Gov. Rick Snyder is asking state lawmakers to increase funding for the popular Skilled Trades Training Fund program as part of his budget for the 2017 fiscal year.
Now in its third year, the STTF resulted in more than 2,900 jobs created and 6,400 jobs retained last year, according to the state. Snyder is asking for an additional $10 million, bringing the total program funding to $35.6 million since its inception.
The STTF is a competitive grant program allowing employers to apply for funds to train existing or new employees for hard-to-fill vacancies.
“The lack of the right kind of skill set is one of the biggest challenges we face as we want to grow the economy in Michigan,” said Stephanie Comai, director of the Michigan Talent Investment Agency, which oversees the program. The STTF “is one of the most effective tools we have to provide Michigan’s employers and workers with the opportunity to up-skill.”
A new funding year begins at the start of the fiscal year on Oct. 1, and Comai said the program is typically full within a couple months.
“We get flooded with applications on Oct. 1,” she said.
Employers are required to provide in-kind financial support as well. The $10 million allocated in the 2015 fiscal year helped leverage more than $112 million from employers, according to the state.
To date, West Michigan has received the most funding of any of the 10 economic development regions in the state. State officials and industry representatives credit this to more aggressive employers in the region looking to increase the number of skilled trades workers.
According to state figures, the STTF has awarded 871 companies with grants throughout the first three years of the program. About half of those are awarded to companies with fewer than 100 employees.
In fiscal year 2016, the West Michigan region received $3.6 million in awards, followed by Southeast Michigan and the capital region. Statewide, the program exceeded targets for job creation, job retention and training completion rate.
The state put up nearly $13.5 million for the program in the 2016 fiscal year, which helped leverage nearly $123.5 million for overall skilled trades training investment.
West Michigan leading
While other areas — particularly in Southeast Michigan — are beginning to see more funding, “certainly West Michigan has a healthy, growing economy with significant talent needs,” Comai said.
Local Michigan Works! branches help companies with their funding applications and determine the extent to which training is needed.
Michelle Rasmussen, business services director with the Michigan Works! West Central location, said manufacturing is the sector most in need of skilled trades workers. Rasmussen’s agency covers Lake, Mason, Mecosta, Newaygo, Oceana and Osceola counties.
The agency has helped companies in the region train workers in maintenance mechanics, print reading, welding, thermal imaging and more.
The program has had a “huge impact” on companies in her six-county region, Rasmussen said.
“It keeps employees valued at their company with an increase in training and, hopefully, wages,” she said. “It allows for more entry-level positions to open up.”
She said an additional $10 million from the state is “definitely needed. We have way more applications than there is funding available.”
Byron Center-based Buist Electric Inc. was awarded $69,000 through the program to get reimbursement for apprenticeships as well as to start employees in different roles at the company. It has had specific on-site training for engineers that lasted three to four days, said Kim Kohlhoff, human resources administrator at Buist Electric.
Thirteen apprenticeship positions have received reimbursement for their training at Grand Rapids Community College or Kalamazoo Valley Community College, Kohlhoff said. Additionally, Buist Electric has hired 10 more employees who have benefited from the training.
Buist Electric has been in business for 51 years and employs approximately 300 people. Kohlhoff said the state funding is helping as the company expands.
“Our company would have had these expenses regardless of whether we receive funding or not, so this helps,” Kohlhoff said. “We’re also looking at increasing the skilled trades training we provide, so this money is helpful to set up an on-site training center that we’re developing.”
In addition to the STTF, Rasmussen recommended that companies stay connected with local schools and other technology centers “to get a good grasp of the talent coming out of those educational institutions.”
Not a handout
Created in 2013, the STTF provides competitive grants for short-term training to companies that demonstrate a talent need. It includes classroom training and on-site training with wage reimbursements to hire workers. It also awards up to $3,000 if employers want to establish an apprenticeship.
Employers have told MiBiz in recent years that the program is not a handout because companies must retain workers to receive the funding and because the reimbursement is based on a sliding scale depending on whether targets are met.
When employers apply for funding, they identify a training partner in community colleges or similar institutions.
Comai said the training program is funded by the state’s penalties and interest fund, which collects money from individuals or companies that owe money to the Unemployment Insurance Agency for penalties or interest.
The state requires companies that receive funding to supply information about when a training is completed, what wages are at the end and the retention rate for those who are trained. That information is compiled on a state “dashboard” online.
The Legislature is in the process of going through Snyder’s budget proposal.
“Because we can demonstrate that people are earning a great wage when they’re done — and employers are really satisfied with this kind of support so they can grow their business — we have received a lot of support from members of the Legislature,” Comai said. “I anticipate the same thing this year.”