Canadian employers are being required to take on further costs, this time in relation to potential employees. How? Through the federal government’s 2013 budget, released March 21.
In the budget, the government declared it would be reshaping the existing Labour Market Agreements that currently provide funding for skills and job training to underemployed Canadians who are ineligible for employment insurance. Instead of leaving the allocation of this funding for skills training up to the provinces and territories, the budget envisions it being allocated in response to labor market demand through the new Canada Job Grant.
Canada Job Grant
Under the planned grant, the federal government would make available up to $5,000 per person toward training at eligible institutions. The catch? This grant will require matching funds both from the province or territory involved and employers. After the addition of the provincial and employer contributions, a worker could have up to $15,000 for skills training before he or she starts a job. Employers that plan to train new or existing workers for skilled jobs themselves will be eligible to apply for the grant.
The details of how the Canada Job Grant will be implemented are still to be worked out through negotiation with the provinces and territories with input from employers and employer groups. The new grant will go into effect in 2014, giving employers time to assess their labor market needs and whether they should budget for their own investment in the skills training of prospective workers.
How should employers prepare?
In the lead-up to 2014, Canadian employers will need to assess how the program fits with their business and how to handle getting invested in workers before they even have the skills necessary for a position. Questions employers should ask themselves include:
- Does my business face a skilled labor shortage?
- Are my needs short- or medium- to long-term?
- Would training someone be time- and cost-effective compared to my current solution (e.g., hiring foreign workers or chronic overtime)?
- Should I promise employment to a worker before he or she is qualified? Can I make it a binding agreement?
- What if a person whose training I helped pay for fails to qualify or refuses to work for me?
Much will depend on the shape that the new Labour Market Agreements take and how well employer concerns are integrated into the grant program. One thing for certain — Canadian employers will need to be ready for the complications sure to arise from this type of up-front investment in the workforce and the uncertainty of it yielding direct returns.