Finding solutions to Canada's brain drain

It's no secret that the information technology (IT) industry is facing a shortage of skilled workers, but this condition has recently been amplified by the high demand for employees with skills required to solve Year 2000 problems. With the rapid pace of change inherent in this industry, and the demand for workers exceeding the supply, the battle in the employment arena has undoubtedly intensified. Canadian IT companies, in particular, face an added hurdle. Not only do they compete with one

It's no secret that the information technology (IT) industry is facing a shortage of skilled workers, but this condition has recently been amplified by the high demand for employees with skills required to solve Year 2000 problems. With the rapid pace of change inherent in this industry, and the demand for workers exceeding the supply, the battle in the employment arena has undoubtedly intensified.

Canadian IT companies, in particular, face an added hurdle. Not only do they compete with one another for the top talents, Canadian companies must also duke it out with American firms who are luring more Canadians to work down south - a condition often referred to as the "brain drain."

"Just based on our hiring, recruiting and difficulty in getting people, my sense is that the situation is getting worse," says Norm Francis, president and CEO of Pivotal Software Inc. in North Vancouver.

His feelings are shared by many of those in the industry.

"We get calls all the time from our fellow American branches begging for people," says Rowan Greer Marsh, president of Toronto-based Computer Action, an IT contracting staffing firm. "We have this giant neighbor next door who has a much bigger need than we do . . . and who are coming here to seduce our boys and girls."

Those in the industry interviewed by CDN agree that in order for Canada to compete effectively in the global IT market, solutions to the current worker shortage are needed - fast.

But just how bad is the situation? According to the Canadian Advanced Technology Association (CATA), a total of 16,000 jobs in IT remain unfilled each year. CATA predicts that Ontario alone will need more than 56,000 new professional IT workers over the next five years, although Ontario universities will produce only 14,000 IT graduates. Preliminary results from a survey being conducted on the issue by CATA and Angus Reid show that those in the industry are more than aware of the problem. The survey reports that 88 per cent of advanced technology businesses believe they face a skills shortage, while 54 per cent report their company has advanced technology employment opportunities that have been open for at least three months. In large- to medium-sized companies, three-quarters report having openings for more than three months. Final survey results are expected in June.

The most sought-after workers today are mainframe programmers needed to deal with Year 2000 problems. In fact, the demand is so high that many retired workers who know the legacy systems have reentered the work force.

"They know the demand is out there, so they may as well make $100,000 in one year and then retire," says Donna Zazula, recruitment specialist, at Toronto-based Bassett Laudi Partners Inc., who has placed several retired workers in contract positions for Year 2000 problems. According to Zazula, average contracts last six months at a rate of $50 to $70 an hour.

Aside from these workers, there is also high demand for networking specialists, SAP consultants, SQL specialists, Java technology developers and those with experience in asynchronous transfer mode (ATM) development.

"The positions available are not junior positions that remain open for three months, and it's not even the intermediate positions," says Mitch Robinson, vice-president of finance of Messa Computing Inc., an IT staffing company based in Ottawa. "They are usually the leading-edge skill set or the very specific skill set types of positions, or (those in) very broad demand such as COBOL because of the Year 2000."

To find employees, IT companies have to cast a wide net in the employment waters, using the Internet, newspapers, and headhunters. But companies realize that it takes the right bait to catch the right people.

"You hear about the frustration of new graduates in terms of finding work . . . but they've got to have experience and experience in the right skills," says Robinson.

"There's no shortage of inexperienced people, there's a shortage of experienced people," agrees Gary Paquette, chief technology officer of Ottawa-based ExoVision Technologies Inc. "The problem is that a lot of companies are really monitoring their budgets and are willing to go the extra dollar not to have to handhold somebody for a year."

At Pivotal, according to Francis, there are 40 unfilled positions.

"We just can't find the people," he says, adding that Pivotal searched for more than six months to find a vice-president of marketing. Eventually it hired an American and based him in the U.S.

The problem is that the situation in the U.S. is not much different, which means Canadian companies must compete for the same people. A recent U.S. Office of Technology Policy report concludes that at least 95,000 new computer scientists, engineers, systems analysts and programmers will be needed each year until 2005. This compares with approximately 24,000 new computer graduates coming from American universities each year. To this end, many American companies are filling these positions with Canadians, starting from the top minds coming out of Canada's universities and going right up to experienced workers looking for opportunities offered by companies in high-tech meccas like Silicon Valley. Canadian IT specialists are being wooed with high pay, competitive benefits packages, and lower taxes.

"They're playing their cards very well, and they're making it difficult for the Canadian industry to get those resources," says Paquette. "The Canadian dollar is also hurting big time right now, and we can't compete with it . . . everybody knows that when you're in the high-tech industry, your life cycle within an organization is shorter than any other industry. You want to be somewhere where you can network with people, or within an environment that allows you to do that. It makes a lot of business sense to be in that area."

A survey of IT contractors conducted by Computer Action last December reports that 75 per cent of IT contractors would consider taking assignments in the U.S. An astounding 57 per cent said they would consider moving to the U.S. for work. The primary reason given? More money.

Recruiting has become such a high-stakes game that even the weather is used in some campaigns. "Some companies have billboards that promote the lifestyle in California," says Lynn Nicholson, human resources manager at Ottawa-based Corel Corp. "That's difficult for us to compete with. They look out here, see the snow and say, 'We want to go to California.' But more importantly, we can't compete with personal tax rates."

While Nicholson insists it's for competitive reasons, and not because of the weather factor, Corel is allowing employees to telecommute to Canada from regional offices in the U.S.

Pivotal's Francis believes there should be a mechanism which allows Canadian companies to recruit more from the U.S. by giving the "workers tax relief for a number of years.

In order to compete with the types of salaries offered by U.S.firms, Paquette estimates that Canadian companies would have to pay approximately 40 per cent more to be competitive to U.S. offers.

For resellers, the challenge is even greater. "They typically won't have the financial clout to compete," says Francis. "A good example would be VARs, people who do enterprise-scale type of implementations, those dealing with Microsoft Office. Our software, for example, works with Microsoft NT, SQL server. And it's extremely competitive for us and them to hire these workers. So they (the resellers) have to compete against us, against the Nortels, those kinds of companies, so it's become increasingly difficult."

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