How Pay-for-Performance Can Improve Employment Outcomes for Syrian Refugees

How Pay-for-Performance Can Improve Employment Outcomes for Syrian Refugees
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Canada is now home to tens of thousands of Syrian refugees. To integrate into Canadian life and to earn a living, many of those Syrian refugees want and need work. Yet most, at least in their first year, do not find work.
Immigration, Refugees and Citizenship Canada (IRCC) funds organizations across the country that deliver employment services to newcomers. IRCC funds these service providers based on the activities they complete rather than on the outcomes they help newcomers achieve. IRCC asked the MaRS Centre for Impact Investing (MCII) to investigate how IRCC might pay service providers based on outcomes. This report outlines our research and recommendations.
Syrian refugees, many of whom speak little English and have limited education, must overcome many hurdles to find jobs in Canada. First and foremost, they must learn English, both general English and English specific to their work. They must also adapt to Canadian workplace culture, develop networks nearly from scratch and, for some jobs, recertify to meet Canadian standards. Service providers attempt to cover all of these needs; however, with only so much money and a difficult labour market, they cannot accomplish as much as they would like.
Pay-for-performance (PFP) could help solve some of these problems. Under a PFP agreement, IRCC would either pay for a service provider’s program based entirely on its outcomes or pay for it based in part on its activities and in part on its outcomes. IRCC and the service provider would jointly decide on the outcomes, targets and payments before the service provider began the program. IRCC may permit the service provider to run the program without a strict activities schedule and without expenditure reports. The service provider may thereby have the flexibility to adjust its program to meet its outcome targets.
PFP can funnel more money to programs that prove their value. The model can also spur more extensive partnerships between service providers and employers. And it can reveal data and insights that may help the employment integration system better serve its constituents.
We propose three PFP projects to improve employment outcomes for Syrian refugees. These projects require more work and input before they can become reality. We have specified the type of work and input required. The following table summarizes the three proposed projects.
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