An Easy Way to Encourage Businesses to Hire Marginalized Workers? - OZY | A Modern Media Company

An Easy Way to Encourage Businesses to Hire Marginalized Workers?

An Easy Way to Encourage Businesses to Hire Marginalized Workers?

By Neil Parmar


Because this program could help capable job candidates — and corporate America.

By Neil Parmar

OZY and JPMorgan Chase & Co. have partnered to bring you an inside look at how entrepreneurs and their good business are helping the communities around them. Enjoy the rest of our special series here.

If you’re a business owner looking for a loan, then have I got a deal for you. It includes the chance to lower your interest rate along with — free! — recruiting help in finding your next all-star employee. Sound too good to be true? Then you’ve probably never heard of a “rate drop rebate.”

Here’s how the program works: Each time a business owner hires and retains for six months a new disadvantaged worker — such as a refugee, an indigenous individual, a person with a disability or someone who’s been unemployed for a long time — they receive a cash-back rebate equivalent to 1 percent of the interest rate on their loan. Not bad given rising interest rates, eh? The government then covers the cost of these rebates, which works out to less than it would pay out in unemployment benefits, and public employment service centers refer qualified job seekers to business owners with open gigs. There’s some other fine print, of course, but those are the nuts and bolts.

A bold approach like the rate drop rebate has never been rolled out in the U.S.

Such an ambitious program is already being tested in Canada. One of the nation’s largest banks, CIBC, along with other financial institutions and credit unions, started offering rate drop rebates last year across the cities of Hamilton, London and Ottawa, Ontario. The program is still in a pilot phase, but it builds on a similar business loans program that found work for more than 480 job seekers and aims to support up to 1,100 job hunters this time around. “We know it’s really going to make a difference for businesses and increase opportunities for very capable people who sometimes face challenges getting work,” Brad Duguid, Ontario’s Minister of Economic Development and Growth, tells OZY in a statement.

So, America, could this type of a partnership ever work south of the Ontario border, say, in helping certain coal miners, military vets or others who’ve struggled to secure work of late? For decades, state, local and federal governments in the U.S. have tested market-based incentives for hiring, and encouraged businesses to take on additional workers, particularly those from disadvantaged groups. Yet most programs have focused on offering tax credits and job-training subsidies. A bold approach like the rate drop rebate has never been rolled out in the U.S., but it has the advantage of “providing more immediate and direct financial return to the business,” says Michael Bernick, a former director of California’s labor department, the Employment Development Department, and counsel to Sedgwick law firm. “It certainly seems like a more cost-effective approach than job subsidies,” Bernick says.


Be sure to test this idea before going big and bold across multiple states. So far in the Canadian pilot, banks have been reluctant to promote the concept on computer dashboards of loan officers — so it isn’t always raised as an option to business owners. Even so, employment service centers have only referred an average of 1.6 job candidates to each business that shared an opening. In other words, “we can’t fill demand,” says Bill Young, founder of Social Capital Partners, the Toronto-based nonprofit that developed the rate drop rebate program. “We’re not getting the quality candidates.”

One possible solution: Somehow incorporate private online job boards into this multipartner process, where most openings are posted anyway and where many disadvantaged workers look during their job hunts. Such steps should help ensure that rate drop rebate programs are a win-win for employers and job seekers. How else might you help get more disadvantaged workers employed?

This editorial article was originally created by OZY Media and published on prior to, and independently of its inclusion in this JPMorgan Chase & Co. sponsored series. OZY Media claims the full rights and responsibilities of this article.

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