Recruiting Software Engineers in Canada, the United States, the United Kingdom and Ireland

Recruiting Software Engineers in Canada, the United States, the United Kingdom and Ireland Demand for Software Engineers in Calgary Software engineers have been identified as a high-demand occupation in Calgary, based on the Calgary Labour Demand Forecast 2012. 1 In 2010, there were approximately 2,000 software engineers in the Calgary labour force. Between 2010 and 2020, demand for these workers is expected to increase by about 3 per cent annually, resulting in a total labour demand for over 2,700 workers in 2020. Employers will likely face difficulties recruiting qualified workers for both newly-created jobs and existing positions that become vacant. During the global economic slowdown of 2007-2009, 33 per cent of Calgary s software engineer employers recruited for the occupation and nearly half (48 per cent) of those who attempted recruiting reported experiencing hiring difficulties. 2 The combination of growing demand and limited supply are likely to result in shortages of software engineers in Calgary over the next decade. In order to meet the growing demand for software engineers, Calgary employers may need to access labour markets outside of Calgary, including international labour markets, to meet a portion of their hiring needs. To facilitate targeted recruiting efforts, Calgary Economic Development (CED) has created this guide to identify the best cities and regions for recruiting workers in Canada, the United States, the United Kingdom and Ireland. Top cities and regions for recruiting are recommended based on the size of the software engineering labour force and the likelihood that workers will migrate out of the area. 3 Top Locations for Recruiting in Canada The Kitchener-Cambridge-Waterloo Census Metro Area (CMA) ranks as the fifth-largest market for software engineers in Canada, 4 with about 1,400 software engineers in the labour force. This region may be attractive to Calgary employers if changes at the region s largest high tech employer, RIM, lead to future layoffs of software engineers. Wages in the Kitchener- Cambridge-Waterloo area were $35.09 in 2010, which is slightly lower than that of Calgary at $37.80 in 2011 and demographics of the labour force are favourable toward out-migration. Younger workers, foreign workers, immigrants and previous inter-provincial migrants all have a higher-than-average probability of making an inter-provincial move in the future; half of the 1 See Calgary Labour Demand Forecast 2012 2 See Alberta Wage and Salary Survey 2009 3 An out-migration probability index of workers is estimated based on a set of factors that are indicators of future migration. Factors include historical migration patterns, demographics of the occupational labour force, local economic conditions, median income, and the presence of foreign workers in the labour force. 4 Ranked 5 th, excluding Calgary 1

software engineer labour force in the CMA is under age 35 and 16 per cent are past interprovincial migrants or immigrants. Other attractive markets for recruiting include Canada s large cities as well as a few selected smaller markets. Toronto has the largest software engineering labour force with over 11,500 workers, which is more than twice the size of that of the second largest market, Vancouver, with about 5,000 workers. Ottawa and Montreal have a labour force of 4,300 and 4,100 software engineers respectively. All other metropolitan areas have less than 1,500 software engineers. Among the top-recommended cities (listed in Table 1), the labour force in St. John s has the highest percentage of software engineers under age 35 (77 per cent) and about half of all software engineers in Vancouver, Montréal, Kitchener and Halifax are under age 35. Thirteen per cent of software engineers in Vancouver are immigrants and 23 per cent have made an international or inter-provincial move in the past. Wages for software engineers range from a low of $26.80 per hour in St. John s NL to a high of $42.00 per hour in Ottawa. The mean hourly wage was higher in Ontario than in Calgary at $38.65 per hour in 2010. Wages in most cities in the Atlantic Provinces and Western Provinces are lower than that of Calgary. Information describing the labour force for software engineers in the top-recommended Canadian cities is presented in Table 1. See Table 2 for additional wage information in the top recommended cities. 2

Table 1 Recruiting Indicators for Software Engineers in Canada, by CMA Rank Census Metro Area Employment (2010) 5 Average Wage Per Hour Emigration Probability Index Under Age 35 (2010) Percent of Occupational Labour Force International or Non- Immigrants Inter-Provincial Permanent to Canada Migrants Residents (5 Year Period) 6 2001-2006 (2006) 1 Toronto 11,526 38.65 102 42% 17% 13% 3% 2 Vancouver 5,055 n.a. 102 50% 23% 13% 5% 3 Ottawa 4,319 42.00 102 33% 7% 5% 1% 4 Montréal 4,147 34.50 102 51% 15% 11% 2% 5 Kitchener- Cambridge- Waterloo 1,435 35.09 102 51% 16% 7% 4% 6 Edmonton 941 35.32 101 44% 17% 7% 0% 7 Hamilton 641 38.65 102 46% 9% 9% 2% 8 Halifax 503 34.00 102 51% 23% 0% 9% 9 St. John's, NL 261 26.80 104 77% 6% 0% 0% 10 Victoria 366 34.40 102 49% 19% 4% 0% Calgary 2,019 37.80 101 33% 13% 5% 1% *See footnote 3 for additional information about the Emigration Probability Index. Note: Data is measured for Census Metropolitan Areas unless otherwise noted. Figures for Calgary may differ from information presented earlier in this report describing labour demand for the Calgary Economic Region. Sources: Labour Force Survey, 2006 Census of Canada, RDA Global, Labour Market Information - HRSDC WorkingInCanada.gc.ca Table 2 Wages for Software Engineers in Canada, by CMA Census Metro Area Provincial Wages Recent Wage Range (CAD) or Salary, 2005 7 Average Reference Low Wage High Wage Median Average Wage Year Toronto 25.00 38.65 52.69 2010* 80,190 85,815 Vancouver n.a. n.a. n.a. 69,279 77,264 Ottawa 29.27 42.00 55.71 2010 80,190 85,815 Montréal 20.00 34.50 48.00 2008 70,121 73,031 Kitchener-Cambridge-Waterloo 23.80 35.09 49.98 2010 80,190 85,815 Edmonton 28.85 35.32 43.12 2011 71,867 77,670 Hamilton 25.00 38.65 52.69 2010* 80,190 85,815 Halifax 20.00 34.00 40.00 2010 62,673 76,816 St. John's, NL 21.45 26.80 40.00 2010 n.a. n.a. Victoria 24.39 34.40 45.39 2011 69,279 77,264 Calgary 25.24 37.80 63.46 2011 63,202 72,349 Note: Data is measured for Census Metropolitan Areas unless otherwise noted. *Wage data reflects provincial average. Sources: 2006 Census, Labour Market Information - HRSDC WorkingInCanada.gc.ca 5 Figures for employment in Calgary are for the Calgary Economic Region. Figures for other cities are for the census metropolitan area (CMA) 6 International and inter-provincial migration statistics are analyzed based on data collected in the 2001 and 2006 Census. The data required to analyze this migration pattern for the most recent 5 year period is not available at the time of this analysis. 7 Calgary median annual salary is calculated based on average hours worked per week and median hourly wage rate reported in the 2009 Alberta Wage and Salary Survey. The average annual salary is the actual figure from the survey. figures for other cities in Table 2 are from HRSDC. 3

Top Locations for Recruiting in the United States In the United States, there are two occupations that are closely aligned with NOC 2173 Software Engineers. They are: SOC 15-1132: Software Developers, Applications, and SOC 15-1133: Software Developers, Systems Software. Four of the top 10 recommended US cities for recruiting software engineers are located on the West Coast (Seattle, San Jose, San Francisco, and Los Angeles). Other recommended cities include Dallas-Ft. Worth, Denver, Chicago, Atlanta, Washington DC, and Boston. Calgary employers will need to consider workers salary expectations when recruiting software engineers in the US, and may be required to offer higher salaries than the Calgary average in order to entice workers to relocate. The average annual salary for software engineers in the US is higher than the average of workers in Calgary (USD $93,668 compared to CAD $72,349, respectively). 8 The top 10 cities listed in Table 3 are recommended for recruiting, provided that Alberta employers are able to meet workers salary expectations. See Table 4 for additional wage information in the top recommended cities. Of the top-recommended cities, workers in Seattle and Denver have the highest out-migration probability index scores. About a third (32 per cent) of all software engineers in Seattle are non-us citizens and nearly half (46 per cent) are under age 35. Microsoft, the largest employer of software engineers, hires a large number of workers sponsored on H1B visas. H1B visa holders who have been working for over seven years but are unable to obtain a green card (permanent residency) in the US may be interested to consider relocation to Calgary before their work permits expire. This may also be true in San Jose where 42 per cent of software engineers are non-us citizens. Compared to the West Coast, median annual salaries for software engineers are lower in Denver, Chicago, and Atlanta. These cities have a relatively smaller labour force of software engineers (ranging from 17,000 to 23,000 workers), but Chicago and Atlanta both have higherthan-average unemployment rates at 9.6 per cent and 9.2 per cent respectively. 9 8 See Bureau of Labor Statistics Occupational Employment Database and Alberta Wage and Salary Survey 2009. 9 As of September-November 2011 4

Table 3 Out-Migration Indicators of Software Engineers in Top 10 US Cities, 2010 Rank Metro Area Number of Pct. of who are Non-US Citizens Age Pct. Of Under Age 35 Out- Migration Probability Index Unemployment Rate Sept-Nov 2011 1 Washington, DC/MD/VA 60,600 15% 42 31% 116 5.4 2 Seattle-Everett, WA 37,690 32% 37 46% 123 8 3 San Jose, CA 47,040 42% 39 39% 118 9.2 4 Boston, MA-NH 50,360 22% 41 32% 114 5.7 5 Los Angeles-Long Beach, CA 38,030 21% 41 35% 117 10.7 6 Dallas-Fort Worth, TX 30,550 22% 41 31% 118 7.4 7 San Francisco-Oakland-Vallejo, CA 29,060 31% 39 35% 118 8.7 8 Denver-Boulder, CO 21,050 11% 42 27% 119 7.9 9 Chicago, IL 22,530 24% 40 37% 116 9.6 10 Atlanta, GA 17,440 21% 40 31% 118 9.2 United States 878,200 20% 41 34% 117 8.2 *The Out-Migration Probability Index gives an indication of the number of workers in the target occupation in each metropolitan area that have made an interregional move in the past 5 years. The index also reflects factors that may affect worker migration, such as historical migration patterns, demographics of the occupational labour force, local economic conditions, median income, and the presence of foreign workers in the labour force. US Average Out-Migration Probability = 100 (for all US workers in all occupations). Table 4 Wages of Software Engineers in Top Ranked Cities for Recruiting in the United States, 2010 Metropolitan Statistical Area Hourly Wage** (USD) Salary** (USD) Lower 10% Median Salary by Quartile (USD) Lower 25% Median Washington, DC/MD/VA 60,600 $49.92 103,839 64,580 81,054 102,118 124,815 147,745 Seattle-Everett, WA 37,690 47.61 99,038 70,687 81,238 95,754 114,597 137,686 San Jose, CA 47,040 57.55 119,711 74,746 97,126 120,864 145,132 n.a. Boston, MA-NH 50,360 48.55 100,970 67,156 80,924 99,117 119,723 141,524 Los Angeles-Long Beach, CA 38,030 46.55 96,828 59,101 76,219 96,339 118,006 139,278 Dallas-Fort Worth, TX 30,550 46.63 96,984 63,106 78,042 95,212 114,548 134,872 San Francisco-Oakland-Vallejo, CA 29,060 51.00 106,064 67,620 85,422 105,133 126,997 147,124 Denver-Boulder, CO 21,050 44.89 93,382 60,141 73,246 92,285 111,418 133,822 Chicago, IL 22,530 44.70 92,970 54,393 72,566 91,212 111,758 138,161 Atlanta, GA 17,440 45.32 94,258 56,009 71,265 89,371 109,677 137,283 United States 878,200 45.04 93,668 57,242 71,951 90,547 112,860 137,520 Calgary (in $ CAD) 2,019 $37.80 $72,349 n.a. **Source for Calgary wage and salary figures is the 2009 Alberta Wage and Salary Survey. Results are updated every 2 years. At the time of this analysis 2011 figures were not yet published. US Data Sources: Bureau of Labour Statistics Occupational Employment Database, American Community Survey, US Census 2010. Analysis by RDA Global. Upper 25% Upper 10% 5

Top Locations for Recruiting in the United Kingdom and Ireland In the United Kingdom and Ireland, the occupations most closely related to software engineers are: UK SOCs 2129 Engineering professionals n.e.c. and 2132 Software professionals, and IE SOC 2132 Software engineers. In 2010, there were approximately 265,000 software engineers in the UK labour force and approximately 17,500 in the Irish labour force. Software engineers relocating to Calgary from the UK are likely to experience an increase in income. The average annual income for software engineers in the UK was about 38,000 in 2010 (approximately CAD $60,400). Officially-reported income figures for Irish software engineers are not available, however, salary ranges presented in Table 5, which are based on unofficial salary surveys for software engineers and related occupations from several online career planning websites, indicate that salaries range from a low of around 22,000 (CAD $30,000) to a high of 60,000 (CAD $82,000). In the UK, the top regions for recruiting are London and the surrounding South East Region (which includes Greater London, Brighton, Oxford, Portsmouth, and Southampton). These areas have a combined labour force of about 100,000 software engineers. The highest level of historical out-migration is from London. London also has the greatest number of non-british citizens in the labour force (28 per cent) and one of the highest unemployment rates in the UK (9.9 per cent in September November 2011). By comparison, Irish software engineers are slightly less likely to out-migrate than are workers in London, and only about 10 per cent of software engineers in Ireland are non-irish citizens. Table 5 contains information on the size and characteristics of the UK labour force for software engineers. Regional data is not available on the labour force in Ireland but a national recruiting strategy in Ireland can be effective, due to the small geographic size of the country. Foreign Credential Recognition Under Alberta's Engineering, Geological and Geophysical Professions Act, a worker must be a registered member of the Association of Professional Engineers, Geologists and Geophysicists of Alberta (APEGGA) to practice as a Professional Engineer (P.Eng). do not have to be registered if they work under the direct supervision of a Professional Engineer and do not call themselves a Professional Engineer. Information Systems Professional is a protected title under Alberta's Professional and Occupational Associations Registration Act. This means that to oneself an Information Systems 6

Professional, a worker must be a registered member of the Canadian Information Processing Society of Alberta (CIPS Alberta). The worker does not have to be registered they do not call themselves an Information Systems Professional. When recruiting software engineers in the UK and Ireland, Alberta employers who wish to hire a Professional Engineer (P.Eng) are advised to consult APEGGA to determine which workers are most likely to meet the requirements for licensure in Alberta. Employers wishing to hire an information systems professional are advised to consult with CIPS Alberta (www.cips.ca). Information on foreign credential recognition for engineers in the UK and Ireland is available from the Alberta Department of Human Services at: http://www.albertacanada.com/immigration/working/occupations.aspx Table 5 Salary Range for Software Engineers in Ireland, Selected Websites Euro CAD Low High Low High Glassdoor.com 32,000 60,000 $43,685 $81,909 Payscale.com 21,699 48,081 29,622 65,638 Averagesalarysurvey.com 35,000 60,000 47,780 81,909 Calgary Average Salary, 2009 $72,349 Sources: Glassdoor.com s salary range for Hewlett-Packard Software Engineers in Ireland; Payscale.com s salary range for Software Engineer/Developer/Programmer Jobs; Averagesalarysurvey.com s 2011-2012 survey for Software Engineer/Developers in Ireland. Average month-end annual 2010 exchange rate: 1=$1.3652 CAD. 7

Table 6 Recruiting Indicators for Software Engineers - UK and Ireland, 2010 Rank Region/ Country Major Cities Number of Percentage of who are Non- National Citizens Percentage of who are Non-EU Citizens Median Age* Pct. Of Under Age 35 Out- Migration Probability Index** 1 London Greater London 53,000 28% 18% 35 47% 113 40,293 $64,100 46,038 $73,240 2 South East Brighton, Oxford, Portsmouth, Southampton 55,000 14% 10% 37 39% 108 39,636 63,056 41,905 66,665 3 Eastern Greater London, Cambridge, Norwich, Peterborough, Ipswich 28,000 11% 5% 39 34% 106 38,047 60,528 39,100 62,203 4 South West Bristol, Bournemouth, Plymouth 24,000 9% 6% 40 35% 107 36,034 57,325 37,795 60,127 5 North West Manchester, Liverpool, Preston, Blackpool 23,000 4% 3% 38 35% 106 35,813 56,973 38,651 61,489 6 West Midlands Birmingham, Coventry 20,000 8% 5% 39 35% 106 35,457 56,407 36,086 57,408 7 Yorkshire & Humbersid e Leeds, Sheffield, Bradford, Wakefield, Hull 17,000 9% 6% 37 40% 106 33,055 52,586 35,210 56,015 Glasgow, Edinburgh, Scotland 8 Aberdeen 17,000 13% 4% 37 39% 105 38,025 60,493 41,017 65,253 9 East Midlands North East Median Income 2010 (GBP) Median Income 2010 (CAD) Income 2010 (GBP) Income 2010 (CAD) Nottingham-Derby, Leicester, Northampton 13,000 6% 2% 38 31% 105 36,200 57,589 36,744 58,455 Sunderland, Newcastle upon Tyne 5,000 11% 5% 35 48% 106 30,193 48,033 29,403 46,776 10 Total UK 265,000 14% 8% 37 39% 108 36,563 $58,167 37,982 $60,424 Total Ireland 17,500 10% 3% 44 29% 110 See Table 5 Calgary 2,019 n.a. 33% n.a. $72,349 *British data source reports median age figures, while Irish and US data sources report mean age figures. ** Out-Migration index scores for the UK are not directly comparable with those of cities in the US or Ireland. Sources: Quarterly British Labour Force Survey, Survey of Hours and Earnings (UK, 2010), Central Statistics Office Ireland (2010), Analysis by RDA Global. 8