Canada’s New Brain Drain Problem

By Benjamin Bergen, CCI Executive Director

I’d like to highlight a trend CCI is monitoring that I’m calling Brain Drain 2.0.

In the past year, nearly every person in Canada has been forced to stop and think about how they work. The COVID-19 pandemic has provoked such a parade of disruptions to the rhythms of ordinary life, and nowhere has that been more acutely felt than in the workplace.

The shift to remote work has been profound and forced business leaders to adapt. At CCI, our team is now scattered across three time zones, four provinces and five cities, and the way we work will never go back to the way it was before the pandemic.

Pandemic disruptions have also made it more challenging for Canadian companies to recruit and retain highly skilled workers. Over the past few months, we’ve been hearing stories from our members about how it’s harder than ever to find the workers these companies need to grow. Speaking to the Canadian Press recently, Clio CEO Jack Newton talked about his own challenges recruiting talent as he tries to scale-up. Adam Froman, CEO of Delvinia, raised similar concerns in the Financial Post.

This is Brain Drain 2.0.

Classic brain drain is when Canadian skilled workers leave for jobs in the United States. A recent study of LinkedIn data found that two thirds of Waterloo software engineering grads left Canada, the overwhelming majority moving to the U.S. The same phenomenon has been documented in another study that also covers grads of the University of Toronto and the University of British Columbia.

What we’re seeing now is a shift to remote work that makes physical geography and national borders less important than ever before. Silicon Valley tech giants used to set up branch plant engineering hubs near Canada’s top universities. Now they’re setting up shop in Canadian home offices, kitchen islands and living room workspaces.

Brain Drain 2.0 will be with us long after we defeat this horrible pandemic and life gets back to normal. A survey of entrepreneurs by BDC published this month indicates that 74% of SME owners will continue to offer remote work to their employees, and more than half of employees say they prefer to work remotely, and access to remote work will be a determining factor when seeking a new job.

Brain drain has been a concern for CCI for years because access to talent is one of our top issues.

Nearly every conversation I have with our member CEOs tends to deal with workforce issues in some way. Scale-up companies can’t just maintain their workforce, they need to grow — rapidly — and adding the best and brightest talent remains a constant obsession.

The tech talent shortage has been a persistent problem in Canada; before the pandemic, there were approximately 216,000 tech jobs unfilled because companies simply could not find qualified talent. And as Covid forced us to rely more heavily on technology and digitally-connected services, the need for skilled labour in this burgeoning sector has only increased.

The bottom line is this: We are seeing a major step forward towards a global labour market, where geography is no longer as important as it once was, and companies from around the world compete for the same pool of highly skilled talent. Technology companies are at the bleeding edge of this transformation.

So the question is, how do Canadian business leaders position themselves for success in this dogfight for global talent? As Canadians, I think we need to sell ourselves not just with dollars and cents, but also with the unique personal and professional growth opportunities that only exist at fast-growing Canadian scale-up companies.

There’s an obvious mystique to the startup hustle — taking an idea and turning it into a business with a small group of co-founders, toiling away in obscurity, chasing a dream.

But we don’t talk enough about the thrilling opportunities at the in-between companies, the scale-ups. Working for a Canadian technology scale-up often means shaping the future of a rapidly-growing firm who often become anchor companies for the whole region and can permanently transform the local economy. Inside Canadian scale-ups, workers can help shape the identity and culture of a company as it grows, and get meaningful access to executive management, and be empowered to make real decisions. Headquarter jobs also give you an opportunity to build a career in a diverse pool of non-technical jobs. Working at a scale-up can also be extremely lucrative, in terms of career-development and growth equity opportunities that come with stock-options at a rapidly scaling firm.

These are the sorts of value propositions Canadian companies need to be making when competing for global talent.

Brain Drain 2.0 doesn’t need to be a defining feature of the Canadian labour market, but it’s real and it’s happening right now. We will need to understand it and adapt.

Life after COVID-19 won’t be the same as it was before. I’m already hearing from smart CEOs who are trying new tactics for talent recruitment, retention and development. We have every reason to believe that Canada can compete and win in this new reality. It starts with telling great stories, and I encourage you to share your own.

Every month, CCI executive director Benjamin Bergen sends an ‘New Business’ email to our newsletter subscribers, highlighting important issues and trends impacting the Canadian innovation economy.

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