What began as a pilot program in 2014 to assist Michigan companies in training their workers has gained steam in its second year as growing manufacturers continue to clamor for help in retaining and attracting employees.
In particular, manufacturers have moved beyond focusing just on production workers and have shifted to using grants from the state’s $10 million Skilled Trades Training Fund (STTF) to provide technical training for employees in other positions within their organizations.
That’s true for Grandville-based MFP Automation Engineering Inc., where executives applied the $61,000 in state training funds it received this year across a wider swath of employees than it did when it secured a similar grant last year, said COO Brad Kirk.
“I like the way we were able to deploy the dollars deeper into the organization this year,” Kirk told MiBiz. “We were able to bridge our training dollars to get into a more lean principle-oriented environment. Our training is evolving around the mindset of continuous improvement.”
Instead of sequestering training to a specific area of the company, the manufacturer of hydraulic power components used the grant to train 45 workers in positions ranging from the front office to production staff. The training consisted of a variety of both on-site and off-site courses focused on lean manufacturing principles, production scheduling and waste reduction, Kirk said.
He added that MFP currently spends approximately $100,000 per year on training across the company.
“Without the grant dollars, I doubt we’d be that active,” Kirk said.
Battle Creek-based TODA America Inc. also used its $39,500 in training grants to promote lean manufacturing and standardized work processes throughout its operation, said Tamra Hendricks, the company’s human resources manager.
A manufacturer of cathode material for lithium-ion batteries, TODA partnered with Kellogg Community College in Battle Creek to train 14 of its employees in advanced manufacturing along with courses in problem solving, updated Occupational Safety and Health Administration (OSHA) standards, value-stream mapping and other broad-based subjects, she said.
TODA America also deployed a portion of its funding to retrain some of its maintenance staff to update their certifications on new pieces of equipment, Hendricks said.
The STTF program is administered by the Michigan Workforce Development Agency (WDA) and its partner organizations, including Michigan Works! and the Michigan Economic Development Corp. (MEDC) along with local economic development organizations and community colleges. The grant is funded through the Michigan Strategic Fund.
The STTF program has become increasingly popular among manufacturers who see the assistance as a key component in providing training to their workers. Based on the program’s performance, Gov. Rick Snyder has proposed a $10 million increase to the STTF budget for fiscal year 2016, said Patty Vanaman, Skilled Trades Training Fund specialist at the WDA.
The number of companies using the STTF grants increased since its inception in 2014. This year, the program awarded grants to 94 West Michigan companies, up from the 75 companies that took advantage of the state’s $10 million in funding the previous year.
Despite more local companies participating in the program, the share of grant dollars for West Michigan companies stayed steady at just less than $3 million, according to data from the WDA. The number of companies statewide that received grants also increased this year to 252 firms, up from 210 in 2014.
Under the STTF program, firms can apply for grants of up to $1,500 per employee to attend a retraining program as long as they are then retained by the company for a minimum of six months. Companies can apply for up to $3,000 for each employee who is participating in an apprenticeship program.
Six months after workers finish the training program, the companies must submit data on wage increases and worker retention to the WDA. Currently, the agency stops tracking worker wage and retention data beyond the six-month benchmark, but it may consider extending its data collection timeframe in the future, Vanaman said.
In 2014, 91 percent of employees who had undergone training paid for by the STTF were still employed with their original company six months after completing training, Vanaman said. Hourly wages also rose an average of 23 cents in the six months following training.
As manufacturers expand and add capacity, they’re increasingly turning to programs like the STTF for help in training workers.
For example, MFP Automation put a heavier emphasis on training its employers this year because it plans to expand into a new facility by the summer of 2015, Kirk said.
“We’re growing very quickly in terms of capacity (and) the training program ties right into that,” Kirk said. “As we grow, we have to differentiate ourselves from the competition and remain strong.”
The company’s new facility will more than double its capacity to 47,000 square feet and give it ample room for future expansions. MFP Automation currently generates approximately $40 million in annual revenue and plans to grow 10 percent in the next year, Kirk said.
Similarly, TODA America used the grant money to catch up on a backlog of training in preparation for its future growth. The company plans to hire an additional eight workers as it begins a new production line in 2016, Hendricks said.
While some companies appear to be applying STTF dollars to train a broader spectrum of their workers, other organizations continue to use the funding in a more targeted approach, Vanaman said.
In the case of Vicksburg-based Eimo Technologies Inc., the company used its $23,100 for employee training by bringing in an industry expert in injection molding. The manufacturer of precision plastic injection-molded decorative parts for the automotive and appliance industry trained a total of 30 workers in a three-day program. The training enhanced their operational knowledge of the company’s molding process, which includes pieces of decorative inlay that fit inside the mold before plastic is filled in behind it, said Brenda Harrington, human resources manager at Eimo.
“Because our process is quite a bit different than other injection molders, giving all of these people the background and additional skills makes their job easier,” Harrington said. “Now they have the training to do those processes and they feel more a part of the company because we are investing in them.”
The grant marks the first time the company has gone through the state to offset its otherwise nominal training budget, Harrington said. The company hired 50 new people last year and plans to add 20 employees to its 300-person workforce by the end of 2015. Harrington hopes to use the same STTF grant next year to fund training for Eimo’s managerial staff.
PART OF A LARGER SHIFT
The WDA’s STTF grants are one piece of a broader shift in the state’s economic development strategy to focus on talent attraction and development.
The state also administers the $50 million Community College Skilled Trades Equipment Program (CCSTEP). The grant allows community colleges in Michigan to purchase equipment and provide training for students studying skilled trades. Approximately $14.3 million of the program’s 2015 funding was distributed to community colleges in West Michigan, according to a previous MiBiz report.
“These are great tools to have in our tool box because they’re driven by the (organization),” said Ken Silfven, deputy press secretary for the state’s Executive Office. “These programs speak to the Governor’s commitment to making Michigan a national leader in talent development and enhancement.”