Utilizing Public Incentives to Develop a Skilled Workforce

24 Sep, 2014

By: Trade & Industry Development

When companies struggle with human resource issues arising from a shrinking pool of highly skilled and talented workers, they will often resort to acquisition strategies that may run counter to employee retention plans and may prove to be less cost-effective.

These strategies also often ignore employee surveys that identify learning and development as the most important factors in achieving career advancement and increasing employee satisfaction.

It is a well-known fact that the more employees are engaged in interesting, challenging work and have opportunities for growth, the more likely they are to be highly productive and stay with their company. Therefore, talent development and deployment strategies have to incorporate some way of building employees’ skills to maximum capacity.

Employee development becomes a critical tool both for the employee’s career progress and for the organization’s market competitiveness and growth. When a third and important stakeholder in the economic equation gets involved — state government — employees, organizations and the public sector can create a successful partnership where everyone wins.

In today’s global economy, state governments are doing more to help their workforce remain competitive. Because competitive employees must possess the best and most advanced skills, government agencies have established multiple training grant programs to stimulate worker skills development. Governments understand that as workers increase their skills capacity, they fuel innovation and product development, which ultimately spurs economic growth and multiplies the return on states’ investments in their workforce.

From the private sector’s perspective, employee development can be expensive, and incentives — particularly those addressing the cost of training and upskilling of workers — can have a positive impact on business and investment decisions. Therefore, by directly financing training, government can help companies address challenges related to talent shortages and competitiveness.  A training grant with a reasonable application and decision-making process will enable an organization to enact training quickly and efficiently, boosting employee productivity and its balance sheets. Companies can forge ahead confidently with the knowledge that proactive actions will be supported with training funds.

The Ohio Incumbent Workforce Training Voucher Program (OIWTVP) is one example of how states use grants as training incentives designed to respond to real-world business situations:

The stated goal of the program is to “allow employers to retain and grow their existing Ohio workforce and create a statewide workforce that can meet the present and future demands in an ever changing economy.”

It was developed as an employer-driven program that is targeted to provide financial assistance for training workers and to strengthen Ohio’s economic competitiveness

OIWTVP provides a reimbursement of up to $4,000 per employee per fiscal year for qualified training costs, with an annual cap of $250,000.

This money can be used for a single training activity or for multiple training activities for a given employee over the course of a year.

Qualified training includes college courses, computer skills training, training for improved process efficiency, training in conjunction with the purchase of new equipment and more.

Costs associated with the training are reimbursed for up to 50 percent of the total cost of training.

Although currently state grants for workforce development make up a small portion of economic development incentives, they are vital to states’ economic health and growth and significant for the learning and development community. And increased productivity from a highly skilled labor force allows states to boost their own economic growth. This process also increases the demand for trained workers and leads to higher levels of employment, resulting in a win-win-win situation for employees, companies and state government.


About the Author

Terry Hansen is a principal with Hickey and Associates, a global site selection, public incentive advisory and workforce solutions company based in Minneapolis, Minnesota. Mr. Hansen has decades of experience in the realms of public incentives and workforce development. For the majority of those years, Terry led IBM’s worldwide relationships with public agencies. In this leadership role, Terry was responsible for obtaining government funding assistance for human resource projects, for both IBM and external clients. These efforts included such fields as training, employment expansion, special initiatives and other workforce development activities. Contact: