How local labor boards are helping California small businesses thrive • Sacramento News & Review

Why small businesses matter

In 2020, California was home to over 4.1 million small businesses. These companies employed half of the state’s workforce and were responsible for nearly two-thirds of new jobs. To say that small businesses are vital to the California economy would be an understatement.

But by their very nature, small businesses are more susceptible to economic instability. Challenges such as labor shortages, inflation and the COVID-19 pandemic have threatened their livelihoods. This is where local Workforce Development Councils can help find those businesses the state and federal funding that provides a much-needed safety net.

The importance of microenterprise loans and grants

Angelica Soliz has worked in the childcare industry for over 30 years, but until 2020 she had never faced anything as difficult as the COVID-19 pandemic.

While many other daycares closed early in the pandemic, Soliz didn’t feel like that was an option. With a maximum capacity of 14 children, Angelica Soliz Family Child Care operates with a small margin at the best of times. Beyond that, she felt an obligation to the children’s parents.

“A lot of them work in the medical industry,” says Soliz. “They couldn’t just call. It was necessary for us to stay open.”

But staying open has come with unforeseen expenses. A large central table had to be replaced with individual desks for social distancing. Toys that couldn’t be washed had to be replaced with ones that could. And costliest of all, the steam cleaning they used to keep the daycare sanitized ruined their floors and walls.

” I did not know what to do. I was afraid that the state would write to me because my floors were unsafe.

It was around this time that Soliz heard about PPP loans. With the help of the Employer Training Resource, a department that serves as the administrative arm of the Kern County Workforce Development Board, she was able to complete an application and get approved quickly. The funds are returned to the company. She describes the process as “simple and easy”.

“I am very grateful for the loan and the grant. Without them… well, I don’t know what would have happened.

Angelica Soliz, daycare owner

In addition, thanks again to ETR, she was able to receive a $2,500 microenterprise grant. She used that money to give a bonus to staff who stayed with her during the pandemic. She recognized that they were essential to her ability to stay open.

But even with loyal employees, none of this would have been possible without the help of its workforce development council.

“I am very grateful for the loan and the grant. Without them… well, I don’t know what would have happened.

What is the training resource for employers?

As the name suggests, Employers’ Training Resource does more than facilitate small business loans. Its central mission is to find and help train qualified employees for companies in need. Through the Workforce Innovation and Opportunity Act, ETR is able to fund 50% of on-the-job training costs for eligible employees. To qualify for WIOA funding, a worker simply needs to fall into one of the following categories: adult worker, displaced worker, out-of-school youth, migrant or seasonal agricultural worker, etc. The training can last from 160 to 480 hours, depending on the needs of the company.

Subsidized on-the-job training has multiple benefits. By focusing funding on communities in need, WIOA improves fair hiring practices. And from a business perspective, more in-depth training improves worker productivity, satisfaction, and retention.

“Companies have the opportunity to try someone out without incurring all the risk,” says Jeremy Shumaker, head of administrative services at ETR. “And the job seeker has the chance to prove himself. It’s a win-win situation.

On-the-job training up close

One person who has seen the benefits of on-the-job training firsthand is Angel Sanchez, CEO of Phenix Technologies, Inc. A company specializing in manufacturing helmets for firefighters, Phenix has been around for 50 years and is a name renowned in their industry. . However, when Sanchez came on board in 2012, they were a “stable company, but not growing”. They had only a handful of employees, many of whom earned minimum wage with no benefits.

“EDD was groundbreaking in getting us to where we are today,” says Sanchez. “They helped us look for candidates, because we didn’t know how to do it. They helped with labor analysis, so we understood what we should expect to pay and how much we could afford to grow. They helped us with recruitment and interviews. They basically helped us build a workforce.

Angel Sanchez, CEO of Phenix Technologies, Inc.

Phenix began working with the Riverside County Economic Development Division on better business strategies. EDD performs a similar function to the Employer Training Resource in neighboring Kern County.

“EDD was groundbreaking in getting us to where we are today,” says Sanchez. “They helped us look for candidates, because we didn’t know how to do it. They helped with labor analysis, so we understood what we should expect to pay and how much we could afford to grow. They helped us with recruitment and interviews. They basically helped us build a workforce.

Once Phenix had this workforce, EDD also contributed to the cost of training. The type of manufacture of Phenix requires skilled labor. That’s a huge expense for a business like theirs, which, due to the nature of manufacturing, often doesn’t see a return on cost for six to nine months.

“We needed a way to do that,” Sanchez says. “The county has been very instrumental in this and has helped us with a number of on-the-job training grants. And also identify training opportunities. With a company our size, you don’t have the resources to set up an effective training platform.

Today, with the help of EDD, Phenix has a qualified workforce of 37 employees. The turnover rate is low, at just under 10%, a fact that Sanchez attributes to the competitive salary, excellent benefits and fair hiring practices. They have made a point of hiring neurodiverse employees, incarcerated ex-employees, and other high-risk individuals. They have developed a work-study program, an engineering internship program, and an employee assistance program offering mental health, legal, and marital health counseling. Although Phenix Technologies is funding most of this itself, none of this would have been possible without the help given to them by their local Workforce Development Council.

“They have always been the perfect partner for a small business like ours,” says Sanchez. “Thanks to EDD, we were able to build this community that we have.”

To learn more, visit https://calworkforce.org/

Michael A. Bynum