June 1998
Is Your Company At Risk?
Dear Chamber Member:
The Department of Workforce Development (DWD) is shifting its investment strategies to support the administration's priorities for lifelong learning and development of the incumbent workforce. Beginning July 1, 1998, $500,000 will be obligated for "Workers at Risk" projects; $1,000,000 will be obligated in 1999, and our goal is to increase investment resources thereafter. The reasons for focusing on incumbent workers:
-Most of the workforce of 2010 is currently working and beyond secondary school, but has little access to formal training at work and does not take full advantage of education and training opportunities at home.
-The percent of Indiana's total labor force enrolled in part time education is significantly lower than the national average (source: National Center for Educational Statistics).
-Hoosier workers may not be receiving the training they need to ensure Indiana's competitive position and future economic growth. Failure to develop new skills places workers and their families "at risk" in the global economy.
-Focusing on incumbent workers has obvious advantages:
(1) Workers who retain their present jobs also retain seniority, benefits, and higher wages than they might experience if they had to become entry level workers at new jobs following a dislocation.
(2) Social service system costs are reduced if workers are trained while still employed. If dislocation becomes inevitable, periods of unemployment may be reduced if workers have certified, transferrable skills.
(3) Companies that increase their training activities are more than twice as likely as other employers to report quality improvements, 75% more likely to boost worker productivity, and 60% more likely to increase their operating profits (source: American Management Association, 1997)
Basic parameters for Workers at Risk: Proposals must be initiated by an elected official (mayor, town president, or county commissioner) through a letter to the commissioner of Workforce Development. The letter should contain basic information regarding the company's name, business, size, and community commitment to retaining employment. The company will be contacted by a representative of DWD to review the risk factors with a team representing state and local agencies. If appropriate, the team will give the company an application for Workers at Risk. They will consider all other potential resources as well, and may refer the company to a better resource.
-Funding will be made available quarterly. Projects will be selected based on the degree of potential risk, projected outcomes, local investment, and cost.
-Only small firms of 100 employees or less are eligible. However, a larger company may be eligible if the employer has significant economic impact on a community.
-The maximum award for any one project is $50,000.
-Proposals must include at least $2.00 in cash or in-kind match for every $1.00 of state funds.
-Project may last up to 24 months from date of award.
-Proposals must quantify project business outcomes (e.g., productivity and/or quality improvements), as well as employee outcomes (e.g., documented skills gains.) Special consideration will be given to proposals that incorporate Certificates of Technical Achievement in the project design, or include establishment of lifelong learning strategies such as tuition reimbursement programs or employer-sponsored individual learning accounts. Payment will be made for achieving projected outcomes.
Risk factors may include such things as:
-Significant layoffs in the last 12 months that are not related to seasonal cycles.
-Documented loss of target market(s).
-Loss of product lines.
-Cutback in employee hours.
-Increased absenteeism and / or accidents.
-High error rate or poor quality control.
-Declining productivity.
How are these funds different from Training 2000?
(1) The company must be at-risk of closure or substantial layoff.
(2) The company does not need to make any capital investment to be eligible.
(3) The company may be engaged in any business or industry, not just manufacturing.
(4) Payment is made directly to the company for achieving outcomes.
If this new program is something you are interested in, please call the Chamber office at 936-2323.
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