By Andrea Applegate, Director of Workforce Development
Central Ohio businesses with plans to hire over the next weeks and months may be eligible to receive a reimbursement for wages paid to newly-hired, previously unemployed individuals (i.e., “dislocated workers” – see call-out box) for hours spent in on-the-job training. On-the-job training helps long-term unemployed workers gain new skills to find employment; it increases productivity and reduces turnover of new hires; and, through cash reimbursements that offset costs for on-the-job training, it provides incentives to businesses to hire the long-term unemployed.
Businesses are reluctant to hire. As a result of the worst recession in decades, many job seekers find themselves among the long-term unemployed. These individuals, who are otherwise qualified and possess excellent employment histories, face a variety of challenges to finding new jobs. They may be passed over for consideration because they lack specific skills and experiences required of an industry or occupation, or due to concerns that their skills have eroded. In an “employer’s market,” businesses can afford to be choosey. Right?
Unfortunately, that choosiness may do more harm than good. According to Federal Reserve Chairman, Ben Bernanke, who spoke about the economy on a panel at The Ohio State University’s Fisher College of Business, job creation is key to economic recovery. “Getting new jobs and getting unemployment down is of critical importance,” he said.
Funding through the federal Workforce Investment Act enables—even encourages—businesses to take a chance on potential employees by paying for on-the-job training (OJT) for those who are new to an industry or have been unemployed for an extended period. The skills gaps that these untested individuals possess can be readily addressed through OJT, and the costs employers incur for providing OJT will be offset through a reimbursement of wages paid. After all, employers often over-state their requirements. Indeed, many admit, “Give me a good person with a great work ethic, and I can train them to do the job.”
OJT has the dual benefit of helping dislocated workers get into employment and encouraging businesses to resume hiring. Because the attention paid in the probationary period ensures a good fit, OJT increases productivity and reduces turnover of new hires. In addition, because each employer defines the plan for on-the-job training, businesses can ensure that new employees are trained to their exact specifications.
As noted in a recent article in the Columbus Dispatch:
"The economy is growing again after the worst recession in decades, but not quickly enough to deal with what Federal Reserve Chairman Ben Bernanke said is the top problem -- a lack of jobs...Bernanke said an economy that lost 8.5 million jobs during the recession has added back only about 1 million so far."
Increase hiring by taking advantage of OJT. OJT funding is immediately available through a variety of programs, each with its own set of criteria. The level of reimbursement varies by program and is dependent on things like the size of the business, the wages paid, and the duration of the training plan. For one OJT program, the typical reimbursement is 50 percent of wages paid, capped at $8,000; for another, it can be as much as 90 percent, capped at $12,500. OJT is only applicable to individuals who qualify as dislocated workers. Funding is not retroactive. To take advantage of OJT, employers must make arrangements for it in advance of making hiring decisions. The Columbus Chamber’s workforce department can help individual businesses determine which OJT program is a best fit.
On-the-job Training. OJT introduces new employees to the industry and helps them learn the skills necessary to become proficient in the position (though OJT should not be confused with on-boarding). OJT is defined by the employer to address the specific needs of the individual new hire and is conducted by the employer, likely the new employee’s supervisor. OJT is short in duration, typically no longer than six months, but at least 160 hours, and results in specific measurable outcomes for the new employee. OJT may be particularly relevant for someone transitioning from one business sector or occupation to another (i.e., shifting from residential design to commercial design).
Last Word. OJT has a proven track record of helping unemployed workers gain new skills to find employment. OJT is a great resource for employers to help create jobs and increase hiring. Businesses should understand that OJT is not retroactive; therefore, employers must have an approved OJT plan in place for each candidate prior to that individual’s first day of work. Employers who plan to hire soon should contact Andrea Applegate (andrea_applegate@columbus.org or 614.225.6900) in the Columbus Chamber's workforce department for assistance.
Comments