5 reasons Canadian software and tech talent is heading South of the boarder
According to a recent post by The Globe and Mail, a staggering number of new graduates in the field of Software and Computer Technology are leaving Canada and moving to the United States of America in search of jobs.
“There is a cost to such a heavy brain drain: governments spend billions subsidizing the cost of university education, while students who go on to work for foreign companies help fuel the economic growth of those countries. A lack of successful “scale-up” tech firms in Canada has been cited as one of the reasons research development spending and productivity here have lagged other developed countries.”
From a survey of 3,162 graduates from 2015 and 2016 in STEM Programs (science, technology, engineering and mathematics), the number of software-focused graduates leaving for the United States in search of work ranged anywhere from 23.6% to a whopping 65.93%. No other university Canadian University faculty has numbers like this! Software programs are losing a substantially larger percentage of graduates when compared to the other non-software focused programs within STEM Programs.
Chart: Migration to U.S.A. by Academic Program
Percentage of recent graduates that went to the U.S., based on the report's sample of graduates from three Canadian universities.
We wonder though, is it "a lack of successful 'scale-up' tech firms"...or it it simply a case of "the grass is greener"?
5 Reasons Canadians are Losing Tech Talent to the American Economy
Higher SalariesWhy do students spend 4+ years struggling through university for an engineering or science degree? You can say love of the field, but ultimately money is a primary motivator. Tech is touted as being one of the leading industries for highest-paid career salaries, and people pursue a career in this field for this reason. According to the 2018 State Salaries Report created by Hired, the problem feeding the “Brain Drain,” is easy to pinpoint. Canadian tech salaries are low. Even in Toronto (which averages the highest tech salaries in Canada) tech talent in 2017 was paid considerably lower than those working in key US tech cities (San Diego, Chicago, Boston, LA, New York, Seattle, etc). On average, Computer or Software Engineers and Scientists in those cities were paid 32 to 52% more than their Toronto colleagues.
Average Tech Work Salary in 2017 (in USD)
More OpportunitiesWhen you consider the sheer concentration of tech business in major US cities, it makes the idea of job security within a localized industry much more appealing. It’s similar to how Alberta attracts Oil & Gas professionals; US cities that focus on software and computer technology can attract more talent, simply because the density of available jobs is greater.
Career Pressures to Work with Large OrganizationsThe technology industry is competitive. For early career builders, getting the opportunity to break into a junior position and move up the corporate tech ladder is extremely important. It’s no wonder that American cities featuring businesses like Apple, Amazon, Google, Facebook, Netflix, Twitter and other tech giants attract Canada’s talent as well.
Prestige & ReputationIn every industry there are the “big league players.” In publishing you have brands like Vox, BuzzFeed, Medium; in film you have Disney, Warner Bros., Universal Pictures, etc; and in software, there are the above-mentioned tech giants. Working for these types of companies not only offers experience, but it also brings a social perception of “career success.” That draw alone is a large-enough incentive for ambitious individuals looking to achieve success on a personal and social level.
Higher Salaries – Yes, again!We already mentioned the salary increase in base salary potential for Canadians moving to the United States, but you probably thought we forgot to factor in the standard cost of living, didn’t you? We didn’t. You see, software and tech salaries in those major US cities pay higher overall, even after adjusting for the cost of living. Toronto salaries (after adjustment) average out to around $126,000 annually, which sounds pretty great, right? Yet, it’s still the lowest of the major US cities which ranged from $136,000-202,000 from New York to Austin. Adjusting salaries to accounting for the cost of living is crucial to remaining competitive.
Average Tech Salaries, Adjusted for Cost of Living 2017 (in USD)
What’s the Solution? How do Canadians Keep Our Canadian Talent?
It’s a tough question that we roll around in the back of our minds at Mobility Quotient. We feel the solution comes down to a multi-tiered approach of investing in Canada’s tech economy AND embracing technology as consumers, businesses, and as a nation. For the tech industry to flourish in Canada, it requires a shift in mindset for all Canadians: government, businesses and citizens alike.
As Consumers – part of the solution involves having more than four apps on your phone. It means taking advantage of tools and technologies created to connect you and improve your life. It’s supporting local tech businesses. It’s being self-aware and mindful of how other tech-forward cities utilize software to provide information, improve productivity, help educate others and enhance lifestyles, and then applying that to our own lives. As consumers, this isn’t just about supporting local tech businesses (through that’s always good), it’s about staying relevant during a global shift in how people live.
As Businesses – the solution is about being aware of the modern world and your ability to connect to your consumers through technology. You need an online presence! It’s not enough to fall back on the idea that, “build it and they will come.” And it means partnering with local businesses to understand how technology can improve your business.
As Government – It means promoting tech, both incentivizing American companies to come to Canada, and rewarding or supporting local Canadian tech businesses. We hear about a "call for diversification into the software industry", meanwhile we see large government projects being awarded to American-based companies—the effort is being made, but there is a disconnect from the strategists and the implementers and that disconnect needs to be bridged.
Above all, governments at every level must enforce a “Canadian-first” model for technology and software efforts within Canada. We did it for radio and broadcasting by forming the CRTC; it’s likely a good idea to do this for our software industry as well.
In the meantime, we at MQ are here with our heads down doing our best to support our customers, carve out our space in the Canadian economy, and strive to be that "successful scale-up tech firm."