Measuring the Economic Impact of
Training and Certification
Dr. Judith Crocker
Director, Workforce and Talent Development
1768 East 25th Street., Cleveland, OH 44103; (216) 432-5300; (800) 669-2267
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Who We Are:
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.
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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)
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• 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 costsavings, 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.”
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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
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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
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Pilot Process
Solicited partners from members of Working Group &
their networks
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
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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
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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
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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
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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
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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
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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
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Preliminary Data
Five Responded to Date
Jobs Created
10
Retained Sales
$2,000,000
Increased Sales
$250,000
Investment in
$6,000,000
Plant/Equipment
Workforce Practices $50,000
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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.”
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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.”
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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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