It’s harder than ever for small business owners to find the right workers. The Battle for Talent series looks at hiring difficulties in several sectors and offers solutions.
Until about six months ago, Carol Leaman, chief executive officer of Axonify Inc., knew what she needed to do to attract superstar tech employees to the digital learning firm based in Waterloo, Ont. It was simply a matter of convincing them that her company could be every bit as innovative and exciting to work for as anything in Silicon Valley.
Certainly, landing a job at Facebook, Google, Amazon or Microsoft might look good on a résumé – not to mention fatten the wallet – but Axonify, which launched in 2012 in Ontario’s tech hub, could give them interesting and varied tasks, more autonomy and a collaborative environment.
Oh, and free snacks. They’d get those, too.
Yet while the company, which helps corporate clients like Walmart, Bloomingdale’s and Merck train their employees with personalized three- to five-minute mini training modules through its web-based platform, has now grown to employ 170 people, Ms. Leaman is the first to admit that recruiting new employees this past half-year hasn’t been so easy. She describes the competition for talent in the Toronto-Waterloo tech corridor as “intense.”
“We’ve seen a noticeable increase in difficulty in the last six months,” she says. “More so than it’s ever been, actually.”
Axonify is like any other Canadian small business struggling to find workers to fill key positions at a time of low unemployment, but being part of Ontario’s tech sector currently poses a couple of unique challenges, Ms. Leaman says.
For starters, large companies and global corporations such as Amazon, Shopify and Uber are making headlines as they move into the region and hoover up 100, 200 or even 500 developers, marketers and IT salespeople at a time. That’s great news for job hunters. Not so much for smaller companies like Axonify, which hires only a handful of employees per quarter, and now has to hire from a much smaller pool of available talent.
Ms. Leaman is perhaps even more concerned about organizations such as Terminal coming to town. A U.S.-based, venture-backed startup, Terminal helps American firms to hire Canadian developers and access tax credits. The employers don’t even have to open Canadian satellite offices to house them. Instead, their new employees work remotely from a shared Terminal office in Canada. They’re technically employed by Terminal, but report to the company they’ve been hired to help.
No muss, no fuss – and a much easier route compared with hiring cheap labour elsewhere.
Not only are Montreal, Vancouver and Waterloo in the same or similar time zones as their U.S. corporation counterparts, employees speak the same language and flights to facilitate face-to-face meetings are short.
While at one time Axonify had to convince new engineering graduates to stay in Canada and not be lured to San Francisco, recently that story has flipped.
“Now we’ve got the pressure of almost the reverse happening,” Ms. Leaman says. “Companies want the employees to stay in Canada because of the cost, but it puts that hiring pressure on those of us that are actually here.”
It doesn’t help that big companies’ deep pockets are helping salaries to skyrocket. Ms. Leaman says lately she’d been hearing whispers of senior developers in the region receiving salaries approaching $200,000 a year plus guaranteed bonuses – much higher than the average of $93,000 in Canada according to Indeed, the online job site.
“Price points are being driven through the roof. It’s a recent phenomenon. And you know for the companies that aren’t billion-dollar companies, the sustainability of that for them is very difficult,” she says.
To recruit and retain the employees they have, Ms. Leaman says Axonify does what it can to make itself as attractive to potential and current hires as possible. It tries to compete with market pay rates, while ensuring employees – particularly millennials – feel valued and appreciated by recognizing their contributions publicly. She wants her employees to arrive at work pumped and know their work truly matters, a “uniquely differentiated feeling than you would typically get in a 500-person company,” she says.
That’s exactly the right move if Axonify wants to keep drawing star employees in a pressured – and expensive – hiring market, says Chet Robie, professor of organizational behavior and human resource management at the Lazaridis School of Business and Economics at Wilfrid Laurier University in Waterloo.
“I would start working on making their compensation more competitive – and by doing that you don’t always have to increase base salary,” he says, mentioning perks such as flexible work arrangements, and the ability to quickly advance through the ranks and enjoy interesting work each day. “What really resonates with this group of people doesn’t have to break the bank.”
While offering stock options is a nice idea, he points to other local companies that offer something called an employee trust. If the company is ever bought out, a pre-specified percentage of the purchase price would automatically get doled out to employees. The longer the employee has been with the firm, the bigger percentage he or she gets. It’s a way to encourage and show appreciation for loyalty. Of course, companies that are successful are much more likely to be bought out, so it’s in everyone’s interest to work hard and prosper.
Axonify has something else going for it that few big IT competitors can boast: women in executive positions. He points to a study conducted by one of his graduate students recently that showed a correlation between the number of women listed on an organization’s “about us” page and how welcoming the firm seems to outsiders, which would include job hunters.
Of the 13 executives listed on Axonify’s site, six are women.
Dr. Robie concedes that even without mounting salary pressures and a shrinking employee pool, hiring great people is tough for small, growing tech businesses, even in the best of times.
“Their hair is on fire, these small organizations,” he says, explaining that younger enterprises, particularly startups, run at full tilt in the beginning and are too busy to come up with strategic human resources plans. Even so, it’s important to use strong evidence-based methods to select people. Highly structured interviews, in which the interviewer already knows the right answer before the question is asked, certainly helps to find the right person for the job.
“The thing is, if you are getting a bad hire for a company of 10 or 50 people, that’s a lot worse than for a company of 5,000,” he says. “Those one or two bad hires can sink your organization.”