Building a Community: How local workforce boards help small businesses in California thrive

Small businesses are more susceptible to challenges like labor shortages, inflation and the COVID-19 pandemic. Workforce development boards can help, which is important for individual business owners and to California’s economy as a whole.

Why Small Business Matters

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

But by their very nature, small businesses are more susceptible to economic instability. Challenges like labor shortages, inflation and the COVID-19 pandemic have threatened their livelihood. This is where local workforce development boards can help find these businesses state and federal funding that provide a much needed safety net.

The Importance of Loans and Microbusiness Grants

Angelica Soliz has been in the childcare industry for over 30 years, but until 2020 she had never dealt with anything as challenging as the COVID-19 pandemic.

While many other daycares shut down during the initial stages of the pandemic, Soliz didn’t feel like that was an option. With a maximum capacity of 14 children, Angelica Soliz Family Child Care operates on a thin margin at the best of times. Beyond that, she felt an obligation to the parents of the children.

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

But staying open came with unexpected expenses. A large central table had to be replaced with individual desks for social distancing. Toys that couldn’t be washed had to be swapped out for ones that could. And most costly of all, the steam cleaning they employed to keep the daycare sanitized ruined their floors and walls.

“I didn’t know what to do. I was afraid the state would write me up because my floors were unsafe.”

It was around this time that Soliz heard about PPP loans. With the help of the Employers’ Training Resource, a department that serves as the administrative arm of the Kern County Workforce Development Board, she was able to fill out an application and get quickly approved. The funds went back into the business. She describes the process as “straightforward and easy.”

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

But even with loyal employees, none of it would have been possible without the help of her workforce development board.

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

What is Employers’ Training Resource?

As the name suggests, Employers’ Training Resource is focused on more than facilitating small business loans. Its central mission is to find and help train qualified employees for businesses in need. Thanks to the Workforce Innovation and Opportunities Act, ETR is able to fund 50% of the costs of on-the-job training for eligible employees. To qualify for WIOA funding, a worker simply has to fall in one of several categories: adult worker, dislocated worker, out-of-school youth, migrant or seasonal farmworker, and so on. Training can last anywhere from 160-480 hours, depending on the needs of the business.

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

“Businesses get a chance to try someone out without incurring all of the risk,” says Jeremy Shumaker, administrative services officer for ETR. “And the job seeker’s get a chance to prove themselves. It’s a win-win situation.”

On-the-Job Training Up Close

One person who has seen firsthand the benefits of on-the-job training is Angel Sanchez, CEO of Phenix Technologies, Inc. A company specializing in making helmets for firefighters, Phenix has been around for 50 years and is a marquee name in their industry. However, when Sanchez came on board in 2012, they were a “stable, but not growing, company.” They had just a handful of employees, many of whom were making minimum wage without benefits.

Phenix began working with Riverside County’s Economic Development Division on better business strategies. EDD serves a similar function to Employers’ Training Resource in nearby Kern County.

“EDD was revolutionary in getting us where we are today,” Sanchez says. “They assisted us in seeking candidates, because we didn’t know how to do that. They helped with labor analysis, so that we understood what we should expect to pay, and how much we could afford to grow. They helped us with recruiting and interviewing. They basically helped us build a workforce.”

Once Phenix had that workforce, EDD also helped with the cost of training. The type of manufacturing Phenix does requires skilled labor. This is huge outlay for a business like theirs, which due to the nature of manufacturing often doesn’t see a return on costs for six to nine months.

“We needed a way to make that happen,” Sanchez says. “The county was very instrumental in that, and has helped us through a number of on-the-job-training grants. And also identifying training opportunities. With a company our size, you don’t have the resources to put together an effective training platform.”

Now, with the help of EDD, Phenix has a skilled workforce of 37 employees. Turnover is low, at just under 10%, a fact Sanchez credits to the competitive wage, excellent benefits and equitable hiring practices. They’ve made a special point of hiring neurodiverse employees, formerly incarcerated employees and other high-risk individuals. They’ve developed a work-study program, an engineering intern program and an employee assistance program offering mental health, legal and marital counseling. While Phenix Technologies funds most of this themselves, none of it would have been possible without the leg up given them by their local workforce development board.

“They’ve just always been the ideal partner for a small business like ours,” Sanchez says. “Because of EDD, we’ve been able to build this community we have.”