Established in 1982, the Employment Training Panel (ETP) has proven itself for 30 years as the state’s premier program supporting job creation and retention, through training. ETP is funded by a special tax on California employers and differs from other workforce development organizations whose emphasis is on pre-employment training. ETP fulfills its mission by reimbursing the cost of employer-driven training for incumbent workers and funding the type of training needed by unemployed workers to re-enter the workforce. Overall, the ETP program helps to ensure that California businesses will have the skilled workers they need to remain competitive.
Employers must be able to effectively train workers in response to changing business and industry needs. While the need for workforce training is critical, businesses generally reserve capacity building dollars for highly technical and professional occupations – limiting investment in training for frontline workers who produce goods and deliver services. ETP helps to fill this gap by funding training that is targeted to the frontline workers.
ETP funding works because it is predicated on simple and effective principles:
- Employers make decisions about the training program. Employers are involved in every aspect of training. Companies assess their training needs, customize curricula to address the specific needs of their businesses, and implement and administer the training plan.
- Training investments help companies become more profitable, so companies are encouraged to share that profit with workers involved in training. ETP contracts promote wage increases and require employers to retain trained workers for specific periods in order to earn ETP funds.
- Employers are encouraged to assume greater responsibility for training. ETP reimburses contractors based on flat rates. Companies must pay the difference between ETP reimbursement and their actual training costs. As training costs increase, companies pay a larger percentage of the costs.
- Performance-based contracting helps to ensure success. A business may earn ETP funds only after a trainee completes all training and is retained for a minimum time period (normally 90 days) at a required wage, in a job using the skills learned in training. Other performance requirements ensure that each stakeholder – the company, the worker, and ETP – shares responsibility for expanding the numbers of high-wage, high-skill jobs in California.
- ETP funding is a catalyst for future workforce training. Employers who participate in ETP-funded training are more likely to invest in future workforce training. The ETP experience provides them with the practical knowledge and tools to successfully implement a training plan.
ETP’s role in the economy is derived from its initial mandate in 1982 of moving large numbers of unemployed workers quickly into employment and saving the jobs of workers threatened with displacement. The program has expanded that role over the years to include an increased support of retraining incumbent workers of businesses in basic industries challenged by out-of-state competition (primarily the manufacturing and high technology sectors). Today, ETP focuses on supporting job creation and business attraction, retention, and expansion, as well as the re-employment and retention of workers.
ETP is also strengthening the partnership with the Governor’s Office of Business and Economic Development (GO-Biz), the Governor’s single statewide point of contact for economic development and job creation efforts. GO-Biz, which includes the Governor’s Small Business Advocate, the state Innovation Hub (iHub) program and incorporates functions of the former California Business Investment Services (CalBIS), offers a range of services to business owners including: attraction, retention and expansion services, site selection, permit streamlining, clearing of regulatory hurdles, small business assistance, and international trade development, and general assistance with state government. In July of 2013, the Director of the Governor’s Office of Business and Economic Development (GO-Biz) was appointed to the Employment Training Panel serving as an ex officio, voting member.
ETP also keeps pace with statewide economic initiatives and workforce priorities such as targeting training for ex-offenders/at-risk youth, veterans, workers impacted by the downturn in the housing market, and supporting the growth in the green economy. And to this end maintains strong partnerships with the California Workforce Development Board (CWDB) (formerly CWIB) and the California Workforce Association as well as other workforce development organizations throughout the State.
ETP has historically accomplished its mission without appropriations from the State General Fund or alternative sources of funding. The core ETP program is funded by a special Employment Training Tax (ETT) paid by California employers, and only employers subject to this tax directly benefit from the program. In the last few years, however, ETP has received additional funding for alternative programs aimed at training unemployed workers for jobs emerging in the recovering economy. The additional funding is principally through distributions from the Employment Development Department and the California Energy Commission (CEC). ETP anticipates ongoing commitments for additional funding.