Hiring managers know that every new hire requires training, but Human Resource Departments are not aware of programs that exist to help and will provide financial reimbursements and/ or tax credits. I realized this when I attended a job fair two months ago, and with another job fair on January 14, I am offering these best practices to be aware of.
This article summarizes some of the best practices that the local group of execs have identified and implemented. The CFO Forum is a group of more than 40 executives who meet monthly at the Manufacturers Resource Center to address common issues and learn from each other, as well as the experts who are invited to share their expertise. In our group, only 20% were aware of any of the following programs and credits. And some who were aware discovered that HR chose not to use the programs or apply for the credits. The programs are available for nonprofit firms as well as for-profit businesses. Small and large firms are eligible.
I have highlighted two programs that reimburse employers for training new hires (there are also programs to help with training the existing employees but that is a different topic.)
The On the Job Training (OJT) Program provides work-based training opportunities for new hires who are either a low-income adult and/or a dislocated worker. It provides the skills needed for occupations that are listed as high priority occupations (HPO), or located within a targeted industry cluster. Targeted industries include; manufacturing, transportation and logistics, healthcare, finance, construction, and professional, scientific, and technical services.
This program is administered by Careerlink and can reimburse the employer up to 50% of the wage for each new hire and may cover up to a maximum of the first six months of employment for time spent by the employee learning the skills, processes and other requirements of the position. Jobs must be full time, benefits eligible and pay at least $13 per hour. A maximum of $12,000 per new hire is possible, but all on-the-job training situations are evaluated on a case-by-case basis, so reimbursement amounts can and do vary.
Over 60 positions are defined as HPO and candidates who are unemployed or under employed may qualify. The firm, position and candidates have to be prequalified before they start. This can be easily accomplished by working with Careerlink experts in Allentown. At least 50% of the hourly compensation will be reimbursed on a monthly basis and the process is actually a best practice for identifying and managing training of a new employee. Using OJT as a process impresses candidates and differentiates the firm in a difficult hiring environment.
The second program financially incentivizes employers to consider job seekers who might be overlooked due to a spotty or inconsistent work history. The Transitional Subsidized Employment (TSE) program identifies candidates and can help employers fill positions. TSE funding provides reimbursement for 75% of the wages paid for up to a 500 hours. The positions must be full time (at least 35 hours) and be either an HPO or located within a targeted industry cluster. Frankly, candidates may have spotty work history, lack of work experience, participated in a food stamp or similar program or other challenges and this program is designed to encourage employers to consider hiring these candidates. Again, Careerlink administers this program and does an excellent job to minimize the administration, recruitment and onboarding challenges. If you are not partnering with Careerlink, I encourage you to. Careerlink LV is very employer friendly.
As I mentioned, few employers are aware of these programs and even fewer optimize their use. Similarly, most employers are not aware of various tax credits and other incentives that may exist. Another best practice that we have reviewed is how to receive the Work Opportunity Tax Credit, a complex federal credit that is managed via Harrisburg. The WOTC program is inefficient admistratively, however there are best practices that can be implemented to ease the process. The credit ranges from several hundred dollars to more than $9,000 for the eligible new hire.
It’s complicated, but worth it.
Gary Bender is founder and CEO of The CFO Solution in Quakertown. He can be reached at firstname.lastname@example.org or at 215 421 8291.