Supporting the Demand Side: ETP Subcontracting as a Strategy to Expand Workforce Training for Employers

Israel Dominguez faced a major challenge. The task at hand: start a brand-new Contract Education program at Saddleback College – with no budget to get the program off the ground. 

The job of Contract Education at California community colleges is to help businesses and industries across the state stay competitive, within the U.S. and globally, by creating and delivering customized training programs for their employees. To compete and thrive, companies need a workforce trained in the latest technologies and processes. Because workforce training is their main focus, California community colleges, like Saddleback College in South Orange County, are well-equipped to deliver this training across a variety of industries.

But how, pondered Dominguez, Saddleback’s director of Economic and Workforce Development, was his college going to offer training to local employers when there was no money to get started? It’s a common challenge among new Contract Education programs. To deliver training for any business, he would need to hire an industry-specific trainer, whether it was an instructor at the college or an independent contractor, to teach the classes. 

While Dominguez was familiar with the Employment Training Panel (ETP), a state funding agency that reimburses the cost of employee training, without a staff to help administer this very involved funding source, he wasn’t in a position to land an ETP contract for his college. Plus, it takes about 90 days to be reimbursed through the fund, he said, and the trainer would need to be paid well before then. 

“If you have no budget, it’s almost impossible to cover the cost of training and wait to get reimbursed,” Dominguez explained.

Then, the answer came, in the form of a highly strategic collaboration between Saddleback College and El Camino College, located in neighboring Los Angeles County. Dominguez did some research and reached out to a contact at the college. What resulted is a show of resourcefulness, with the two colleges working together to make full use of an existing state resource – the ETP fund – to help businesses become more efficient and productive through highly trained employees.

The Employment Training Panel

The Employment Training Panel, created in 1982, reimburses the cost of employee training for businesses who run the biggest risk of losing to out-of-state competition or to those competing in the global economy. For this performance-based program, funding priority is given to these industries: agriculture; allied healthcare; biotechnology and life sciences; construction; green/clean technology; goods movement and transportation logistics; information technology services and manufacturing/food production.

California employers pay into this fund through a special payroll tax, the Employment Training Tax. ETP only provides funding – it doesn’t do the training. Eligible employers could opt to pursue their own contract with ETP and get reimbursed directly by the panel for training they provide to their employees, but such a contract requires a significant amount of monitoring and reporting and many employers don’t have the bandwidth.

That’s where community college Contract Education programs come in. If they have a big enough staff to handle the contract requirements, the program can secure a contract for ETP funding, which means the college – not the business – is responsible for providing customized training to employees and for handling monitoring and reporting, so the business is free to focus on other aspects of operations.

A Model for Success: ETP Subcontracting

When a Contract Education program doesn’t have the capacity to administer an ETP contract, as was the case with Dominguez at Saddleback College, a layer is added to the process: subcontracting. Contract Education programs that don’t have a big enough staff to administer their own ETP contract can become subcontractors for colleges that do have their own ETP contracts.

In Dominguez’s case, his college became a subcontractor for El Camino College, which had a contract with ETP. This allowed Saddleback College’s Contract Education program to provide ETP-funded training to eligible local employers, who must commit to paying employees for their training time, among other provisions. Once the training was completed, Dominguez billed El Camino College for the cost and received payment within a month – instead of the 90 days it takes to be reimbursed by the ETP agency – so Dominguez could pay the class trainer. Then, El Camino College would recoup the money it paid Dominguez through its contract with ETP.

In subcontracting, the colleges found a model for success, a way to help even more California businesses.

That was four years ago. Since then, Dominguez has also teamed up with the San Bernardino, Kern and Chaffey community college districts, serving as a subcontractor under their ETP contracts.

So far, for fiscal year 2019-20, Dominguez has 13 companies scheduled for training and his Contract Education program is projected to bring in $400,000. He plans to apply for an ETP contract for Saddleback College in 2019-20.

Dominguez is confident in the value Contract Education provides to local businesses and is aggressive in his efforts to recruit new clients by conducting intensive research and cold-calling prospects. 

“’We can upskill your employees, your workforce, at little or no cost,’” Dominguez tells business owners. “That’s a huge value statement right there.” 

More Colleges Using Subcontracting

Since Saddleback College signed on as a subcontractor for El Camino College, other California community colleges have gone this route to be able to deliver reimbursed employee training to local businesses. 

In Los Angeles County, ETP funding helped keep a small aerospace manufacturing business in operation, said Bellegran Gomez, director of Community Advancement and Economic Development at Cerritos College. The company needed to upgrade its employees’ skills in blueprint geometric dimensioning and tolerancing to meet the requirements of its contract with Boeing. However, it didn’t have a budget for training.

The Cerritos College Contract Education program was able to train 15 of the company’s 20 employees at no cost to the employer, thanks to the ETP funding Gomez had access to as a subcontractor. She subcontracts with El Camino College, Riverside Community College District and the Southeast Los Angeles County Workforce Development Board. Cerritos also provided 3-D software-modeling training to the business, as well as inspection and quality-control training. 

“They’re still a mom and pop shop, but they increased their technical skills so they could get other contracts, more work to help meet payroll and keep their workforce,” Gomez said.

Last year, Cerritos College provided workforce training for 25 companies that benefitted from ETP funding. 

At Shasta College in Redding, Lorrie Berry, program coordinator for Contract and Community Education, is getting ETP-funded training off the ground. A little over a year ago, her college teamed up with Butte College to offer Lean training and DDI leadership training to employers in the Redding area. Some of those employers had been sending their employees down to Chico in Butte County, more than an hour’s drive south, for these popular training programs.

The need for local training was clear.

“We hear what they say,” said Berry, whose college covers Shasta, Tehama and Trinity counties. “When they say we’re needing this particular training for this industry, it’s done.”

To make it happen, Shasta College became a subcontractor under Butte College’s ETP contract.

It’s been a help to SAF West, which has sent up to 10 employees to the trainings.

“ETP has really enabled them to utilize a lot of training under the ETP funding that they may not have otherwise been able to take advantage of or chosen to take advantage of,” Berry said.

Berry, who plans to one day grow enough so her Contract Education program can pursue its own ETP contract, sums up the value of ETP: 

“It strengthens the organization’s effectiveness, competitiveness and profitability through these programs that contribute to continuous workforce development,” she said.

Is your business eligible for ETP-funded training?

If your business is interested in ETP-funded training, check out this list of California community colleges that deliver this training, along with contact information. Learn more about Contract Education.

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