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

This material is copyrighted by MAGNET. Reproduction of this material is by permission only.

Measuring the Economic Impact of

Training and CertificationDr. Judith Crocker

Director, Workforce and Talent Development

1768 East 25th Street., Cleveland, OH 44103; (216) 432-5300; (800) 669-2267


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.

Who We Are:

http://www.odod.state.oh.us/tech/edison/tiedc.htm

http://www.mep.nist.gov/

http://en.wikipedia.org/wiki/File:US-DeptOfCommerce-Seal.svg


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)


• 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.”


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


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


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


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


Pilot Results

Companies: 23Participants: 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


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


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 CreatedJobs created = number of employees hired + estimated hires by 12/31/11

Jobs created = 5 hired + 3 est. hires = 8


Sample E.I . Questions

Retained SalesEstimate 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


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


Preliminary Data

Five Responded to Date

Jobs Created 10

Retained Sales $2,000,000

Increased Sales $250,000

Investment in Plant/Equipment

$6,000,000

Workforce Practices $50,000


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.”


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.”


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

.

Documents

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