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Government Reimbursement for Skills Training

Employer reimbursement for workforce training is available from state, federal and local governments to improve productivity and competitiveness.

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Government reimbursement of skills training for productivity

Companies throughout the US take advantage of state-sponsored programs designed to improve the skills of workers, and their own competitiveness. In 2006, 47 states contributed more than $570 million to enhance the skills of one million individuals, according to a recent federal report.

It's true that the competition for limited training funds is fierce. Companies apply for three times the amount of available money set aside by state governments for training purposes, according to estimates. Yet experts claim the stiff competition should not deter employers from applying for government funding that can be used to upgrade the skills of their workforces.

Funding Sources for Training

Government training reimbursement benefits for employers include training grants, development grants, low-cost and forgivable loans, and tax credits.

Many companies are missing out on golden opportunities to offset employer training costs, especially for new initiatives important to their employees

Companies fail to take advantage of available programs because they either fail to make training reimbursement a priority, or they become intimidated by the application process. Seven out of every 10 first-time applicants fail to complete the necessary paperwork. Paperwork and targeting the proper funding and reinbursement sources is where specialized training consulting firms can help large and small companies obtain retention incentives from state, county and local governments.

It does take time and expertise to understand the laws and requirements, the contacts within state agencies, and other important elements for obtaining available training reimbursement funds.

Principal sources of state-administered funding programs include the states’ own general funds appropriated annually and also the federal Workforce Investment Act, the 1998 law that created a "one stop" system of workforce investment and education services for adults, dislocated workers and youth.

Employer Training Strategies

All states require that the employer pay at least half the cost of training which principally includes the employees’ wages.

The average reimbursement from states is $525 per person trained. Nearly 60 percent of state money goes for incumbent worker training, with the rest for new hire or economic development projects.

States require companies to submit requests for reimbursement following completion of the approved training. The request must include
  • Proof that the training occurred,
  • The number of employees trained and
  • The cost.
Only then is the grant money provided by check, electronic transfer or tax credit.

California's Training Reimbursement Program Strategy

Among the most sophisticated programs is that of California, where $52.1 million was provided in 2006, up from $45 million a year earlier. Companies are eligible for training reimbursement so long as they demonstrate that they face “out-of- state competition.” The average training project costs $285,000, which includes an average per-trainee cost of $1,000. An arduous approval process requires up to five months to complete,

California reimburses for lean-related training of employees at every level from clerical to management. Not only is classroom training reimbursed by state governments, but training on the shop floor to help employees become more efficient, productive and ergonomically sound.

Training Program Evaluation and Incentives

A large percentage of the expenses incurred in upgrading the skills of its employees can qualify for reimbursement under programs operated by state and local governments where the manufacturing plants were located. All the company has to do is qualify.

Companies discover that they can be reimbursed for many of their training expenses, especially when they are new initiatives and will significantly upgrade employees skills–-a multiple win for the state, for the company and for our employees”

Lean Manufacturing and Six Sigma Training

One area of training that state governments are especially eager to support is the adoption of new management strategies such as lean manufacturing and Six Sigma that seek to improve efficiencies, eliminate waste and instill a customer centric mindset. Companies that invest in such performance improvement programs demonstrate strong commitment to a facility and its employees.

By adopting lean and Six Sigma, companies can produce the same number of products with fewer people and a smaller footprint

Companies who are committed to organizational change activities can take advantage of training reimbursement programs to produce a major impact on their productivity and competitiveness in these tight market circumstances.

RESOURCE:
TrainingIndustry.com



Edited by Carolyn Allen, owner/editor of California Green Solutions
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