Small business group welcomes EI revamp

An organization of small Canadian businesses said they are happy with the government’s plans to make sweeping changes to the country’s Employment Insurance eligibility rules.

The revamp would mean the removal of “disincentives” for unemployed workers to seek jobs and greater access to workers for many small businesses, according to Catherine Swift, president of the Canadian Federation of Independent Businesses (CFIB).

“We believe the changes to defining suitable employment, based on how freaquently EI is claimed will help remove disincentives to work and hopefully make it easier for small firms to find the people they need,” Swift was quoted in an interview with the Globe and Mail.

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She said that in the first quarter of 2012, the CFIB found that 46 per cent of its members were having trouble to find employees with the skill they need.
She said about four per cent of their members have brought in foreign employees as temporary workers. “They only did it as a last resort, and they wouldn’t if they were able to hire someone who was local,” she said.

Technology businesses for one have historically reported difficulties in finding suitable tech workers.

For instance, the Information Technology Association of Canada (ITAC) reports that it is facing a tech talent gap which some studies place at around 106,000. “We don’t feel that at the moment we can fill this gap with local talent, so many firms are looking to hiring foreign trained workers,” said Lynda Leonard, senior vice-president of the organization.

The ITAC is hopeful that recent improvements in government programs to help streamline the recruitment of workers from abroad will alleviate the problem.

Under the current system, 22 per cent of small-business owners said they’ve had potential hires that turn down job offers saying they would rather stay on EI benefits, the Globe and Mail reported. Another 16 per cent said they had an employee ask to be laid off to be able to collect benefits, she said. “Employers agree that EI should be there for those who lose a job through no fault of their own, but do not accept that the system should be used as some form of paid vacation or ongoing lifestyle for those who choose not to work.”

The new EI policy’s requirement that people who have been unemployed for a long period take “any work”– even if in some cases that requires taking up to a 30 per cent pay cut – could backfire, said Karen Fischer, a partner with small business consultancy RK Fischer & Associates, in Uxbridge, Ont.

“The problem is that a lot of small employers are not willing to hire people who will take a pay cut of 20 per cent of their income and a lesser title, because there’s a risk the hire is just taking a job until another that pays more comes along,” she told the Globe and Mail.

She said the new EI rule may actually increase that risk because it could make people feel they were coerced to move to get a job they hadn’t considered taking.

At the same time, the added nudge to get back to work could be an eye opener for people frustrated in their job hunts, Fischer suggested.

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