The current state of hiring is at a crossroads. Layoffs across Canada and the United States are hitting a wide range of industries amid geopolitical turmoil and economic uncertainty. However, you’d be surprised how many companies are still hiring – they are just looking somewhere else to do it.
Major companies, like Netflix, Google, Thales, Tether, and Microsoft, are looking abroad to secure their talent. This is spurred by many factors, including a drive for efficiency and profitability, as well as disruptions from factors like scrutiny of the United States’ H-1B visa.
Canada has typically been a hotbed for international hiring, due in part to lower operating costs. The current global market shifts will have an impact on economic growth, job creation in Canada, and ultimately the ability of Canadian companies to compete globally.
To better understand what’s really happening beneath the surface of today’s labour market, we spoke with Borderless AI CEO Willson Cross, whose company helps organizations hire and manage employees across international borders.
Layoffs dominate headlines, yet many companies are still hiring. What is actually happening beneath the surface of the global hiring market right now?
WC: Domestic layoffs in both the private and public sectors have occurred over the last few months. Just recently, the federal government announced multi-year cuts to government staffing. In January, Canada’s economy lost 25,000 jobs, but the unemployment rate declined slightly to 6.5 percent, overall steady and stagnant with previous months.
And, Canada is not the only one, with western economies, the United States, the United Kingdom, and France see hiring declines between -22% to -30%.
But companies are still hiring. In search of the best talent, companies’ hiring pools are no longer wholly centred around homegrown talent. A trend that started during the pandemic, as teams became increasingly virtual, geographic borders were no longer a huge barrier, contributing to the adoption of global hiring. This is one trend from the pandemic that has stuck, with companies still embracing global teams, hiring talent from India, the Philippines, and Brazil.
This has expedited as tech companies search for the best candidate to address emerging technologies and a way to ease their bottom lines. Companies are turning to Employer of Record (EOR) platforms to make global hiring as easy as possible. As the CEO of Borderless AI, I’ve seen how EOR platforms like ours are helping companies simplify all aspects of managing international work, from onboarding to payroll to legal compliance. EOR platforms are becoming a key part of companies’ global expansion strategy.
Why are large companies increasingly looking abroad for talent instead of hiring domestically?
WC: Companies are always going where the talent is. For smaller Canadian companies, cost is a factor, but Canada’s tech ecosystem needs top talent to compete on a global scale, yet we are grappling with a worker shortage. For example, the Canadian Chamber of Commerce has cited the need to fill positions in STEM and other highly skilled areas as an economic driver, but struggling to do so amid a shortage of talent.
A few reasons have contributed to Canada’s lower output of tech talent in the last few years. A large factor is Canada’s post-secondary education landscape, which was a traditional pipeline for international students to enter Canada’s job market and fund highly skilled research areas in STEM. With international student caps, schools are already seeing the decline in funds – graduate schools have reported declines in STEM already. And this pipeline is directly impacting Canada’s ability to attract and retain highly-skilled Canadian immigrants.
A worker shortage, coupled with a decline in funding for research in key areas, is leading companies to turn to global hiring to fill the specific, highly specialized roles.
How is U.S. immigration policy – particularly H-1B visa scrutiny – influencing global hiring strategies for both American and Canadian companies?
WC: Similar to Canada’s international student caps, restrictions on importing talent into acountry doesn’t lead to more home-grown talent getting hired, despite government promises. If companies can’t bring the talent in, they’ll just go where the talent is, and the US H-1B visa is a great example of this.
According to Rest of World, large American companies are increasing hiring in India rather than attracting talent into the U.S. According to the University of Pennsylvania, for every H-1B rejection, companies hire 0.4-0.9 employees abroad.
Tech talent has always been a global hiring pool, with many companies opting to bring talent into their larger, established offices in the U.S. and Canada. With more barriers, companies don’t want to sacrifice the quality of candidates, and global hiring is a solution.
For Canadian businesses, does the rise of global hiring represent a threat to local jobs or an opportunity to build more competitive, globally integrated teams?
WC: Hiring in Canada’s tech ecosystem has always been a global pursuit, finding ways to draw in talent to meet demand. With further restrictions and a more difficult market to foster Canadian immigrant talent at home, tech companies have adapted by going where the talent is.
Inadequate education and funding streams across Canadian provinces are a larger threat to Canadian jobs than global hiring. International hiring offers a cost-effective solution and ensures we can find the highly-skilled talent that will keep Canadian companies competitive on a global stage.