Though a foreign company's plan to hire more than 1,000 people in a tight job market may worry other employers, the arrival of tech consulting company Cognizant in Nova Scotia could represent a net benefit for startups, observers have said.

Martha Casey, CEO of Halifax startup hub Volta, said in an interview that her understanding of Cognizant’s plans suggests direct overlap with the startup talent pool will be minimal, although she warned that her firsthand knowledge of the deal is limited.

She foresees Cognizant becoming a pipeline for skilled workers to enter the IT sector and gain experience, before moving on to more complex startup jobs after they gain experience.

“If Cognizant is hiring product leads, and your tech leads and developers, for sure, there's going to be an overlap,” said Casey. “But that just wasn't my understanding of what Cognizant is doing.”

Cognizant, based in New Jersey, said Jan. 18 it will open a branch office in Halifax and hire up to 1,250 people over seven years. The announcement came at a time when Atlantic Canadian startups have said they are struggling to fill job openings for skilled technology workers.

In an email, Cognizant’s Canadian Head of Delivery Centers, Jay Macisaac, said the company is hiring “IT professionals of all levels, including developers, analysts, quality assurance, cloud engineers, to project managers, and more.”

The new tech workers will be paid with the help of “payroll rebate agreements” backed by industry group Nova Scotia Business Inc.

“A payroll rebate is an earned incentive, paid out yearly after a company achieves pre-determined targets,” says NSBI on its website. “The rebate is a return on a company’s eligible gross payroll.”

Casey said one of the problems Volta’s member companies face is not just a shortage of talent writ large, but a shortage of specialized talent.

“There’s experience, and then there’s the right skills,” she said. “The ‘senior challenge’ is obviously an issue… But as I'm sure you see, the talent crunch is going way beyond those tech and engineering jobs.

“We're seeing it in communications, you see it in accounting — across the board.”

Casey, who previously worked in the administration of then-New York City Mayor Michael Bloomberg, said she sees one path to addressing the labour shortage as being policy changes to make it easier for businesses to recruit skilled immigrants.

“I don’t want to be one of those horrible people that says, ‘Here, I’ve got a solution to everything,’” she said. “But I do believe there could be some way to de-risk hiring employees from abroad.”

She cited immigration-related administrative burdens as a key obstacle for startups, along with the tendency of tech workers to switch jobs often, and mused about whether an initiative similar to the federal government’s Temporary Foreign Workers Program might be helpful for startups.

Ian Munro, Chief Economist at the Halifax Partnership economic development organization, said he agreed with Casey’s expectation that Cognizant could become a talent pipeline for the technology sector, calling it “very sensible.”

He added that Cognizant’s plan to hire its roster of new employees gradually over several years will dramatically lessen any resulting pressure in the labour market.

And the presence of a company as internationally notable as Cognizant in Halifax has the potential to raise the city’s profile and draw the attention of people who may not otherwise have considered working in Halifax.

“You know, what we want to do is have companies come here and establish themselves and create good paying jobs,” said Munro. “That's all wonderful stuff — great to have Cognizant on board.

“I know people kind of focus on the headline number (of planned hires)… But they’re not going to be filling all these positions on Monday.”

And Munro also noted that periods of tightening and loosening labour markets are a normal part of economic cycles, and he believes the tech labour crunch will eventually resolve itself as employers, universities and workers adjust — a reference to the economics dictum that functioning markets tend to be self-correcting.

For example, while the demand for STEM workers has been growing across Atlantic Canada, so too has STEM enrolment at universities like Dalhousie. There, the Faculty of Computer Science has seen its enrolment more than double since 2016 — an increase of more than 1,000 students.

“There's always going to be a competitive market for labour, and firms will come and go,” said Munro. “But the pipeline is responding.”