How hard has BC’s technology industry been hit by the economic downturn? Or has the industry been gliding above it with ease? One way to tell is by looking at the hiring and compensation numbers.
Corporate Recruiters Ltd. recently announced the results of its Q3 survey of CEOs in all technology sectors, from which they received 114 responses. They found that all sectors reported improvements in revenue and profitability since the last quarter (the third straight quarter of growth), and 62% rated current business activity was “good” or “very good.” The Cleantech, New Media and Life Sciences sectors were leading with 83% – 85% that indicated business was “good” or “very good.”
“All in all BC’s technology community is in much better shape than many predicted it would be at this point,” says Don Safnuk, founder, President and CEO of Corporate Recruiters Ltd. “We will do one more survey at the end of Q4 which will give us a full year analysis.”
Overall optimism not driving improved compensation yet
Optimism was running high, too. 86% of respondents said that they expected business to be better in six months from now (up 2.5% from last quarter), and 61% said hiring was a priority (up from 11% from Q2).
However, 70% did not consider compensation issues to be a priority in the next quarter, possibly because candidate supply is still above the historic averages, although it is continuing to drop. Research and Development compensation, however, is experiencing an upward trend with 45% planning increases (most at 5% or less), while 49% will remain the same. For new hires two thirds plan to pay the same as existing staff while 17% hope to pay less.
Layoffs appear to have gone back to normal low levels in BC. The perception of candidate supply varied significantly depending on whether the respondents’ companies were laying off, hiring or maintaining their current staffing numbers. For example, a company laying off executives or not hiring sales people was twice as likely to presume supply exceeded demand than those who were actively recruiting.
Challenges include strong Canadian dollar, access to capital
“Customer facing roles, executive management and highly difficult technical searches are all very busy,” adds Safnuk.
“We believe this reflects improved economic conditions, challenges in finding specific skill sets and some catch up hiring. The survey reflected an improving climate but not to the same degree, perhaps not a surprise as it may not be reflected until the Q4 survey. “
Safnuk says almost 10% of respondents commented on the negative impact of the strong Canadian dollar, “and that certainly aligns with what we often hear.”
Other ongoing issues are the economic recovery and access to capital, although angel financings have been surprisingly strong. However, Safnuk feels that raising money may prove challenging for companies saddled with debt while trying to do an equity financing.