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5 Times Transferring an Employee to Canada Isn’t the Right Move

Nov 4, 2020 | Business

According to a recent study, close to 63% of employers surveyed by Envoy are increasing their presence in Canada either by sending more workers there or hiring foreign nationals. Canada has essentially made it easier for American businesses to invest in the country by creating immigration policies that are much more favorable to U.S employers than the U.S policies. 

Canada is also considered a crossroads between North America and the lucrative Asian markets. Indeed, every company that wants a piece of the pie knows too well the importance of having a visible presence in the country. However, there are times when American companies need well-experienced hands in Canada to meet organizational demands but transferring their employees is just not the right move.

Such occasions include:

When the Expansion Isn’t Visible

For any business, expanding to a foreign market is a hallmark of achievement and pride and signifies that the company strategy is bearing fruit. However, expansion remains risky even for the most diligent company. Despite a solid strategy, plans can go wrong beyond the management’s control. Expansion is also a capital intensive undertaking, and without adequate financing, it can be unsustainable. If a business currently has a little presence in Canada, and there are no plans to expand further in the near future, there is no justifiable reason to send more staff to Canada.

Room for Negotiating a Fixed Contract

Fixed-term employment refers to a contract where a company hires an employee for a specific period. Most fixed contracts last for one year, and once the contract is over, the parties are free to renew it. In a fixed contract, the employee is not on the company payroll, and their payout is fixed in advance and cannot be altered until the term expires. If you are undertaking a project in Canada and can negotiate a fixed contract, there will be no need to bring American expats to Canada. A fixed contract is best for giving out jobs that are only temporary, and thus makes more sense to get local talent than bring over American employees.

If Hiring Remote Labor Makes More Sense

Hiring the right people is a mantra that every successful business values. A business cannot afford poor skills match when entering a foreign market in pursuit of growth strategy. But if you can find local Canadian brand ambassadors who can effectively help usher your company into a new era, there is no need to bring American talent. Besides, hiring from local talent pool signals to potential clients that you are one of them and ready to support the local economy. Also, your company might be eligible for financial incentives if you hire locally. 

The Hiring Process Is Complicated

Moving an existing employee from America to Canada means you have to hire a new replacement. Sometimes the hiring process may not be easy. Typically, there are several steps involved when filling a vacant position. These include updating and posting a job description, reviewing resumes, screening and interviewing, checking references, and so on. According to SHRM, it takes more than 42 days to fill a vacant position. If the re-hiring process is long and complicated, it may be counterproductive moving a permanent employee to Canada, especially if the project involved is only temporary.

The Cost Is Higher Than the Benefits

Replacing an entry-level employee can cost up to 50% of their annual salary. The figure can rise as much as 400% when looking to fill vacant positions left by leaders and highly skilled employees. If the cost of replacing an American employee that you moved to Canada is higher than the benefits, you need to reconsider the move.

Over the past few years, many American businesses are expanding north to open subsidiary offices and branches in Canada. Canada has a pro-business climate, vast natural resources, a highly skilled labor force, competitive corporate tax, and a profitable local market that makes it an ideal place for American companies looking to expand.  Consequently, with such growth and expansion, there are times when companies need American expats to oversee operations in Canada. However, as enumerated in this piece, companies need to conscious of the times when such a move is considered unwise.


At BrightR we help companies outside Canada hire top talent in Canada. Also, if one of your top employees has moved to Canada, you do not have to lose them. We can help them work remotely for your company while in Canada. Contact us today for more information about our human resource solutions. 

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