Upgrading Your Work Force–Innovative incentive partnerships add value for everyone

An employer’s commitment between company and employee includes reasonable compensation, benefits and a safe and productive working environment. In many companies, that same obligation extends beyond rewarding hard work, ensuring that a foundation of both personal and professional growth is achieved.

Lifelong learning is an additional promise many companies have made to improve professional skill sets through on-going work-force training and skills development. This creates positive effects for both employee and community alike. Types of continuing education and lifetime learning opportunities include:

  • Business Process Improvement, Strategic Planning and Lean Manufacturing;
  • Manufacturing skills such as welding and inventory control;
  • Quality training: QS 9000/ISO 9001, Statistical Process Control and Continuous Quality Improvement;
  • Computer Training;
  • Safety and OSHA compliance training.

Elective Workforce Skills Training (or training not related to new hire orientation and basic skill training) can be an expensive proposition to any size organization. Public financial assistance has been available for many years; however funding levels have been unstable in many jurisdictions due to depleted tax revenue. New legislation, coupled with legacy training incentives and resources from the federal government has led to several significant retraining and skill development opportunities.

Federal Resources

Workforce Investment Act (WIA) funds are federal dollars allocated to states and local organizations to promote the training and skill enhancement of various sectors of society.

Benefits for job seekers, employers and incumbent workers are comprehensive and promote an increase in employment, job retention, earnings and occupational skills. Though a critical program established to improve the productivity and competitiveness of our work force, funding remains limited. For example, the 2011 allocation for the State of California was only $454 million. These funds cover services for adults, downsized workers and youth. With an embattled economy, state budget deficits and unemployment hovering around 12 percent (April 2011), these funds are stretched thin. Work together with a local workforce development representative to identify your company’s needs early and develop a training plan that partners local resources, such as a community college, to assist in your training efforts.

The 2009 Federal Stimulus Bill injected much need monies into the training pipeline, but only served as a temporary inoculation to a long-term needed for skill upgrading. Another program, Trade Adjustment Assistance (TAA), provides benefits to workers who become unemployed due to international trade. Although this program is geared more toward downsizing then retraining current work force, many opportunities exist to capture funds to close the financing gap of traditional training, including the cost of service providers.

State Resources

All states provide resources to train new and existing employees. In today’s business, political and economic environment, no two programs are created equal. In many instances, it is very difficult to compare apples to apples because the value in cash, cost avoidance and tax benefits varies so much.

Training needs vary between each company, type of industry and activity at a specific facility. Some businesses may only benefit from on-the-job training, while others find value in partnering with a local college to provide faculty and classroom resources. Most benefit from hiring, employee pre-screening and ongoing training assistance.

On-the-job training (OJT) allows a company to incorporate standard training best practices with the cost incurred somewhat, and in some cases completely, covered by financial assistance from a state training grant or fund.

Kansas provides a program, Kansas Industrial Training (KIT), which is easy to administer and is flexible to unavoidable changes in business priorities. esigned to offset the cost of training, funds can be utilized to reimburse costs for pre-employment, OJT and classroom training. Up to 100 percent of the cost can be reimbursed.

An issue for many organizations is the loss of wages for employees while engaged in training activities. For many companies, if an employee isn’t making, selling or adding value to a product or service, the company is losing valuable time and money. When incentive programs include the ability to reimburse or credit actual employee wages, this allows a business to increase its training efforts.

The Job Training Incentives Program (JTIP) offered by the State of New Mexico funds classroom and on-the-job training for, according to New Mexico statute, “newly created jobs in expanding or relocating business for up to six months.” The program reimburses 30 percent to 75 percent of employee wages while participating in training activities. This can lead to thousands of dollars of cash businesses can re-invest in equipment, facilities, and more jobs. JTIP is one of the most successful training incentives currently funded.

Florida has established two unique training partnerships, each geared to new and incumbent training that always remains employer-driven. Costs for curriculum development, instructor wages and materials are reimbursable with the Quick Response Training Program (QRT). Administration is a little bit more cumbersome than in other states; however do not overlook this very valuable tool.

Vocational Training

Skills related to specific trades are often available through a community college and/or vocational training system. These types of schools can offer particular skill set training, for example welding or pharmaceutical manufacturing technician, and directly assist with capturing incentives to help offset the cost.

Certain skills still need to be developed early. Communities are beginning to invest in their high school level learning.In Louisiana, St. Charles Parish established The Satellite Center, a facility where high school juniors and seniors pursue career goals by gaining valuable skills through certification programs. Curriculum supports local growing industries such as computer software design and the oil industry. Students graduate with the basic, and sometimes complex, skills which directly match work force needs at local businesses.

Businesses considering a state or community should discuss what opportunities exist for pre-certification and pre-training. Establishing a pipeline of newly skilled work force who already have basic skills creates a much needed cost avoidance for many organizations.

Other Public/Private Partnerships

Incentives extend much further than tax credits and reimbursable expenses. Other public/private partnerships exist to assist in the cost of recruiting talent.

The Registered Apprenticeship Program through the U.S. Department of Labor aids in the recruiting of new personnel and can support the activities of human resource staff. Registered Apprenticeship program sponsors (e.g. employers, employer associations and labor management organizations) vary from small, privately owned businesses to national employer and industry associations. Many occupations from Bio-Manufacturing Technicians to Engineering are applicable. A flexible and customizable training program can be developed that may qualify for state tax benefits and other financial incentives.

While not all incentives are the right fit for a company and/or community, work-force development incentive programs and partnerships transcend those boundaries to provide a service not only to a business, but also the community as a whole. In some jurisdictions, companies that participate in job training programs and increase their employment may automatically qualify for a corporate income tax credit.

As our economy continues to unknown territory, our work force must remain competitive and up to date on the latest techniques and skills that will help any organization compete in our global society.

by JASON HICKEY
President, Hickey & Associates, LLC

http://www.siteselection.com/issues/2011/jul/workforce-training.cfm
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Jason M. Hickey is President of Hickey and Associates, LLC, a global site selection and public incentive support firm representing a diverse set of industries. For more information, visit www.hickeyandassociates.com.