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Savvy HR professionals can find government grants to retrain incumbent and new employees.
In January 2008, Titus, a heating, ventilation and cooling manufacturer in Richardson, Texas, received over $218,000 in grants from the Texas Workforce Commission to retrain employees. Without the grant, "We would have hardly delivered any training this year," says Training Manager Melanee Dickinson. "Our industry is changing. People are focused on saving energy and building ‘green.’ We needed to get our engineers up to speed on the government energy regulations."
In addition to other training, the grant allowed the company to send 13 engineers to a $600 course in preparation for the Green Associate Certification Exam. "This positions us in the marketplace and increases our credibility with contractors. We couldn’t have afforded to do that without the grant money," Dickinson explains.
It’s the Catch-22 of training: When work and revenue flows, it is difficult to take employees away from their desks for training. But, when work slows and employees have time to train, there is less money in the training budget. Fortunately, some companies have determined how to break free of this vicious cycle. These employers, like Titus, have sought government funding allocated for employee retraining.
A&D Technology Inc., a powertrain testing and vehicle development supplier in Ann Arbor, Mich., has sought grants to retrain its employees to diversify into batteries and electric motors. "We have 100 employees, and 40 percent needed retraining. We couldn’t cover the funds for all of the training required," says HR Manager Jennifer Cassel, SPHR. Cassel applied for a state retraining grant and received $32,000, with another $8,000 in requests pending. "Within the last year, 34 employees received training, which has been funded mostly through grants by the State of Michigan. We were thrilled the state could provide this for us," Cassel says.
Types of Treasure
According to a SHRM poll conducted in March, 34 percent of employers say they have retrained employees for new positions within the organization—up from 10 percent who said they had only six months earlier. But how can HR professionals support these retraining efforts? With the latest stimulus packages, there is more government funding available than ever.
Grants are available through many federal, state and local government workforce initiatives. "Companies can receive grant funding through privately funded programs, too, such as The Bill and Melinda Gates Foundation," says Vernon L. Hawkins, associate vice president of workforce and continuing education for Brookhaven College in Farmers Branch, Texas.
"There is a bewildering array of workforce policy programs," explains Andrew S. Levin, deputy director of the Michigan Department of Energy, Labor & Economic Growth. "In Michigan—because we’ve had a structural decline of an industry upon which we are so dependent [automotive manufacturing]—we’ve had an aggressive worker [retraining] program."
In May, the federal Trade Adjustment Assistance program (TAA) was revised and expanded. "In the old TAA, you could only get training money if you manufactured an article and lost that contract because production was shipped [overseas]. In contrast, the new TAA includes employees of service companies, suppliers of manufacturers who move production [overseas] and companies who are trying to switch over to a new kind of production [in an effort to keep incumbent workers]," says Levin. What this means for HR professionals is that even if your company wasn’t eligible for retraining funds in the past, it may be eligible now.
"Federal stimulus funds have more than doubled the availability of [retraining] funds," Hawkins says.
"There is so much money to go after in the [American Recovery and Reinvestment Act], it is perfect timing for [HR professionals] to look," Levin agrees.
Adaptive Materials Inc. (AMI), a fuel cell manufacturer in Ann Arbor, Mich., is one of the companies reaping the benefits. "We partnered with Michigan’s unemployment organization" and nonprofits, says HR Director Anna Hornyak, who wrote the grant applications. "The grant [application] provides a set of questions to answer but goes beyond that to our strategy and longer-term goals."
AMI received a $160,000 grant for training incumbent and new employees, such as Gail Steiner, team leader for tube extrusion and cell fabrication. "Prior to joining Adaptive Materials, I was employed as a heat treat technician at a company that manufactured bearings for the automotive industry," says Steiner. "The [fuel cell] training allowed me to transition to a new area of manufacturing."
The training has been varied and widespread. "Originally, we focused on technical skills a [new fuel cell] manufacturing technician needs. Now, we are training key competencies," explains Hornyak. The grant money has been applicable for "project management training, Six Sigma, leadership training, presentation skills and a lot of safety training. … All of the employees have received some level of training. Overall, we have a better-trained workforce," says Hornyak.
Where to Dig
Where should HR professionals begin?
Unemployment agencies. "Generally, an unemployment agency is the source of federal and state funds. Use that as a starting point," advises Amy Cell, vice president of talent enhancement and entrepreneurial education for Ann Arbor SPARK, a nonprofit economic development organization in Ann Arbor, Mich.
Economic development organizations. "We started by searching the web for information on Michigan.gov. Unable to find what we were looking for, I called the Michigan Economic Development Corp. [MEDC], and it was amazing how quickly they responded," Cassel says. "They came for a visit and were interested in assisting us with advanced technology training involving hybrid and electric vehicles. MEDC made the process easy for us; most of the grant application was verbal with a short [written] application."
Chambers of commerce. "Sometimes economic development is done by the chamber of commerce or the municipality in the region. One of those two should be able to direct you to the economic development group and any state or local tax incentives," says Cell.
Community colleges. "Contact the nearest community college and ask for the college’s resource development officer or the office responsible for workforce development training. These offices will be able to help the company identify the grant administrator," says Hawkins.
Levin adds that community colleges are often more than willing to assess employers’ needs and custom design training courses to meet them.
"Make phone calls and ask a lot of questions," adds Cassel. "It also helps to understand when the state agencies get re-funded, so you know the best time to contact them. Once you understand the system, and which agencies receive the funding when, it makes the process much easier."
Lastly, Levin advises, "Partner, partner, partner. Get to know your local workforce investment board. They are the ones who hold the purse strings, and you’re much more likely to get funding if you build relationships with them. Let them solve your problems with you. They may know of resources available to you that you’re not aware of."
How to Dig
To apply for government grants, HR professionals need to be prepared to conduct detailed needs analyses, analyze training options and write grant applications. "Look at the skill sets your organization will need within the next few years," says Hornyak.
Conduct needs analyses. "Do a thorough, accurate needs analysis," advises Dickinson. "Once I commit to these classes, I have to do them. For instance, if I say [in the grant application] we’re going to have 30 students in this class and we’re going to have two sessions of it, I’m committed, even if I realize later we don’t really need that class or we only need it for 10 people. If you don’t follow through with what you’ve said you’re going to do, you won’t get any money next time."
Dickinson learned this the hard way. "When I came to work at Titus in September, the vendor had written our grant. I started discovering we didn’t need an Oracle class for 30 people, only for two. There was a bunch of stuff in the [grant application] we didn’t need. It was a mess. Then you have to do an amendment [to the grant], and that takes months. It has delayed a lot of things and made them more difficult," she says.
Analyze training options. Create a schedule that balances workflow with training, says Dickinson. "How much training do you realistically have time for? You don’t want to ask for more than you can deliver. Also, you need buy-in from the managers so they will let their people come to the training," says Dickinson. "If I schedule one training class for customer service reps, I can’t have the entire customer service group gone for the whole day." Instead, schedule smaller groups to be gone more frequently.
Write the grant. Dickinson took an online grant-writing course, but she says HR professionals would do better to ask the grant administrator at the local community college to help write the application. "Our grant administrator helped write the grant," says Dickinson. "I would steer people away from having [other] vendors write the grant, though. In the beginning, we made the mistake of allowing one of our training vendors to write the grant. We paid them thousands to write the grant for us. Now I know the grant administrator at the junior college will write it for me at no charge. I provide a lot of the information for him, including the needs analysis, but he puts it all together."
Hawkins, who helped Dickinson write the grant, says HR professionals should be ready to submit:
Start your research and planning early. "The wheels of government move slowly. It’s a big process. If you get approved, it’s still three months before you get any money. Don’t do it last minute," Dickinson says.
Not surprisingly, grants come with strings attached. Grants restrict which employees are trained, by whom and on what, as well as how much is covered and how it will be paid. For instance, most states declare employers can train only state residents with the grant money. "We have company employees in other states, but we can only use this grant for Texas residents," says Dickinson. The states "want to know how many jobs you’re going to add, what you are going to do to train new employees or upgrade the skills of current employees."
Also, the amount of grant funding varies by state. Some states refund 25 percent to 50 percent of training costs; other states cover 100 percent.
Grants pay for the training but may also pay for assessments, manuals and books, says Dickinson. However, HR professionals must request all of the desired materials in the beginning.
Grant funding may also restrict the choice of training providers.
Cassel emphasizes the importance of following the rules. "With one of the grant programs, contracts may not be signed directly with the training vendor. The contracts must be signed directly with the state. If you violate these rules, it voids the grant," she explains.
Finally, "they don’t just give you the money. In some states, it’s reimbursement. Here in Texas, they cut checks through the junior college to the vendor. … The junior college is providing some of our training, such as our computer training. They will get the money directly from the government. For [other vendors], we get reimbursed," says Dickinson.
Worth Its Weight in Gold
Retraining employees in an unstable economy has intangible benefits, too. "It has improved morale. In this tough economy, [the grant] has allowed us to continue to invest in our employees. Employees appreciate that," says Dickinson.
Frank Forrest, product manager for PennBarry, a sister company to Titus in Richardson, Texas, agrees: "It shows the company is truly interested in its employees and helping them to become better people, as well as better employees."
Neal T. Holden, a design engineer for Titus in Allen, Texas, values the training he has received. "Titus’ training sessions helped me to develop quality working relationships with my co-workers more rapidly due to the high level of interaction during the training sessions," he says. "I learned about their strengths, and they learned about mine."
Cassel says retraining efforts can maximize HR’s impact. "This has been a tough year to provide rewards to employees, with most HR professionals left with a small budget for rewarding employees. As I talked with some of the employees after class, many felt the training helped them to not only improve our products, but to advance their own careers as well."
The author, a former HR generalist and trainer, is a freelance writer in Wixom, Mich.
SHRM article: Training on a Shoestring (HR Magazine)
SHRM poll: Financial Challenges to the U.S. & Global Economy and Their Impact on Organizations
Web site: U.S. Department of Labor Employment and Training Administration
National Fund for Workforce Solutions
Resources:Free online training resources
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