How the state’s Going Pro funds boost workers’ skills and pay

A few years out of high school, James Golden is already ahead of the financial curve for his generation. The 21-year-old is taking classes to be a machinist at Muskegon Community College while working at Fogg Filler.

The Holland Township manufacturer is not only paying for Golden’s education, but accelerating his learning with on-the-job training.

James Golden works on his machine at Fogg Filler.Golden, who is living with his parents so he can save money, will be buying a house within a few years, when many at his age will be graduating from college with a mountain of debt.

“In most shops, it would take a long time to get to where I'm at, but I’ve been fortunate to work for Fogg Filler,” says Golden, who graduated from Grand Haven High School in 2017.

Golden’s success is being replicated across Fogg Filler, where on-the-job training is raising skills and wages.

Building a talent pipeline

Since 2014, the state has provided competitive funding through Michigan Works! agencies for employers like Fogg Filler to train new hires and existing employees. But the funding has fallen victim to a dispute between the Michigan Legislature and Gov. Gretchen Whitmer over budget priorities.

A solution could be on the horizon. In January, state Sen. Ken Horn, R-Frankenmuth, introduced Senate Bill 752 to the appropriations committee. The bill would allocate $36.5 million for Going PRO training.

Jacob Maas, CEO of West Michigan Works!, which covers a seven-county region on the state’s west side, credits the program with strengthening the state’s talent pipeline.

“Lack of funding will jeopardize their ability to invest in their workforce and in the economic well-being of our region, especially in regard to starting and maintaining apprenticeship programs and up-skilling workers,” Mass says. “We are greatly appreciative of Sen. Horn’s leadership and willingness to support our region and its workers.”

The funding distributed by the workforce development agency has been seen as an effective way to help employers struggling with a skilled labor shortage and facing a projected workforce gap of more than 500,000 by 2026.

In 2019, the Going PRO Talent Fund awarded $32 million in 898 grants that helped pay for training more than 25,000 workers. The majority of the training was used to increase the skill set of nearly 6,000 new hires, though 75% of training benefited existing employees.

Those new skills boosted hourly wages by nearly $3 to just over $27, an average annual increase of nearly $6,000.

Since the program began in 2014, nearly $100 million has been awarded to more than 3,000 businesses across the state, contributing to the retention of 72,542 jobs. Last year, 223 West Michigan employers were able to train 2,423 existing workers and 4,447 new hires with Going PRO awards totaling $9.5 million.

James Golden works on his machine at Fogg Filler.Crucial training funds

Fogg Filler is one of 350 employers across West Michigan waiting to hear whether the program’s funding will be restored. The training grants have been crucial to the company’s recent growth. Fogg Filler contributes 60% or more to the cost of the training.

Demand for its machines has propelled the third-generation family business to annual sales of $30 million. Fogg Filler makes custom machines that fill bottles for customers in a range of industries, from wine to juice, vinegar to water.

“Almost every new hire needs training because the skills gap is huge,” says Dustin Bruse, the company’s machine shop manager and Golden’s boss. “Over the past two years, we've probably taken 50% of employees in the machine shop alone through training. That has directly affected pay-scale increases and more opportunities.”

The training has led to “substantial wage increases,” confirms Business Manager Mary Pathuis, declining to give specifics about wages or percentage of pay increases. “The level of up-skilling is leading to many promotions within the company like team leader, management, and supervisor levels.”

While critics contend these training dollars amount to little more than corporate subsidies, supporters say the funding is an investment that is delivering a solid return.

Howie Stieber is the materials manager at Fogg Filler.“This investment is relatively small versus the long-term gain,” explains Howie Stieber, Fogg Filler materials manager. “Our profits have increased, so we pay more taxes. We employ more people, so they pay taxes. When they're making better income, they're paying higher taxes.”

Required to invest

Applications are funded based on demonstrated need and the merits of the training plans, which must be customized and often created in partnership with local community colleges and training institutions to address specific training needs.

Employers are required to invest in the program, and the training must lead to a transferable, industry-recognized credential, so the program is building a skilled workforce that benefits the entire state.

Employers in West Michigan have consistently received more than 20% of the state’s available funds. That has translated into thousands of workers receiving skills for today’s high-demand jobs. It has also made it possible for employers to grow their businesses and compete on a local, national, and global scale, says Jane Kreha, marketing and communications director for West Michigan Works!.

The funds benefit primarily small to midsize employers like Fogg Filler who need assistance developing training programs and creating career pathways for employees.

There are 368 West Michigan employers — including 179 who never applied before — who submitted requests for Going PRO funds totaling $15 million.

The state estimates that 22,000 Michigan workers will be denied critical training and potential salary gains if the Talent Fund monies are not restored. The delay is already impacting companies, because training usually takes place in the first quarter of the calendar year, according to Kreha.

The focus on training employees has become continuous in recent years because new technologies are evolving the manufacturing process, explains Bruse, Fogg Filler’s machine shop manager.

“The way we approach our work is different now. We need a higher caliber of individual on the floor working with the engineering team than we ever have before,” he says.

This article is part of The Lakeshore, a new featured section of Rapid Growth focused on West Michigan's Lakeshore region. Over the coming months, Rapid Growth will be expanding to cover the complex challenges in this community by focusing on the organizations, projects, programs and individuals working to improve conditions and solve problems for their region. As the coverage continues, look for The Lakeshore publication, coming in 2020.
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