I have worked as a trainer/training manager for several employers. My employers were as diverse as they come, ranging from not-for-profit organizations to one of the world’s largest Fortune 500 companies and from start-up technology firms to companies that have been around for 100 years. Yet they all had something in common.
Come budget time, I knew I would be on the short end of the appropriation stick. In order to overcome this obstacle, I had to get creative. I turned to a trick I learned in the not-for-profit world: knocking on the doors of the public sector and asking for help. I had watched a Fortune 500 company use its leverage to obtain assistance from state economic development groups. But I wondered if a small- or medium-size technology company could also benefit from state training grants. The answer was a resounding “yes.”
How do training grants work?
Training-incentive packages are structured various ways in different states. Each state has a particular mission associated with training incentives. Kentucky focuses on workforce development, providing employees with marketable skills and making Kentucky’s labor force more desirable to potential employers. Massachusetts focuses on enabling corporations to establish or maintain a competitive edge.
Funding options vary as well. Funding assistance ranges from direct reimbursement of purchased materials, to paying a standard rate for training delivery hours, to underwriting the documentation and development. Most states set caps on the dollars they will allocate a company and base the allocation on a formula that balances need for training, size of company, and objectives of training initiatives. There are usually time limits on the funding. For example a company must spend the allocated money within a prescribed time.
Who qualifies for the dollars?
While qualification requirements vary from state to state, many states loosely define who can benefit from training grants. Any company can benefit from these dollars. This includes Fortune 500 companies, as well as fresh start-ups. The key to obtaining grant dollars lies in proving your company’s “worthiness.” No matter what formula a state uses to determine who will receive training funding, count on every state wanting to know if:
- the company is solvent
- the company is growing, or shows the potential for growth
- the company has a proven track record
- the company will actually use the money for training
- the training will be worthwhile
Where to go for the money?
Not every state offers training incentives, but many do. The best place to start your search for training dollars is—you guessed it—the Web. A simple search on workforce development or economic incentives will pull up a listing of global options. Going straight to a state’s Web site will provide more focused information.
Local and state chambers of commerce are also great resources. A good approach in grant exploration is to learn what you can from the Web, then take that knowledge to the chamber. Chambers of Commerce and/or other economic development bodies can be your most valuable ally. Funding in most states is limited and competitive. The chamber should know your state’s requirements well and help to navigate through “hidden rules.”
What if my state doesn’t offer training grants?
If your state doesn’t offer training grants, there are other options available. Training funding may be available through partnerships with local universities, federal programs, or local not-for-profit organizations. There are even opportunities to partner with larger for-profit corporations. Microsoft has recently launched an initiative to assist smaller companies (via local educational institutions) with technology-based skills upgrades.
What are the drawbacks?
As we all know, government means bureaucracy. Entering into a training partnership with an external funding source involves a considerable amount of time on reporting and other administrative functions. Many technology firms are dynamic and undergo constant change. Timelines for deliverables are short. Because of other responsibilities, not every training manager will be able to find the time to manage a grant. Before entering into any funding partnerships, be sure you understand all reporting requirements and any strings attached to the money. The requirements can be time-consuming. After a cost/benefit analysis, you may learn that you simply can’t afford the time.
Another drawback to training grants is lack of flexibility. Many grants are tailored to provide training dollars to specific training initiatives. In the ever-changing world of technology corporations, it is important to write a grant proposal that will allow for flexibility in the training plan.
Are grants right for your company?
Grants and partnerships can be the solution to many issues. They add value to the training department and offset training spending, a hidden cost of growth. Training-incentive dollars can be just what is needed to provide your department with the credibility needed to impress your CFO. But grants are not without drawbacks and may not be worth the energy it takes to implement a public-private partnership. Before entering into this project, it is critical that all key players (up to the CEO) understand the implications.
The bottom line…
While they are not for everyone, grants can add value to the corporation. They can be time-consuming and even frustrating to manage. Yet, the payoff can be huge. Grants can enhance existing training programs, give your corporation community visibility, lead to other economic incentives, and even move your training organization from a cost center to one that actually has a positive impact on the bottom line.
If you’d like to comment on this article or share your experiences obtaining training grants, please post a comment below or follow this link to write to Wendy.