Vancouver Tech Firms Migrate to B.C. Interior
Traction on Demand among companies opening offices in West Kootenays
Traction on Demand’s average worker is 32 years old – right at that age when people often settle down, buy homes and start families.
“What we’ve started seeing was a little bit of an interesting migration, actually, of our team members moving to smaller communities,” said Greg Malpass, CEO and founder of the technology company employing about 250 workers in Metro Vancouver.
This spring Traction on Demand begins following workers to B.C.’s bucolic bastions in a bid to retain and attract employees feeling squeezed by high housing prices.
A new office will open in Malpass’ hometown of Nelson, B.C., where an initial “pod” of 10 workers – half of whom will be hired locally – will be based.
The CEO’s vision is to partner with nearby Selkirk College and expand the remote office to a full “squad” of 25 workers.
“There’s a few other small towns that we’re going to be activating quite quickly,” said Malpass, whose software firm helps companies implement marketing strategies using the Salesforce.com Inc. customer relationship management service. “The goal is to build small towns into squads.”
Malpass said any business advantage lost through smaller economies of scale will be regained by keeping workers who no longer find Vancouver to be the right fit.
Tech entrepreneur Brad Pommen, who moved to Nelson eight years ago from Alberta, said it won’t be difficult to recruit tech talent in the West Kootenays.
He founded the Nelson Tech Club shortly after his move, building it up to 500 members, of whom 20 to 50 meet every week to hear presenters discuss topics like artificial intelligence and find out who’s hiring locally.
“You’ve got this lifestyle and technology mix that makes Traction on Demand very [suitable],” said Pommen, the lab director at Metallurgical Industrial Development Acceleration & Studies (MIDAS), an applied research, commercialization and digital fabrication training facility in neighbouring Trail, B.C.
Meanwhile, Nelson-based Pacific Insight Electronics Corp. announced in early October it was laying off part of its workforce, placing workers on the job hunt.
“There are a lot of talented people in that facility that would be directly [qualified] but there’s also a great pool from other regions that also might be shifting where they’re living now,” Pommen said.
Software company Thoughtexchange, in Rossland, B.C., launched in the city five years ago.
Its head count has since ballooned from about a dozen to about 80 workers.
And the i4C Innovation Centre, an innovation hub and commercialization facility, has built up a team of about a dozen workers since opening last year near Trail’s airport.
“It was kind of quiet and slowly growing but in the last two, three years quite a few of us have startup companies that have grown into something,” said i4C Innovation CEO Pilar Portela, who oversees a 46,000-square-foot industrial internet of things lab and testing facility.
The Columbia Basin Trust invested millions in building a fibre optic network in the region, providing access to high-speed internet for companies and residents and making it more practical for tech companies to launch in the West Kootenays.
“If you understand how to do business using remote technologies … then you would be able to succeed anywhere,” Portela said.
She said lower overhead costs for tech startups and lower housing costs for workers have also been driving growth in the region.
“In the case of Traction on Demand, it is some of the pressures here in the Lower Mainland on housing and on childcare,” Jobs, Trade and Technology Minister Bruce Ralston told Business in Vancouver.
The average Multiple Listing Service price for a home in the Kootenay region sits at $319,000 compared with $1.05 million in Greater Vancouver, according to the BC Real Estate Association’s third-quarter forecast.
But Pommen noted that access to housing and commercial real estate can be hard to come by in Nelson’s core, where Traction on Demand plans to open.
Malpass said there are tentative plans to operate out of the local Royal Canadian Legion and support veterans through training and education.
As for overhead costs like salary, the CEO said he knows he can’t ask current employees to take a pay cut if they choose to relocate but the company may “slow” those particular workers’ wage growth for a period.
“I don’t know what’s going to come around the corner and surprise our business,” he said. “The most powerful part of our business is … in how our team will respond to things we don’t expect. If we can’t keep people on board for two or three years, we’ll lose that.”