Canadian SMBs shy from government hiring incentives

Canadian small to mid-sized businesses (SMBs) are lukewarm when it comes to the federal government’s efforts to boost job creation in Canada, according to a new survey.

In the 2013 federal budget, the government introduced measures like the Employment Insurance Hiring Credit and the Canada Job Grant to bolster hiring in the workforce.

But in a survey of 605 SMBs polled in May, only three per cent of SMBs polled said these two programs would encourage them to hire. Another 61 per cent said the Canada Job Grant had no impact on their business, and 49 per cent said the same about the Employment Insurance Hiring Credit.

Business software provider Sage North America released the survey on Wednesday, polling SMBs from several different sectors, including construction, manufacturing, distribution, and retail.

Lauren Friese, co-founder of TalentEgg Inc., said her company is considered an SMB, but she would probably never even think about applying for the grants. TalentEgg specializes in online job postings for students and recent graduates.

“Ask any small business owner if they have time to fill out all the stupid paperwork that the government makes you do to do any of that stuff, and they’ll say no. I don’t even know if [the Canada Job Grant] applies to us, and I’d rather spend the time that I would have to spend researching, filling out and hopefully winning something like that on actually winning business instead,” she said.

“Small companies are resource-constrained … I’d rather any sort of stimulus to encourage more usage of the product that I sell than something that helps me hire more people.”

The survey also found 19 per cent of SMBs said they had hired or were planning to hire more employees during 2013. That was down from 31 per cent in 2012.

Out of the businesses that were planning on bringing aboard new talent, 77 per cent said their choice was guided by a stronger demand for products and services. Twenty-three per cent said they felt more confident about the economy, while 11 per cent said they were attracted to a qualified talent pool.

Among the eight per cent of businesses that had decreased or planned to decrease their workforce, or the 55 per cent that wouldn’t make any changes, 40 per cent said they were experiencing steady or lower demand for their products and services. Twenty-two per cent felt unsure about the economy and another 22 per cent were eyeing costs and trying to keep them low.

In an email, Nancy Harris, senior vice-president of Sage 50 Accounting in Canada, said analysts had reported SMBs might be battening down the hatches in case there is economic trouble ahead.

“In the 2008 to 2009 recession, there was less confidence in the economy, so people perceived they would be hiring less,” Friese added.

“My only guess is that we were on a high of recovery from the economy and people were very hopeful, and now we’ve kind of settled at a kind of equilibrium point of hiring,” she said. “The economy is growing, not shrinking … [but] it’s all about perception.”

Ted Mallett, chief economist at the Canadian Federation of Independent Business (CFIB), noted SMBs’ responses might vary based on the time of the year. CFIB’s own surveys show different highs and lows, based on monthly estimates, he said.

Mallet added that no two companies are alike, but almost universally they’re more concerned with the level of demand driving their business than with hiring or with government incentives.

“What’s still happening is that businesses are not considering this a normal climate yet,” Mallett added. “But they certainly understand that having the right staff … is important, so they want to make those kinds of investments in the short term so when demand does come back, then they’re prepared for that.”

Would you recommend this article?


Thanks for taking the time to let us know what you think of this article!
We'd love to hear your opinion about this or any other story you read in our publication.

Jim Love, Chief Content Officer, IT World Canada

Featured Download

Candice So
Candice So
Candice is a graduate of Carleton University and has worked in several newsrooms as a freelance reporter and intern, including the Edmonton Journal, the Ottawa Citizen, the Globe and Mail, and the Windsor Star. Candice is a dog lover and a coffee drinker.

Featured Story

How the CTO can Maintain Cloud Momentum Across the Enterprise

Embracing cloud is easy for some individuals. But embedding widespread cloud adoption at the enterprise level is...

Related Tech News

Get ITBusiness Delivered

Our experienced team of journalists brings you engaging content targeted to IT professionals and line-of-business executives delivered directly to your inbox.

Featured Tech Jobs