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This material is copyrighted by MAGNET. Reproduction of this material is by permission only. Measuring the Economic Impact of Training and Certification.

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Presentation on theme: "This material is copyrighted by MAGNET. Reproduction of this material is by permission only. Measuring the Economic Impact of Training and Certification."— Presentation transcript:

1 This material is copyrighted by MAGNET. Reproduction of this material is by permission only. Measuring the Economic Impact of Training and Certification Dr. Judith Crocker Director, Workforce and Talent Development 1768 East 25 th Street., Cleveland, OH 44103; (216) ; (800)

2 This material is copyrighted by MAGNET. Reproduction of this material is by permission only. MAGNET has been serving Northern Ohio Manufacturing Companies for over 25 years. Our consultants and engineers possess the tools and years of experience to help companies meet and exceed their business goals. MAGNET supports Ohio’s auto OEM’s and their supply chain as an Edison Technology Center and is the NIST Manufacturing Extension Partnership Center for Northern Ohio. These affiliations allow MAGNET to provide essential services to manufacturers at an extremely reasonable cost. Edison Technology CenterNIST Manufacturing Extension Partnership Center Who We Are:

3 This material is copyrighted by MAGNET. Reproduction of this material is by permission only. The mission of MAGNET is to support, educate and champion manufacturing with the goal of transforming the region’s economy into a powerful, global player. MAGNET is affiliated with Manufacturing Extension Partnership (Ohio MEP) MEP is our national affiliate and funding partner The MEP is managed by the federal agency of NIST(National Institute of Standards and Technology) MAGNET is an Ohio Edison Center designated by the Ohio Department of Development (Ohio DOD)

4 This material is copyrighted by MAGNET. Reproduction of this material is by permission only. As required by MEP, MAGNET requests that each of our clients provide information to a third-party auditor on the value of the work performed by our consultants By evaluating project related factors such as new and retained sales, capital investments, jobs created or retained, and cost- savings, the auditors provide MAGNET with the economic impact of our services 3rd Party survey (Fors Marsh Group): Fors Marsh Group, a nationally recognized survey firm, conducts the survey on behalf of the MEP, our national affiliate and funding partner “All information will be handled as confidential. No information identifying specific companies will be released by MAGNET (without written consent by the specific company). Information may only be released in aggregate summary.”

5 This material is copyrighted by MAGNET. Reproduction of this material is by permission only. Our Role Workforce and Talent Development Function as intermediary connecting educators, employers, and public workforce system Encourage education/training institutions to build curricula & programs to serve manufacturers Raise level of workforce expertise in region Increase pipeline: promote career opportunities in manufacturing

6 This material is copyrighted by MAGNET. Reproduction of this material is by permission only. Project Background Governor’s Workforce Policy Advisory Board passed resolution and committed to statewide certification program Chancellor & Ohio Board of Regents recognized importance of manufacturing and skills certification to state’s economy Leading manufacturing employers identified need for skilled workforce Manufacturing Certification Working Group convened MAGNET hired as project manager for Working Group Eight month process resulted in: - Consensus on use of NCRC and MSSC as basis for entry level career positions - Development of process to pilot with employers - State funding from Department of Job and Family Services for 4 pilot projects

7 This material is copyrighted by MAGNET. Reproduction of this material is by permission only. Pilot Process Eligible companies had to be: Planning to hire entry level workers in the next 3 – 6 months Agree to partner with education/training partner Willing to provide input in the curriculum to ensure that it adequately prepares individuals for consideration in their company Able to commit to interaction with the class and an introduction to their company Willing to select new hires from the pool of program completers Able to cover any additional training costs beyond the curriculum for the two certifications Solicited partners from members of Working Group & their networks

8 This material is copyrighted by MAGNET. Reproduction of this material is by permission only. Pilot Process Cont. Education Partners had to be: Willing to deliver the WorkKeys & MSSC Facilitate employer involvement in design of curriculum Work with One-Stop system to identify and enroll participants One-Stop partners agreed to: Assist with recruitment Facilitate funding

9 This material is copyrighted by MAGNET. Reproduction of this material is by permission only. Pilot Results Companies: 23 Participants: 70 Placement: 65% Recruited education partners to participate in gathering Economic Impact Data Provided training to explain process and provide information to help employers understand purpose and questions All education partners agreed to participate. Identified 10 companies to survey Five responded to date. Five more in next round. Additional data being collected through follow up interviews with employers

10 This material is copyrighted by MAGNET. Reproduction of this material is by permission only. E.I. Process MAGNET Survey The company completes the initial survey with the Education Partner present, and forwards to MAGNET The survey responses should include both the actual actions already taken and the anticipated actions before the survey close date (December 31, 2011) 3rd Party Survey The company independently completes the online survey The company can use the completed MAGNET survey to complete the online survey, and revise their responses to reflect actual results The survey responses should include both the actual actions already taken and the anticipated actions before the survey close date (December 31, 2011) 3rd Party Results The aggregate results of the 3rd Party survey are supplied to MAGNET MAGNET provides aggregate results to the partners

11 This material is copyrighted by MAGNET. Reproduction of this material is by permission only. Sample E.I. Questions Sales Increase Estimate sales increase due to additional employees Est. sales increase = # employees x $ sales/employee Current sales/employee = $10,000,000 / 100 = $10,000/emp. Est. sales increase = 7 new hires x $10,000 = $70,000 Consider greater new hire productivity due to program Jobs Created Jobs created = number of employees hired + estimated hires by 12/31/11 Jobs created = 5 hired + 3 est. hires = 8

12 This material is copyrighted by MAGNET. Reproduction of this material is by permission only. Sample E.I. Questions Retained Sales Estimate the sales that may have been lost if the skilled employees were not hired in time: $600,000 backorder and late shipments Estimated 25% of backordered would have been cancelled by customer Retained sales = $600,000 x 25% = $150,000 Workforce Practice or Employee Skills Management of this Pilot Program (internal resources, HR, reporting) Wage premiums for enhanced skills of workers hired Training development costs Grant related costs

13 This material is copyrighted by MAGNET. Reproduction of this material is by permission only. Respondents were encouraged to: Check the “Yes” box if there was positive impact, even if dollar amount estimate not available Estimate and record the dollar amount: Report all information actual year-to-date and estimated through December 31, 2011 Use the fully burdened labor rate for estimates If no actual information is available, please enter best estimate

14 This material is copyrighted by MAGNET. Reproduction of this material is by permission only. Preliminary Data Five Responded to Date Jobs Created10 Retained Sales$2,000,000 Increased Sales$250,000 Investment in Plant/Equipment $6,000,000 Workforce Practices$50,000

15 This material is copyrighted by MAGNET. Reproduction of this material is by permission only. Employer Quotes “Unfortunately I don't think this survey demonstrates the impact of our partnership accurately. Our main issue was that we had open positions which needed to be filled by skilled workers. Our partnership resulted in trainees who were ready to fill open machine shop positions. The positions this group filled allowed us to train current employees to prepare them for higher skilled jobs in machining. The final outcome was that we were able to increase our production capacity. These improvements helped us to keep and gain new business because we were able to keep production lead times below the industry standard.”

16 This material is copyrighted by MAGNET. Reproduction of this material is by permission only. Employer Quotes “ We were one of the early advocates of the MSSC PT certification because these candidates are familiar with key manufacturing concepts like safety and quality before they walk through our door. That allows them to be more productive sooner than individuals who do not have the CPT. Our confidence in the CPT certification is such that we offer a premium starting wage for new employees who have that certification. I encourage all manufacturers to learn about the MSSC CPT and consider how it might reduce your recruiting and turnover costs.”

17 This material is copyrighted by MAGNET. Reproduction of this material is by permission only. Conclusion Companies can measure the Economic Impact of a quality workforce development program with certifications A workforce preparation process that includes certifications has value to a company Workforce training that begins with employer input and engagement may be more successful than models that don’t MEP’s can play a key role as a workforce intermediary by: Identifying manufacturers’ workforce and talent development challenges Assisting educational institutions in quantifying their contributions to the employer Helping employers understand the economic impact of workforce development activities on their company.


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