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Utah program helps small businesses with hiring, training costs

Published: Thursday, June 27 2013 3:14 p.m. MDT

Arches Health in Salt Lake City Wednesday, June 26, 2013. The Department of Workforce Services uses a bridge program that helps small companies provide training so they can hire new employees.

Jeffrey D. Allred, Deseret News

SALT LAKE CITY — Hiring qualified people is a challenge facing virtually every company in Utah. Being able to afford to train them can be especially difficult, particularly for a recently launched startup, given today’s prevailing economic conditions.

Nate Johns, chief financial officer for Arches Health Plan — a nonprofit, member-run health insurance provider located in Salt Lake City — has learned that lesson firsthand. For years, he was his own boss as an entrepreneur operating a payroll company and had also been an accounting executive in his previous career.

When the chance came to move into the expanding health care industry last November, he felt it was too good to pass up.

“I saw a great opportunity to make a change in the landscape of health care,” he explained. “We have a blank slate with which to rewrite the rules for how a health insurance company works with its members.”

Johns was one of the first people in his company to participate in the Utah Department of Workforce Services’ Small Business Bridge Program when he received training on new federal health care accounting regulations. He said the training helped him to better understand the rules pertaining to his position as CFO of a health insurance company under the Affordable Care Act.

As for the program benefits, the company can save valuable resources that can translate into more jobs in the long run.

“We were a small organization just starting off,” said Lourdes Cook, human resources manager. “(The bridge program) was really impacting on our expenses.”

Johns said, “It helps us reduce our overhead costs and the state is providing tax incentives for new jobs to be created. This program helps to make things a little more affordable and helps us create (job opportunities).”

In 2012, the Department of Workforce Services created the Bridge Program to support small businesses. The grant provided a limited reimbursement opportunity to qualifying businesses that incur training costs from the creation of new jobs.

The program provides up to $4,500 for each new job created.

The reimbursement is important for small businesses, as hiring and training costs can be a significant barrier to creating new jobs, said Benjamin Hart, DWS director of Employer Support Initiatives.

“Small businesses make up the backbone of the state’s economy and helping them expand will further sustain our communities,” he said.

The program is funded by the Unemployment Insurance Special Administrative Fund. During 2012, applications from 133 small businesses were approved, which are scheduled to create 659 new jobs, Hart said. This year, 51 applications have been approved, creating 250 jobs. The 2013 program year will continue until Feb. 28, 2014, or until all funding has been obligated.

Of the 133 applications approved during the 2012 program year, 118 were outside Salt Lake County, with 73 applications received from rural counties.

"Having extra employees and extra time to train them allowed us to take on projects we might have passed on,” said Scott Anderson, founder of Triassic Industries in Moab. “I was psyched about this program because of its incentives. The money is way better spent than paying for unemployment."

Nearly $3 million has been obligated to Utah businesses as part of the program, Hart said.

Currently, there is $2 million budgeted to continue the program in the next fiscal year, which will run from July 1 until June 30, 2014.

“We fully anticipate continuing the program into the 2014-2015 budget year, with a similar level of funding, if not more,” Hart said.

The program is one of the few grant programs that provides help for small businesses to grow, he noted.

“Helping small businesses expand will ultimately provide significant returns as these businesses grow to bring on new employees,” he said. “Helping these companies expand locally will ensure they stay in Utah to sustain our local economy.”

Typically when small businesses grow, the money stays local and is usually reinvested in local communities, he said.

“In addition, we see a lot of businesses in rural communities that are applying to the Bridge program. This is very important as every job matters in many of the rural parts of the state,” Hart said. “The long term vision for the Bridge program is really to help our small business grow to become strong medium and large employers.”

Basic guidelines

Businesses must have less than 100 employees

Jobs must pay at least 80 percent of the County Small Business Average Wage to qualify

Newly created jobs cannot be seasonal or temporary and must be in addition to current staffing levels

Businesses must apply, be approved and sign an agreement before hiring employees. The program is post-performance, so employees must be hired and trained prior to invoicing DWS

Businesses must be current on Unemployment Insurance reports and contributions

Email: jlee@deseretnews.com, Twitter: JasenLee1

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