Recruiting Remote Development Teams in Toronto
A Guide for Venture-Backed Startups
Competition for talent has never been higher.
The onset of COVID-19 changed the nature of work. Remote work has become the norm, and the way talent is sourced, recruited, and hired has shifted . Less need for hiring locally has opened up a global talent pool for industries that can take advantage of remote work.
Nowhere have these changes been seen more than in software engineering. Hiring great tech talent was already challenging pre-pandemic – the last 18 months has only made it more difficult.
For venture-backed startups that need to expand software engineering teams to keep up with expansion needs, the opening of the talent pool is a blessing and a curse. There is massive opportunity, but also more companies vying for talent.
This guide is for US-based venture-backed startups that are facing the challenge of scaling their software engineering teams, and are considering expanding their tech teams in Toronto. It will walk you through best practices for recruiting remote development teams so you can hire the best tech talent to meet growth demands.
We’ll go through 4 Key Areas...
Why Expand Your Tech Team in Toronto?
Over the past few years, Toronto has emerged as a tech talent mecca in the global space.
Prominent players like Google, Amazon, Netflix, Reddit, TikTok, DoorDash, Uber, Pinterest, Wayfair, and dozens of other tech giants have downtown Toronto offices. It’s not just the big companies either – Toronto has become a hub for high-growth startups hailing from the USA, including VTS, Firework, Skillz, and many others.
Toronto has plenty of advantages, making it one of the most attractive tech innovation and investment venues. The first is its proximity to the US creating strong points like shared language and cultural similarities in both work and professional aspects. Shared time zones and travel conveniences also add to the appeal.
Arguably, Toronto’s greatest attraction is its people. With its acclaimed education system and renowned innovation ecosystems, there is no shortage of tech talent in Toronto.
Toronto is the largest center of education, research, and innovation in Canada, with some of the most celebrated post-secondary incubators like DMZ at Ryerson University; OCAD University’s Strategic Innovation Lab; Humber College’s groundbreaking Barrett Centre for Technology Innovation; and many more melting pots accelerating tech transformation. The Greater Toronto Area also boasts some of the world’s most renowned post-secondary engineering and technology programs at institutions like the University of Toronto and the University of Waterloo.
Toronto is a forward-thinking, education-focused leader in the technology space with one of the most highly educated populations in the world. For that reason, investing in talent from Toronto is a lucrative venture that will return more value for your engineering dollars compared to other locations.
No language barriers
Cultural compatibility and work-life similarities
A well-educated and experienced talent pool
Why expand your engineering team in Toronto?
Hiring Canadian Tech Talent: Need-To-Knows
The Toronto Tech Market
Toronto is the fastest-growing tech market in North America.
CRBE’s 2021 Tech-30 Report ranked Toronto as the most robust tech market overall, witnessing a 26 percent market growth rate. According to the report, there are 192,200 Torontonians qualified to work in high-tech software positions.
In a sister report from CRBE, the 2021 Scoring Tech Talent Report analyzed tech-related graduation data and tech-related employment growth to identify the difference between where tech talent workers are employed versus where they were educated. Toronto is an outlier for tech talent job creation, adding 54,700 more tech talent jobs than graduates, meaning qualified talent is actively relocating to Toronto.
Such a robust and growing market makes it a prime location for venture-backed startups that are looking to quickly expand engineering teams in a scaleable, efficient manner.
Get More Value For Your Engineering Budget
Even with a top-tier workforce in Toronto, many senior software engineers can be hired for comparable and oftentimes less than their counterparts in the NYC, the Bay Area, and other major American tech markets.
Depending on seniority, skills set, and specific role, there can be differences of over 10% when it comes to compensation, with some sources citing even greater deltas. The top software engineers in Toronto naturally command top dollar in the market, but you will typically find that your engineering budget gets you more in the Toronto market.
Plus, with the Canadian exchange rate, you can get more value for your engineering dollars.
Understanding Benefit Differences
When you’re looking to hire in Canada, it’s important to remember a few key differences from the United States in terms of benefits.
Statutory holidays, for example, differ across the border. Both federally and in the province of Ontario, there are a number of holidays that employees are entitled to.
In Ontario, most employees who qualify are entitled to take these days off work and be paid public holiday pay.
Vacation & Annual Leave: There are standard vacation requirements that are federally mandated, and employers must offer a minimum of 2 weeks vacation per year . However, it is common for employers hiring for technical roles and other skilled positions to provide vacation and leave packages above the minimum, to make them more attractive to prospective employees.
Health Insurance: While Canada has universal healthcare, it’s common practice for Canadian employers to provide additional benefits like health spending accounts and coverage for health expenses like prescriptions, dentistry, and paramedical services like physiotherapy and massage therapy, for example.
For companies looking to scale software engineering teams in Toronto, vacation and benefits packages can be critical to gaining a competitive edge and attracting the best talent.
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3 Tips For Hiring Software Engineers in Toronto
Hire Recruiting Partners Who Know The Market
The best way to hire software engineers in Toronto is to go directly to the source and recruit with experts who understand both software engineering as well as the local market.
Collaborating with software engineer recruiters who understand the complexity of creating high performing software teams saves you time during resume screenings, technical assessments, and interviewing.
Partnering with software specialists with a good reputation and pulse on the market also helps to improve your reputation as an employer, surface stronger candidates, and improve quality of hires – all critical in a highly competitive market.
Benefits Of Partnering With a Software-Focused Partner
Access to community of tech professionals
Reduced rejections in hiring funnel
Expedite the hiring process
Improve quality of hires
What You Get From a Software-Focused Partner
Candidates vetted by experienced software professionals
First round of resume and technical screening
Cost-effective hiring process
Better retention rates
Offer Value In The Process
Scaling a software development team can be particularly challenging when you’re dealing with tight deadlines, gaps in expertise, and talent shortages. That’s why it’s important to work with a recruiter that creates value in every step of the process, from initial sourcing through to vetting, interviews and offers.
Work With People, Not Resumes
There’s nothing more frustrating than working with recruiters that don’t understand the needs of the candidates and companies, which is why it’s so important to work with people and not resumes.
Throughout our process, we work closely with our candidates to make sure the roles we offer directly apply to their specialization and expertise. That way, candidates get rewarding jobs, and companies get hires that fit the bill.
“DevTalent was very impressive to work with. I initially worked with them to pursue an opportunity which unfortunately was not a good fit at the time. However, not long after, Sean, the recruiter with whom I was working with, personally reached out to me to introduce another opportunity that better aligned with my skills, and experience. It wasn't long after that I was given a generous offer from this new opportunity, and it has worked out very well thus far. The thing that impressed me the most was that I had reached out to them to apply for one opportunity, and not long after, I actually received an offer for another one instead. I honestly appreciate this attention to customer service, and look forward to working with them in the future.”
Here’s what some of our candidates had to say:
“DevTalent is being run by very experienced and smart people. They are always on top of everything and along with regular feedback with candidates, they are amazing mentors who can help answer any questions you may have regarding the role, interview, process, etc. Their experience helped me connect with my new company. It was one of the most memorable and smooth interviewing process, from start to finish.”
Options For Building Your Toronto Engineering Hub
There are options for US venture-backed startups looking to hire software engineers in Toronto or set up a Toronto software engineering hub.
Set Up A Canadian EntitY
First, you could set up a Canadian Entity, but it’s a slow process and a more cost-intensive option. There are also tax and liability considerations when opening up a foreign subsidiary. There is a much heavier lift with this option, requiring legal, accounting, and other professional expertise specific to Canada. This can be a good option for organizations that have determined there will be a long-term commitment to having a Canadian presence.
Set Up Employer Of Record (EOR)
If you do not own or want to establish a Canadian entity, you need an EOR. Your EOR handles the legal employment of your workers in other countries via a service agreement, without your business having to set up a legal entity in Canada. On paper, the EOR is the employer.
Sometimes, EORs are confused with Professional Employment Organizations (PEOs) and the terms are used interchangeably. However, there is a key legal difference – a PEO is a co-employment relationship which means the people that you hire are still your employees; whereas an EOR is the single legal employer. With a PEO, you still must have a legal entity in Canada.
You can think of a PEO as a partner to which you outsource part of your administrative HR processes, and an EOR as a partner who handles HR processes and takes care of your legal and compliance obligations when hiring abroad.
What’s The Difference Between an EOR and Professional Employer Organization (PEO)?
PEOs handle HR functions for businesses
EORs employ workers on behalf of their client companies
PEOs are typically not involved in employment contracts
EORs immediately allow your company to employ workers around the world
EOR can also provide all the HR services your business needs
Benefits of an EOR
No need to set up a Canadian entity
Takes care of compliance documents
Faster, less administrative & legal burden
Better success rate over hiring contractors
More control over organizational policies
Allows organizations to “test the waters” in Canada before making a commitment to set up a Canadian entity
DevTalent has partnered with Borderless to offer EOR services that will allow startups, SMBs, and Enterprises to use DevTalent for not only finding engineering talent, but also seamlessly and compliantly pay their international workforce.
Finally you can hire contractors, but this option creates roadblocks like:
Harder to establish company culture or identity
Quality contractors are more difficult to find and most established companies are hiring software engineers as full-time employees
Not a scaleable, long-term solution
For short-term projects or non-permanent work, contractors might be your best bet. However if you are truly looking to expand your software engineering team in Toronto and consider it important to your overall growth plans, hiring contractors is not an ideal option.
Scale Smarter With DevTalent
At DevTalent, we scale high performing software development teams with an engineering-centric approach to recruiting, developing and retaining teams.
Our team has recruited, developed and retained teams for a myriad of US venture-backed startups based in New York, the Bay Area, and across the country. We are experts in fine tuning engineering teams with the right mix of talent, process and tools to ensure optimal velocity, code quality and long term sustainability.
If you’re thinking about tapping into the Toronto talent pool: