CANADA’S BIG BANKS ARE RACING TO SCOOP UP TECH TALENT.
With Canada’s technology sector creating jobs faster than workers can train to fill them, the country’s biggest banks are racing to scoop up talent as COVID-19 puts a premium on tech skills.
The pandemic forced people to work, study and shop from home, increasing demand for technology and tech talent. As the banks racked up record levels of excess capital and startups scaled on gargantuan valuations, the demand for developers, engineers and data analysts spiked. Financial institutions are investing in acquiring that talent.
“There’s definitely more competition than there has ever been,” said Shawn Rose, chief digital officer and executive vice-president at Bank of Nova Scotia.
“With the pressure between technology companies, other large financial institutions and the vibrant startup ecosystem, there’s a lot of competition. We’re seeing that there is plenty of talent, but we’re trying to hire not just at scale, but for quality.”
Many of the banks are exploring new office spaces, work setups and development opportunities to entice tech talent to their ranks. More than four years after Scotiabank opened its Digital Factory — a 70,000-square-foot tech hub on Toronto’s King Street East with Ping-pong tables and a bowling alley — the bank is opening a second location in the city’s Harbourfront Centre neighbourhood. Royal Bank of Canada launched a new innovation hub in Calgary in July, with plans to onboard hundreds of workers into new tech roles.
While the trend is not new — Canada’s banks have launched a variety of digital innovation hubs and tech labs over the past decade — the dash to hire tech workers is causing banks to adjust their talent strategies and digital hub setups, and it comes at a time that startups and corporate tech teams are also scrambling to fill new roles.
At Canada’s banks, tech demand surged as the pandemic forced the lenders to connect hundreds of thousands of financial service workers from home offices and dining room tables while navigating complex transactions online with customers unable to visit branches and meet in boardrooms.
Meanwhile, tech startups that benefited from the shift to remote have garnered a wave of investor interest in public markets and private funding, ushering in a wave of Canadian unicorns and initial public offerings — and many of those companies plan to use the proceeds to grow their teams.
Fintechs — financial technology startups — are gearing up to grab market share. Three of the top 10 venture capital-backed funding rounds in 2020 were raised by fintechs, the most in any category, according to a report by the Canadian Venture Capital & Private Equity Association.
Those fintechs are competing for the same pool of candidates. Toronto fintech startup Clearco raised a total of US$315 million this year to reach unicorn status, and is using the funds to grow its team of 380 employees, which had already doubled in size over the past year.
Startups in other sectors are ramping up their teams as well. Montreal health-care software provider Alaya Care Inc. raised $225 million in June, and plans to grow its 470-person team, hiring 300 more staff over the next two to three years. Vancouver legal software company Clio, which became a unicorn after raising US$110 million in April, said it could hire 250 people to increase its 575 person team by 40 per cent this year.
“As we talk to founders, their No. 1 issue, No. 2 issue and No. 3 issue is talent,” said Chris Albinson, chief executive of Communitech, Kitchener-waterloo’s tech innovation hub.
“There’s an exponential growth curve, the likes of which we’ve never seen in Canada before.”
Technology jobs postings have sprung up across Canada, climbing in six of the country’s eight major markets over the past year by an average of 16 per cent, according to a report from commercial real estate firm CBRE.
Toronto experienced the highest brain gain of any city in North America, adding 54,862 more tech jobs than graduates since 2015.
Overall, cities across Canada posted more brain gain than most U.S. markets. Montreal and Vancouver ranked third and fourth after Seattle, Edmonton came in sixth and Ottawa in eighth.
With a wave of job openings, the flashy perks of the past are not enough to sway potential hires. Workers are prioritizing flexibility and customization with where and how they work over onsite cafeterias and games.
Scotiabank’s upcoming Habourfront location looks and feels significantly different from its predecessor, eschewing the Digital Factory’s bowling alley and Ping-pong tables, which were predominantly used after hours when employees had downtime or when their children visited the office, Rose said.
“The development of those sorts of things were at the forefront of people’s thinking five or six years ago, and are probably less important today,” Rose said. “Those types of things are overrated, and are a small part of our talent environment.”
The new space will operate on a hybrid model, with flexible seating arrangements and workers visiting the office on certain days each week. Employees also have the option to work from the Digital Factory in the city’s east end as well.
As an extension of the Digital Factory, Scotiabank sought a location that was closer to the downtown core and Bay Street office towers, as well as Union Station to give employees a shorter commute.
“It’s going to be quite different from the Digital Factory,” Rose said. “Work is changing, and the way that people are interacting with the space is a little bit different.”
Employers are looking at other growing tech markets across the country as well. Royal Bank of Canada plans to hire 300 tech employees in the next three years at its new Calgary Innovation Hub, adding to the lender’s 1,500 personal banking, capital markets and wealth employees in the city.
The positions at the site, scheduled to launch in September, would work on a hybrid model once the bank reopens offices, and span “high-demand areas,” including artificial intelligence, data engineering, full stack agile software delivery, site reliability engineering, machine learning and data analytics.
Calgary has struggled with high commercial vacancy rates, but technology has been a bright spot for the province, generating jobs and attracting increased venture capital and private equity investment.
“With the growth in Calgary of the tech sector, this was the right place to put a technology hub that would allow us to create meaningful and sustainable tech careers,” said Jules Andrew, senior vice president of strategy, transformation and enterprise operations at RBC.
Beyond the innovation hubs and new office spaces, recruitment teams have had to adjust their tech talent acquisitions strategies entirely. Candidates are asking for details on the types of projects they will work on, and how their role contributes to innovation across the organization, according to Scotiabank’s vice president of global talent acquisition, James Spearing.
The bank has also been scouting talent with less traditional tech backgrounds, targeting potential hires with diverse education and training backgrounds and enticing candidates outside of the Greater Toronto Area with remote or hybrid work options.
“We have had to adjust our strategy in terms of how we’re tapping into the market,” Spearing said.
“We’re enabling business leaders with more data around where the talent actually exists, where competitors are playing and our competitive strength. We’re shifting our approach to ensuring that we’re getting the best talent, fishing in the right talent pools and making sure our employee value proposition is aligned to what candidates are expecting, and that is shifting over time.”