Recruiting talent across borders allows businesses to grow in ways that would not be possible domestically. However, cross-border recruitment can also introduce several business complications. Companies in the United States may find Canada appealing due to its internationally educated workforce, shared business customs, and close geography. Still, recruiters must adjust their efforts to meet legal and cultural hiring and employment needs. That’s where the complicated part comes in, but it’s not undoable.
According to the Conference Board of Canada, Canada is committed to ongoing education and improving the skillsets of its workforce. Studies show that Canadian workers rank among the most educated in the world. Over half of the country’s adults are estimated to have post-secondary education. This means the Canadian workforce is an excellent talent pool for specialized positions across many industries—technology, finance, health care, engineering, and more. It also means these workers are at the cutting edge of advancement and can meet various company needs.
The Legal Climate for Cross-Border Recruitment
Before implementing any cross-border recruitment to hire Canadian talent, companies must understand the legal climate. The employment laws in Canada differ from those in the United States in the following categories:
Employment Standards Act
In many Canadian industries, provinces set employment standards rather than the federal government. Thus, companies must understand each province’s requirements where their employee resides. For example, Canada has different employment standards (sometimes different in every province) regarding:
- Minimum wage
- Overtime
- Statutory holidays
- Vacation entitlement
- Termination notice
This means companies based in the United States need to know the Employment Standards Act requirements for the provinces where their employees live. For example, the Employment Standards Act of Canada does not cover the same topics as the Ontario Employment Standards Act, which means employers must have a province-by-province policy system to stay compliant. This can be complicated for those companies in the United States that want to hire multiple Canadian employees from different provinces. However, cross-border recruitment is not an impossible task, and for the right company, it can bring significant benefits through the talent it attracts.
Privacy Laws
The Personal Information Protection and Electronic Documents Act (PIPEDA) protects Canadians by specifying how private sector businesses must collect, use, and disclose personal information during commercial activities. The Office of the Privacy Commissioner of Canada requires employers to obtain candidates’ consent for collecting information and to disclose how they will use, store, and share that information during recruitment. This approach meets Canadian workers’ privacy expectations and helps U.S. companies build strong connections with potential Canadian talent.
Canadian Recruitment Strategies
Effective cross-border recruitment requires strategies tailored to Canada’s cultural and market differences for attracting the right talent:
Canadian-Specific Messaging for Cross-Border Recruitment
All messaging related to recruitment should appeal to the target Canadian talent pool:
- Use Canadian spelling (“labour” vs “labor”)
- Display salaries in CAD
- Mention any Canadian certifications/degrees
- Provide details about benefits offered in Canada (extended healthcare coverage after probation, maternity/paternity leave, etc.)
These aspects are critical because they show prospective employees that the company they’re interested in values its workforce, addresses different countries’ expectations and needs, and presents important information in terms understood locally, such as CAD rather than USD.
Compliance and Sourcing Talent in Canada
Ensure compliance in your cross-border recruitment when sourcing Canadian talent from the following sources:
- Indeed Canada and Workopolis are prominent job boards. Canada’s version of Craigslist also houses many postings
- LinkedIn is often used for social and professional roles
- Many associations by industry have job boards
- Many colleges and universities have co-op programs for undergraduate students looking for professional experience
According to the Canadian HR Reporter, almost three-quarters of Canadian job seekers use online job boards to find their next role, giving employers easy access to the right talent.
Employment Structure Options
Companies based in the United States also have several cross-border recruitment options for employing Canadian workers:
- Direct Employment: Establishing a subsidiary or branch in Canada
- Professional Employer Organization (PEO): Creating a co-employment situation
- Independent Contractor Arrangements: Hiring on a contractor basis
Each option operates under disparate requirements relative to the hiring process for companies based in the United States. Over half of the companies that chose to expand into Canada utilized PEO services to employ their first staff in Canada, exploring market potential while meeting compliance needs.
Tax and Payroll Complications
Cross-border recruitment can lead to complex taxation issues. For example:
- Canadian employees need proper tax withholdings sent to the Canada Revenue Agency
- Companies based in the United States need payroll registration and a business number
- Cross-border payroll needs specific processing
The Canada-United States Tax Treaty offers significant legal opportunities to avoid double taxation, but it’s better to consult professionals to ensure all payments are above board.
Competitive Advantage by Awareness of Culture
Legal factors that concern compliance with cross-border recruitment extend beyond legalese to professional sensitivity:
- Canadians value work-life balance more than Americans
- Canadian firms tend to communicate in a less-direct style than Americans
- Interprovincial variances (Quebec is French-Canadian vs. Western Canadian provinces)
Firms that hire and remain culturally aware have more successful engagement with candidates.
Strategic Approaches to Canadian Recruitment
With cross-border recruitment, companies can easily tap into Canada’s pool of highly qualified candidates. Yet, for companies based in the United States to hire Canadian talent successfully, they must:
- Understand provincial employment regulations across Canada
- Ensure hiring is legal and appropriately arranged
- Adjust hiring efforts for a specific Canadian hiring environment
- Foster an awareness of cultural differences
Once they understand the legal and cultural aspects of the process, U.S. companies can successfully recruit Canadian talent and build long-term employment plans. Recruitment strategies across borders can give companies the edge they need in a difficult hiring market.
Companies can streamline cross-border recruitment by partnering with Canadian third-party employment law and hiring specialists. Contact BrightR today to learn about our services and how we can help your business!
