For tech companies who are in the process of scaling up to take their business to the next level, employment law will be top of mind as they deal with complications surrounding employment agreements, immigration, retention and more.
Gowling WLG, a global law firm with offices in Vancouver, supports its clients in their success with practical legal advice and innovative solutions.
In its webinar series aimed at providing legal tips for tech scale-ups, the staff at Gowling WLG touches on topics including employee retention factors such as bonuses and equity, benefits, and more.
“Tech companies are especially vulnerable to employee turnover due to the often remote nature of their work,” says Kristen L. Cruise, an associate at Gowling WLG’s Vancouver office and a member of the firm’s employment, labour, and equalities group.
“In the tech industry, employees have a broad range of employers they can easily work with,” Cruise says.
Cruise advises and represents clients ranging from small business to multinational corporations in all areas of workplace law.
From her experience working with various clients, Cruise has seen first hand what works for retaining employees.
Competitive salary
“Pay is a big thing, especially if employees can work for a U.S.-based company that pays a higher salary,” Cruise says.
As American companies move into Vancouver’s burgeoning tech market and remote work provides access to global opportunities, it’s crucial for employers to stay competitive with the compensation that they offer.
“If you’re earning a competitive wage, you’re more likely to stay,” Cruise says.
That being said, money isn’t everything.
“We’re seeing a lot of reports from research firms that employees are saying that a bump in pay doesn’t make up for lack of work-life balance.”
Workplace culture
“Workplace culture comes up a lot,” Cruise says.
“Keeping employees happy is the biggest thing. There are various ways to do that, but one of the most important is creating a culture where the employee wants to work for you.”
While it can be challenging to create a unified workplace culture in a remote work setting, the flip side is that employees are looking for the flexibility that remote work offers.
“Employers are in a bit of a Catch-22,” Cruise says.
“What we are seeing more often now that COVID-19 restrictions have lifted is a hybrid model, where employees are expected to come in at a certain frequency to maintain a personal connection to the workplace but are able to maintain the flexibility that workers have become accustomed to over the past two years.”
Employers are offering more perks as well, including exploring a four-day work week, offering improved group health benefits, increased mental health coverage, paying for gym memberships and more in an effort to stand out.
Equity and bonuses
Retention bonuses have become more commonplace in the tech world, though Cruise questions their effectiveness.
“If someone really wants to leave, the money won’t keep them there. Especially if your retention bonus isn’t as big as a signing bonus they may potentially receive from their new employer,” Cruise says.
A financial incentive that is more likely to inspire an employee to stay is to offer equity with a vesting schedule.
“That employee potentially becomes a shareholder in the company which creates a lasting connection to the company’s success that will encourage them to stay,” Cruise says.
Restrictive contracts
Using restrictive covenants to encourage employees to stay is another option, Cruise says.
This typically involves the use of non-competition clauses that can bar employees from working in a similar field for a certain period of time if they leave the company. Non-solicitation clauses can also discourage employees from leaving by preventing them from taking other employees and clients along with them.
“However, these are not easily enforceable and must be very carefully drafted,” Cruise says.
To learn more legal tips to help your tech scale-up succeed, watch the latest on-demand webinar from Gowling WLG.
