GRAND RAPIDS — With Cascade Die Casting Group Inc. purchasing up to a dozen new robots every year, the company has realized its investments can’t stop with just the equipment.
Rather, Cascade Die must deploy a parallel investment strategy that helps bring employees up to speed and ensures they have the skills necessary to perform their jobs, according to President Patrick Greene.
Like many employers in West Michigan, Cascade Die Casting has leveraged the state’s Skilled Trades Training Fund (STTF), a program that awards grants to companies to train and develop individuals or to retrain current employees. The program provides $1,500 to train individuals in short-term customized classes and up to $3,000 to support newly registered apprentices.
The grant funding makes life a “lot easier” for employers, according to Greene.
“It takes some of the financial barrier away from the organization and allows us to (train) quicker,” he said.
In place since 2014, the STTF grant program has proven to be a key resource for companies in ramping up their training and apprenticeship programs, especially in an era of low unemployment when skilled labor is hard to find for many positions.
For Cascade Die Casting, an automotive supplier with local operations in Grand Rapids and Sparta, the funds are used to train maintenance employees in hydraulics, die casting and in automation and robots.
“The old robots had older technology,” said Greene, whose two West Michigan plants were awarded about $14,000 from the program this year. “The skilled trades are our most valuable resource, and we need to make sure we support them with as much training and support as we can, like robotics training.”
EMPLOYERS MAKING INVESTMENT
Just this year, the STTF program awarded $32 million to 1,422 companies statewide, including $8.4 million to businesses in West Michigan.
The program is “quite an investment on the employer’s part, but they’re actually growing their own talents,” said Marcia Black-Watson, division administrator of the Michigan Talent Investment Agency (TIA), a division of the Department of Talent and Economic Development.
The program serves as a training model where people can actually “earn while you learn,” Black-Watson told MiBiz.
To apply for the STTF, an employer must contact a local Michigan Works! office and discuss program requirements, such as having a presence in the state and being compliant with all federal and state tax obligations. Companies are reimbursed for their training after employees reach the 30-, 60- and 90-day milestones.
Since the program’s inception in 2014, funding has nearly quadrupled amid high demand from employers. Black-Watson doesn’t see the funding stopping anytime soon.
“It is a very tight labor market,” Black-Watson said. “That investment is a benefit for the employers that have adopted the work-based learning approach, but also for those job seekers and those workers that have those types of opportunities.”
Some ways TIA defines success are by measuring employee retention six months after training, while also looking at what funding companies are contributing to the same programs, Black-Watson said.
Currently, the retention rate for employees who receive training via the STTF stands at 80 percent.
“We see that when employers really use a work-based learning approach — meaning that you hire someone who may not have all the requisite skills that are required — as an employer, you’re making an investment to train them on the job,” Black-Watson said.
Employers can no longer rely solely on pre-hire training or on candidates attending community college to take a course.
Rather, they are “allowing that training to occur in their workplace and making that investment,” she said. “That’s a great return to our economy in the state of Michigan.”
According to state data, 894 companies are participating in the STTF program in 2018 — double the number of applications from last year — with employers contributing roughly $266 million to the training.
While most of the funding supports short-term training, the new apprentice programs can last for a period of years.
“You’re working on the job with a journey-person or a mentor,” Black-Watson said. “You are participating in academic training. Those apprenticeships run anywhere from a year to four to five years.”
For Genzink Steel and Welding Co., it comes down to utilizing the program for “up-training” its workforce in areas such as basic blueprint reading, CNC machining software and welding.
About 60 employees are set to take a popular metrology class this year supported by the STTF program, said Kara Wiersma, human resource manager at the Holland-based manufacturer.
“Today, with the business demands being much stricter, we’re able to invest in in-house training to deliver the skill set required with increasing demands,” she said.
As a result of receiving the funding for training over the last several years, Genzink has been able to hire new employees as well as retain the talent the company currently employs, Wiersma added.
“Not only is each training class beneficial for the increasing business demand, but each employee receives a certificate after completion,” she said.
Genzink, a manufacturer of metal components and assemblies, received $71,230 from the program this year.
“It’s crucial for any place,” Wiersma said of the funding. “If we did not have the grant, it wouldn’t be impossible (to train workers), but close.”
Without the funding, Genzink could have been forced to prolong its projects, thereby putting the company in a “state of emergency,” according to Wiersma.
“The (STTF) drives us to work in a quicker manner,” she added.
Wiersma credits the state for being proactive in getting the program and its opportunities in front of employers.
“It’s amazing how much they reach out and how more and more companies are approved,” she said.
BUILD A PIPELINE
Grand Rapids-based West Michigan Works! collaborates with TIA as the “educator to the employers” to help them with the applications for the STTF program. The mission of the STTF program is fundamental to the agency’s workforce development focus, according to executives.
“We need a larger pipeline of skilled workers,” said Deb Lyzenga, the regional director of West Michigan Works!. “One of the things … economic forecasters will tell you is that because the unemployment (rate) is so low, the available workforce is also low.”
As the labor force becomes strained with fewer available workers — especially skilled workers — manufacturers feel obliged to “invest in more infrastructure,” Lyzenga said of companies’ adoption of more automation and various technologies.
In turn, that investment creates a need for a different kind of training for the workforce.
“As a result of that, companies will … train their workers to operate the machinery,” she said. “Employees have to understand the basics of the machines.”
Companies then train both long-time employees and recently-hired individuals to operate complex equipment, and that’s where the STTF funding helps, Lyzenga said.
“We are still building back from the Great Recession,” she said. “Infrastructure costs are very costly. … These funds help to offset some of that and help to grow the company.”
Lyzenga said the STTF is a “best practice” training model, but not the only one in the state.
“I think you have to mirror that with other best practices in the state,” she said. “With the increased number of apprenticeships… companies are acting.”
For example, companies have launched 400 apprenticeships out of the STTF funds and used the program to hire some 2,500 new employees.
In 2018, West Michigan “grabbed the lion’s share of the awards,” Lyzenga said.
KEEPING THE ‘BURDEN VERY LOW’
TIA’s Black-Watson said that although some of the more common occupations in the program are electricians, machinists, toolmakers and medical assistants, it’s really “about responding to the needs and the demands of business and the industry.”
As such, the application period for STTF grants is quick and the “burden’s very low” for employers, she said.
“We are going to continue to promote the career opportunities that are available through the professional trades,” Black-Watson added. “We’re going to continue to support business and industry as it relates to providing some resources for those in-demand and high-wage occupations across the state.”
Greene at Cascade Die Casting agrees, adding that it is a “very detailed application” to secure the funding.
“The STTF has been an excellent option,” he said. “They really do a great job.”