113,000 USD.
For the same quality of engineers, US companies can pay a fraction of the price for top-tier talent. What’s more, this price difference means US companies can even prioritize or more strongly consider senior engineers, which if were based in the US might not be accessible simply because they’re too expensive.
Reason #4. Time zone overlap for synchronous communication
Sharing a border means it’s relatively easy to align on time zones (even on opposite coasts). Before, if you were offshoring talent, it was common to look in Eastern Europe, Africa, or Asia. But these 10-to-13 hour time differences made synchronous work impossible.
Working with Canadians means that, at maximum, you’ll be working within four hours of each other (most likely, it’ll be less than three hours difference.) This overlap in work hours means it’s much easier to align meetings and schedules, for one, and also encourage synchronous work. Particularly for engineering teams that operate on 2- or 3-week sprints, being able to work in tandem on the same or similar schedule keeps release cycles on track. This means product features are more likely to get reviewed, QAed, and pushed on time, hotfixes can be deployed immediately if needed, and in general, teams can adhere to a more consistent sprint cycle.
Considerations for hiring Canadians
You might be concerned that hiring an international employee will be a headache. But it’s actually quite easy to hire Canadian talent. Especially because you’re hiring a remote software developer, you don’t need to apply for and secure a visa for your new Canadian employee.
One requirement that’s important to keep in mind is that you’ll need a subsidiary in the province your Canadian developer is located in, or work with a third party that offers EOR services such as Papaya Global or Oyster.
Conclusion
With the shift to remote work, a global talent marketplace has emerged. Canada should be at the top of your list for hiring remote software engineers if it’s not already. With top-tier engineering talent, similar cultures, language and culture overlap, and more cost-effective labor, your next great hire might be just North of the border.
