MONTREAL - Tech startup Hootsuite wants to hire 100 software engineers this year and it says it will be all but impossible to find them in Canada.
The Vancouver company, like other Canadian tech companies, is competing with San Francisco's Silicon Valley which regularly draws software engineers to work at heavyweights Google (NASDAQ:GOOG, Stock Forum), Twitter (NYSE:TWTR, Stock Forum), Facebook (NASDAQ-GS:FB, Stock Forum), Apple (NASDAQ:AAPL, Stock Forum) and LinkedIn (NYSE:LNKD, Stock Forum), and startup firms.
Hootsuite will likely have to recruit internationally to add to the ranks of its 80 software engineers, said Ambrosia Humphrey, the company's head of human resources.
"It's a bit of a brain drain,'' Humphrey said. "It's really difficult to compete with really highly funded Silicon Valley companies.''
Hootsuite's senior software engineers help build mobile apps allowing its customers to manage and measure their social networks.
It competes against recruiters, such as San Francisco-based Hired.com, which is looking for as many as 200 Canadian software engineers for Silicon Valley firms to hire.
Hootsuite's CEO Ryan Holmes has spoken out about the impact of Silicon Valley, saying Canada suffers from a growing shortage of computer developers and software engineers because the U.S. tech hub has claimed the best and the bright for several decades.
"In order to keep people here, we have to do a better job of promoting ourselves,'' said Humphrey.
For Matt Mickiewicz, co-founder and CEO of Hired.com, it's not a brain drain from Canada. He said it offers an opportunity for engineers to get work experience and connections in the venture capital community.
"Then they'll come back to Canada and utilize those skills to start new companies and mentor the next generation of up and comers,'' said Mickiewicz, a Canadian who has also opened up a Vancouver office for Hired.com.
He said the growing use of smartphones means there's a huge demand for software engineers who can develop mobile apps. He said it's not unusual to for annual salaries to run between US$140,000 to $160,000 to start, plus company stock, to work in the San Francisco Bay area, home to about 350,000 Canadians.
Hired.com said it narrows down the list of applicants for tech companies, and candidates usually get multiple offers from which to choose. They'll have the opportunity to work for firms such as mobile payments company Square, online vacation rental company Airbnb, online ticketing service Eventbrite and social networking giant Facebook, he said.
Analyst Kash Pashootan said there aren't enough big tech or startup firms in Canada to offer the same salaries or benefits.
"Even for the patriotic, diehard Canadian who insists on their startup being in Canada, in many cases the company gets to a point where it's forced to sell to a U.S. big tech firm,'' said Pashootan, portfolio manager at First Avenue Advisory in Ottawa, a Raymond James company.
He said 68 per cent of Canadian startups have been sold to U.S. companies in the past five years, citing the sale Halifax-based GoInstant's to Salesforce.com (NYSE:CRM, Stock Forum) for $70 million in 2012 . Bufferbox, which has kiosks for consumers to pick up online orders, was sold to Google for an undisclosed amount in 2012.
However, Pashootan said the Canadian government has made it easier for immigrant entrepreneurs with a visa program that links them to private sector organizations who are experts in working with start ups.
Also, the Ontario and the federal governments announced in January up to $100 million in a venture capital fund funding to invest in startup companies.
CEO Greg Isenberg brought his five software engineers from Montreal to San Francisco to help run his company, 5by, which developed an app that sifts through online videos and delivers them to users based on mood, social interests and time of day.
"I would say there's a top tier of talent that exists here that is unrivalled,'' said Isenberg, 25.
University of Waterloo is considered a feeder school to Silicon Valley and about a third of its software engineers head there after graduation.
Dean of Engineering Pearl Sullivan said she's not sure the movement of engineers can be called a "brain drain'' any more, as the tech marketplace is global in reach. And some of the engineers to return to Canada.