In April, Royal Bank of Canada walked head-first into a PR firestorm when news broke that it was terminating more than 40 IT employees and replacing them with temporary foreign workers employed by the multinational outsourcing firm iGate Corp., which has most of its operations in India.
That a major Canadian corporation—not to mention Canada’s largest bank—was outsourcing jobs in the IT field was nothing new. The practice has been occurring for years across industries and is a trend that will continue.
The reason the RBC story raised the ire of so many Canadians was because it shone a spotlight on alleged misuse of the federal Temporary Foreign Worker Program (in this case, to outsource IT jobs for which there were many qualified Canadian workers).
The program allows companies to hire skilled workers from overseas if they can prove there is a lack of equivalent skills in the Canadian market. Employers must also prove that hiring from abroad won’t negatively impact the domestic labour market. Canadian jobs, the program’s rules state, are not to be put at risk as a result of foreign hiring—a practice which is common, and often necessary, in sectors such as agriculture and construction.
When news of RBC’s move broke and the backlash spread across the country, the bank’s CEO Gordon Nixon apologized and offered comparable positions to IT employees affected by the outsourcing move, while also promising to keep client call centres in Canada. The federal government also took action, eliminating provisions that in some cases allowed employers to pay temporary foreign workers up to 15% less than the industry average wage and forcing employers to demonstrate their intent to transition positions to Canadian workers. In addition, employers will be required to pay an application fee that will presumably cover the cost of acquiring Labour Market Opinions—an application process to confirm that having a foreign worker employed in a specific position will not have a negative impact on Canada’s labour market.
But what does this flurry of news around the Temporary Foreign Worker Program mean for the average Canadian SME owner, particularly those operating in provinces where workers may be tough to find, such as Saskatchewan or Alberta?
From an employment-law perspective, not much. The program still exists and will allow employers to acquire talent from abroad. The most significant change is that it will now likely take longer, involve more red tape and cost more than before—and government scrutiny will be far more stringent.
As always, an employer’s decision to hire from abroad will hinge on strategic business objectives. But it’s important to remember that this is still a developing story and, as scrutiny mounts, Temporary Foreign Worker Program rules may shift even further. That’s where it pays to think proactively about compliance and carefully weigh the potential costs and benefits of tapping the program.
With that in mind, here are three questions to ask before seeking help from abroad:
Can we source talent locally?
Many employers assume after searching for qualified talent for a prolonged period that it simply doesn’t exist in Canada. In some cases they
may be right, but not always. The talent may, in fact, be available, but finding the right people could take a bit more creativity and research.
For example, a company looking to hire software developers skilled in emerging technologies that may not be readily found among candidates in the Canadian job market—but which are widely available in countries with strong IT sectors such as India or China—may be able to recruit directly from local university programs or participate in university co-op programs where students learn those highly-coveted skills. Canada’s growing base of skilled retirees presents another opportunity for companies to recruit employees with a unique skill set—many of whom are both knowledgeable and interested in part-time or project-based work. Lastly, though many new Canadians are highly skilled, their rate of employment in job-appropriate positions tends to be low. That creates opportunities for employers to source talent from a local and experienced, yet largely untapped, talent base.
Do we have the HR personnel and legal expertise to successfully navigate the process?
In the wake of Ottawa’s move to tighten program rules, the process of recruiting, hiring and managing temporary foreign workers will require increasingly sophisticated work on the part of HR professionals.
Equally important is the issue of quality control. While many companies thrive and grow with temporary help from overseas, we’ve seen clients that have regretted this move. The reason: they don’t always get the calibre of workers they need or expect because conducting due diligence to confirm a foreign worker’s qualifications and capabilities is complex, labour-intensive and may extend beyond their company’s capabilities.
That’s why it’s crucial to carefully analyze the experience, resources and expertise of your in-house HR team and assess their ability to effectively tap the benefits of the Temporary Foreign Worker Program. If they lack the skills—or you lack an HR team in the first place—it may make sense to build your own team of specialists consisting of an HR consulting professional and a specialized recruiter or lawyer to help ensure full legislative compliance and to vet foreign talent in the earliest stages of the recruitment process.
How will the move impact our company culture and engagement levels?
In an era when attracting, recruiting and retaining top employees is so important to Canadian SMEs—especially those operating in talent and knowledge-driven sectors—maintaining a strong company culture is crucial. Introducing temporary foreign workers can be a growth driver, but the short-term nature of their employment can also be culturally disruptive.
Ultimately, these employees will exit the company and return to their country of origin. Employers looking to hire temporary workers should ensure that they have a strong communications plan to explain the nuances and expectations of their culture and help temporary foreign workers integrate with existing staff. And they should also prepare a strategy to deal with the turnover resulting from the temporary workers’ inevitable departure.
In short, using temporary foreign workers can be an effective tactic to acquire critical skills needed to grow, but not before taking the time to understand how the program may affect your workplace culture.
Laura Williams is an employment lawyer and founder of Williams HR Law in Markham, Ont. She has more than 15 years experience providing proactive solutions to employers aimed at reducing workplace exposures to liability and costs that result from ineffective and non-compliant workplace practices.
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