Aim  To examine an employer response to a government employment policy, the Nursing Graduate Guarantee (NGG), over a 2‐year period (2008–2009 and 2009–2010). Background  Healthcare organizations rely on a stable supply of nurses to meet their staffing needs. However, employment trends have indicated a propensity for part‐time employment. The NGG was created to stimulate full‐time employment of new graduate nurses in Ontario, Canada. Methods  A mixed methods design was used, which included online surveys and focus groups. All healthcare providers (n = 1198) were surveyed in 2008–2009 and 2009–2010. Each year, a sample of NGG employers participated in sector‐specific focus groups. Results  Approximately 20% of potential healthcare employers participated in the NGG. Reasons for non‐participation included lack of awareness of the initiative and lack of full‐time jobs. Barriers to offering full‐time employment to new graduates included lack of full‐time vacancies and budget constraints. Conclusions  Employers perceive flexible staffing practices as a way to contain personnel costs but often at the expense of a stable full‐time nursing workforce. Implications for Nursing Management  This research contributes to an understanding of employers’ perspectives on full‐time hiring and participation in a government employment policy.