Although marketing, sales, and financing considerations still drive corporate decisions, most companies are no longer constrained by the size of the market or access to capital. Instead, they are constrained by the ability to build a sustaining culture that uses the talent of its people.
Sophisticated international organizations understand that when dealing with human capital, geographical boundaries are not barriers. They certainly do not inhibit the quest for required talent.
The quest for international and American talent continues in situations where Canadian organizations wish to expand markets into the United States, or when an American job candidate possesses specific experience or exposure not found in Canada.
However, talented people have the same needs universally and the same incentives tend to attract them. Successful incentives work when they are synchronized around individual incentives, career goals, enterprise challenges, rewards based upon success and commensurate cultural behaviours of the enterprise. As a result of Canada’s market size, some Canadian companies have not been able to obtain experienced executives, and must look out of the country to their southern neighbour to find it.
Canada’s selling points
The first task is convincing Americans that greener pastures lie to the north.
It may prove difficult to “sell” American executives on the Canadian business culture, since they are accustomed to lower taxes, less-expensive product lines, more abundant and larger corporate offices and greater job opportunities in the United States.
However, an emphasis on the authentic Canadian social and community culture may encourage a move north. Safe neighbourhoods, multicultural tolerance and prosperity, a polite population and great restaurants (you can easily compare Toronto with New York City) are Canadian assets admired across the globe. Canada also offers world-class arts and theatre communities, well-funded research and science laboratories and lower costs for post-secondary education.
These high community standards are accompanied by accessible and affordable health care for all, easy access to American markets and cities and a strong capitalist orientation balanced with a socially responsible society. And, when all else fails, snowcapped winter holidays are always aesthetically captivating.
Immigration rules and taxes
When American executives are recruited by Canadian companies, common issues confronted by the hiring organization include:
•customs and immigration in a post-9/11 world;
•currency exchanges; and
The first three issues, immigration, tax and currency differences can often be dealt with in a rational way by immigration and tax lawyers.
Most often, to bring in a foreign national, employers must ensure that jobs are first posted in Canada and that no other Canadian is suitably qualified for that position. This is a fair practice as it reflects due diligence and rigour to a company’s hiring process.
It is essential that Americans moving to Canada are well aware of the tax differentials, including city-to-city, state-to-state and country-to-country. For example, local taxes in most Canadian cities rival those found in high-tax American cities, such as New York and San Francisco. Executives moving from American cities with lower tax margins need to be aware of such discrepancies in their new locales.
In addition, as exchange rates remain volatile, it is important to communicate salaries, bonuses and other monetary compensation in Canadian currency, emphasizing the potential for continuing changes in currency valuation before an employment contract is signed.
The fourth challenge, cultural transition, is the most important requirement because it is a major “change event” and if not properly managed can derail the placement.
Cultural issues for Americans will apply to the Canadian experience
Companies need to be aware of several issues before relocating an American executive to Canada, as the move will affect the candidate’s life and career, the relationships of peers and subordinates, and the culture of the organization.
When hiring and transferring an American to Canada, businesses are not just moving an individual — they are often moving a family. Moving a family cross-culturally may have more implications than moving state to state in the U.S. The spouse may be happily employed with an American company, the children may be attending a school they love and undoubtedly they have a strong network of friends and family. All of these items need to be addressed when moving executives. Companies recruiting executives from international locations often help the new employee find jobs for the respective spouse, schools for children and in many cases houses for the family to reside in.
The U.S. and Canada, contrary to popular American beliefs, have very different cultures. Employers should manage moves to Canada to mitigate the risks associated with such a transition to ensure successful “onboarding” of the American. While 90 per cent of the Canadian population lives within 160 kilometres of the U.S. border, Canadian communities are still very different. Think of the cultural adjustment of moving to Quebec City versus Edmonton. Productivity and success of a new hire can be adversely affected if the individual is distracted by family issues, immigration issues and temporary financial situations such as banking.
After the new American employee is on board, the most important requirement is to keep them motivated and successful. Consider meeting regularly with all new executive hires for their “first 100 decisions.” This can assist individuals from different cultures in making an easier and more effective transition. Peers, superiors and subordinates should observe early decisions and actions of the new leader to determine issues in cultural immersion.
The issues around employment integration are universal to all immigrants and expatriates. A quarter of all new hires in Canada are “new Canadians,” drawn from the pool of more than 250,000 new immigrants a year — about one per cent of the Canadian population. The need to integrate people from other countries is an imperative that extends to American recruits.
When considering the relocation of an American executive to Canada, it is imperative to be aware of the cultural integration and how the executive ultimately will benefit and support the company’s business plan, core values and performance in the marketplace.
Sussannah Kelly is a managing director of Boyden global executive search, and a founder of the Boyden Institute in Toronto, a consultancy specializing in human capital, organization strategy, corporate governance and board effectiveness. She may be reached at firstname.lastname@example.org.