Using Workforce Development Grants to Extend Your Training Budget

by Dean Prigelmeier, President of Proactive Technologies, Inc.

There are a lot of pressures on company training budgets that can arise these days. The company may be performing moderately well – numbers looking reasonably good in an economy that can be called “sluggish.” Shareholders react and a major realignment is announced. Departmental budgets must be reexamined, and each department may have to explain their purpose and value to the company.

Companies, especially publicly traded companies, are driven by monthly scrutiny of their quarterly guidance upon which the trading on Wall Street is determined. In a sluggish economy, 12-month goals may never be reached if evaluated quarterly for 12-month outcomes. Nevertheless, the effort to cut costs to raise earnings finally reaches bone.

Training is especially vulnerable because accounting departments see little explainable value and hold the traditional view that these are “costs” that can be put on hold or eliminated – especially if the next quarter might bring a layoff of those scheduled for training.

If the value of worker training cannot be empirically explained during periods of budgetary angst, training, and those associated with training, are the first to be cut despite the obvious questions: “What if the economy comes back? Does the company plan to rebuild its training program and staff when it starts to rehire? Won’t the incumbent workers reassigned to take up the slack by layoffs need training for their new jobs?”

Companies rarely spend much time thinking of the ramifications of eliminating training during slow times. They often do not have a choice. So, training departments need to be relevant if they are to survive. They need to be able to explain their strategy to management, with a strong, empirical investment-return on investment component. If the case cannot be made in those terms, maybe the training department needs to redesign themselves or their cut might be justified. A deliberate structured on-the-job training program that is linked to engineering processes, quality specification and EHS requirements is harder to dismiss than a training strategy that based on an inexplicable selection of classes and seminars.

Another thing a training department can do is to research available worker training grants. Some are designated for new-hires, some for updating the skills of incumbent workers. Being able to offset some or all of a training budget may help the department survive to fight another day. But the reasons for the grant funding must support the training strategy, not appear as “window dressing.” Funding that helps to build on a strong worker development strategy will make sense on its surface, as well as during a “deep dive” into the numbers. A grant of money itself may not be enough to save a training department if how the money supports a strategy with an expected outcome cannot be seen.

Several sources of worker training grants exist and are different from state to state in their amount, intended purpose, duration and paper-work requirements. You might find out quickly that it is helpful to have someone experienced to help you navigate the sources.

State Grants – These are usually granted during a state government’s fiscal year and have a period when to apply, when to report use of funds and what the money can be used for (which industries, job classifications, which types of training). Some are direct grants and some are reimbursements for documented training delivery. These funds can be issued from the state’s labor department or education department, or from a separate agency specifically designed for worker training.

Federal Grants to States for Workforce Development – These funds are offered periodically, linked to each federal fiscal year. However, more and more these funds are offered directly to the states, who redistribute the money to community colleges, career centers and special purpose consortiums. If interested in these funds, ask your local public training institutions. One area of high importance to the U.S. Department of Labor now is apprenticeships. So many community colleges have re-branded themselves and their programs that have existed for years as “apprenticeships,” so “kick the tires” before you buy into any of their programs. Insist on job relevancy, even if “free.”

Department of Commerce Grants – State and federal commerce agencies offer funding to companies willing to locate or relocate to a specific region as part of a economic development package. Sometimes they offer grants to stimulate the local or regional economy to companies to purchase capital equipment (which will require training to run it) and/or to raise worker skills and, therefore, taxable wages. This takes more research and may involve a lot of networking. Nevertheless, it can be a viable source of training dollars.

There are also a range of tax credits for worker training, as well as credits or incentives to hire a certain class of worker (e.g. veteran, chronically impoverished, disadvantaged and dislocated workers). These can be issued through a myriad of departments in a state.

Many times a company will not seek out training grants because no one has time, inclination or knowledge to do so. That is why working with an experienced partner to design a strategy for your specific needs, and who can do the grant research for your firm and help you apply once a training strategy is determined, can help your training department through a sluggish economy with little or no growth in sight. Making a training function or department efficient, effective and relevant can help it survive the deep cuts to which we are accustomed.

Access the Proactive Technologies website for information on the accelerated transfer of expertise™ and information about Proactive Technologies’ efforts to help clients apply for grants to defray some or all of the investment to setup and implement a structured on-the-job training program designed to the each job the client determines.

Contact Proactive Technologies Inc. to either attend a live online presentation or schedule a teleconference to start the discussion of how this approach can save your organization money, minimize the frustration and optimize the return on your worker investment. Or schedule an onsite presentation when our representative is in your area.