Tonner Jackson spent a lot of time and money searching for a front-end engineer to join his Vancouver-based creator economy agency, Course Studio, but to no avail.
“We were trying to hire for this role for four months, just kicking the tires on conventional channels,” Mr. Jackson says. “We hired recruiters and there were zero results – just by the one dimension of, could they do the job at the level we want?”
But after one search query on VanHack, a platform that connects foreign-based talent with Canadian-based employers, Mr. Jackson’s company found its dream candidate in South Africa.
“There’s an enormous amount of demand, but not a lot of supply in Canada,” Mr. Jackson says. “In international markets, for employers, there’s enormous supply.”
The need for talent in Canada is growing faster than the local candidate pool can accommodate, and the transition to remote work has inspired many employers to look beyond their immediate geography to fill vacant roles.
According to a recent study conducted by Robert Half Canada, 49 per cent of senior managers anticipate adding new permanent positions in the first half of the year, while 45 per cent intend to fill vacant positions in the coming months.
To contend with increasing competition in the labour market, 29 per cent are providing more paid time off, 31 per cent are loosening skills, education and experience requirements, while 46 per cent are increasing their starting salaries, according to the study. The most popular solution, however, is widening the candidate pool beyond the company’s local area, a strategy that is being employed by 47 per cent of respondents.
“No longer are they necessarily constricted by geography, especially for some of those roles that they are willing to offer as fully remote opportunities,” says Koula Vasilopoulos, a senior district director for Robert Half Canada. “It really is an employee-driven market right now, and if they’re not using this kind of strategy, they’re going to reduce the pool of talent they have access to.”
Employers seeking to tap into foreign talent markets have a number of options to consider, each with their own potential challenges. For example, they may choose to hire a full-time remote employee based elsewhere, utilize the services of foreign contractors, or bring foreign workers into Canada on a temporary work visa.
“Most companies are going to try to hire them as independent contractors,” says Sharaf Sultan, a Toronto-based employment lawyer and principal at Sultan Lawyers Professional Corp. “That becomes challenging the more integrated they become because, if they’re an independent contractor but they’re spending 100 per cent of their working time with you, that might trigger obligations in their jurisdiction.”
Mr. Sharaf says there are tax and legal implications associated with hiring full-time employees based outside of Canada, but requirements can differ dramatically between countries.
“That’s where I think it becomes more complicated,” he says. “What happens is you become more likely to [be required to] create an establishment in that other jurisdiction, because essentially, you’re hiring and paying locally, and now you have tax obligations locally.”
The other alternative is to bring new hires into the country through Canada’s Temporary Foreign Workers Program, but that approach is also not without challenges.
“The first question you ask when you’re hiring a foreign worker, or looking into it, is: ‘Do I need a labour Market Impact Assessment?’” Mr. Sharaf says.
He explains that workers in specific industries identified by the Canadian government or countries that share trade agreements with Canada typically don’t require such an assessment.
“If you do need a labour market impact assessment, then in the majority of cases, that will involve advertising,” he says.
“You need to advertise [the role] across Canada, and you need to target websites that would be appropriate for that occupation, then you need to apply, and then you need to prove to Employment and Social Development Canada that despite making reasonable efforts, there is nobody readily available to do that job in the region.”
Whichever route an organization chooses, there will likely be some practical issues related to taxation, compensation and more administrative concerns.
“You need to look at whether there are any corporate tax implications of having this person there, both Canadian and foreign,” said Debra Moses, partner and leader of the expatriate tax practice at BDO Canada. “Are there any transfer pricing issues by paying this person from Canada, like payroll? How do we set that up? That’s always big. And the employment contracts, the employment law, how do we structure it to make sure the Canadian company is tax-efficient in both countries?”
Despite the challenges, Ms. Moses says the appetite for foreign talent from Canadian-based employers has increased significantly in recent months, and isn’t likely to fade any time soon.
“I get a request almost daily on, ‘how do we handle this?’” she says. “Companies are still questioning what they can do, what they need to do, to make it work.”