State governments spent over $1 billion in 2013 to provide grants and tax credits to businesses to offset training costs. Although each state training grant program is different, it is usually a basic requirement that the training being funded provides significant skills upgrades ie lean, operational excellence, customer service etc.
Here is how the process generally works:
- An application is completed out providing specifics about the company and the training program, with special emphasis on demonstrating why the training is critical to the company’s success.
- When a company does this in-house, the application process takes about three or four months, in our experience. From anecdotal evidence, it appears there is a this-is-a-pain-in-the-neck dropout rate of about 67 percent, meaning that two-thirds of companies that start the application process never finish it. It’s just not a typical corporate skill set to work with Governments.
- The state agency that receives the application reviews it. Approved companies receive a grant notification letter with an approved dollar amount. Depending on the state, only about 25-50 percent of requested grants are approved. Next, the company executes the planned training and requests a reimbursement as it accumulates costs. Typically within 45 days of the request, a check is issued directly to the company.
We offer an alternative to do-it-yourself applications by managing the process for you. We complete 100 percent of applications started and have a 100 percent approval rate (with 97 percent first-pass yield; three percent are re-submitted and subsequently approved). We attribute our approval rate to (a) our expertise in knowing how the state wants the application prepared and (b) our work pre-selling the application by getting together with senior state personnel.
As an example of how we do it let’s look at a musical instrument company. We were able to offset, over $900,000 in cost offsets on their behalf over the past year. The largest portion of the training grant was for lean kaizen events in California. The state of California provided a grant of $567,000 for two years of lean training for 550 employees. This was a 50 percent recapture of Kaizen consulting costs and an average grant of over $1,000 per employee.
Here’s even better news: In many cases, states will offer even more funding to help companies move jobs into a state through growth or consolidation. If you’re considering adding jobs don’t miss this opportunity to see how government grants can help your business.