June 14, 2021
As he was dealing with COVID’s impact on sales and office planning Alykhan Jetha (AJ) started to feel the impact of a sudden pandemic-era talent squeeze.
In over 20 years running a Canadian software company, Alykhan Jetha (AJ) has weathered a lot of storms – from the dot-com bust, to 9-11’s blow to business confidence, right up to the sales hit of the COVID-19 pandemic. But the biggest threat he’s ever seen to his business, is how his pipeline for software engineers has utterly dried up.
“This is nothing like we’ve ever experienced,” says the CEO of Toronto-based Marketcircle Inc., maker of the Daylite Mac Customer Relationship Management (CRM) and business productivity app. “And I’m hearing the same thing from other Canadian software CEOs. It’s scary. A year ago, we’d get 40 to 50 applications a month to our developer job posts, and 10% or more of them would be good candidates. Today it’s more like one or two resumes per month, and the candidates don’t have the required skills. We need six senior Apple platform developers, like yesterday.”
At the beginning of the COVID-19 pandemic, Jetha had other things to worry about. His Mac-based CRM typically sells to companies of 1-100 people in creative agencies, legal offices, and other professional services firms. “Not to be immodest, but because our customers use Daylite to maximize their productivity, they were better prepared than many small businesses,” he said. "We lost some to bankruptcies or retirements, but we gained just as many new teams. Overall I’m thankful our revenues have grown despite the COVID chaos.”
Then there was Jetha’s new office lease on the 18th floor of a Toronto high-rise. “We were about to sign a lease during the week of March 15th, 2020, the week of the first COVID lockdown in Ontario, for occupancy on July 1st” he said. “We were looking forward to a higher profile office in a central location. But as COVID progressed we realized an elevator-access, high-rise office was the last place we wanted to send our people. So we didn’t sign the new lease, and while we already had a lot of remote workers, everyone started working from home.”
As he was dealing with COVID’s impact on sales and office planning, Jetha, who leads product development at Marketcircle, started to feel the impact of a sudden talent squeeze. “Our software development team has been very stable over the years. We do challenging work and have fun doing it. But our product road-map requires six more people. Frequent job postings even a $10,000 referral fee to our own staff to bring in their friends hasn’t produced candidates.”
Marketcircle’s quest for technical talent also competes with US companies. In an increasingly location-independent COVID world of home offices, US software companies have dispensed with geographic location restrictions, and realized that hiring in Canada saves them about $20,000 per job on healthcare benefits. “Tech firms in the Bay area or Boston used to bias recruiting to their local areas, but now they’ll hire someone in Toronto with almost no hesitation,” stated Jetha, “and pump the health insurance savings straight into salaries we have to match.”
Marketcircle’s CEO is also facing digital mega-trends. The acceleration of the digital economy has created fresh demand for software developers in non-traditional “dirt, rocks and trees” sectors like farming, mining and forestry. A more pernicious issue is continued declining enrolment in Science, Technology, Engineering and Math (STEM) programs.
According to Statistics Canada’s latest Labour Force Survey released June 4, employment in the professional, scientific and technical services sector increased by 195,100, or 13.4% year over year from May 2020 to May 2021. This is against a national backdrop where overall unemployment is at 8.2% and total hours worked were 3.8% below pre-pandemic levels.
“I know there are huge challenges facing provincial and federal governments right now,” said Jetha. “But as vaccines go into arms and we come out of a state of lockdown, I believe there’s a role for governments to put in policy and even incentives to keep STEM talent growing and working in Canada. The alternative isn’t pretty.”