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This state will pay workers up to $2,000 to upgrade their tech skills

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Over the years, major companies ranging from AT&T to IBM have poured billions of dollars into training programs to encourage workers to level up their technology skills and fill a widening pool of unfilled tech jobs.

And in January, the state of Ohio joined the ranks of organizations working to solve for the talent shortage. Gov. Mike DeWine signed a bill into law that commits $17.5 million a year to businesses who will pay for employees to upgrade their technology skills.

Part of this initiative is through the state's TechCred program, which will reimburse up to $2,000 per employee, and up to $30,000 per employer, when a business pays for a current or prospective worker to earn an industry-recognized technology-focused credential, including those from Google Cloud, AWS, Oracle, Microsoft Azure and more.

"There are lots of job training programs for people who are unemployed," Ohio Lt. Gov. Jon Husted tells CNBC Make It, "but when you have sustained low unemployment like this in the country and Ohio, your future workforce is your present workforce — we need to find a way to upskill them."

TechCred recognizes 379 certificates (earned after completing a series of courses) or certifications (earned after passing a competency assessment) in tech skills related to business, health care, cybersecurity, military and smart transportation, construction, information technology, manufacturing and robotics.

Participants must apply to the program, and applications are scored competitively based on several factors. One factor is how much the employer expects to raise the worker's wages after completing the program, whether that's through a raise, change of job function or promotion.

"If we're going to invest these dollars, we want to upskill people who will earn more and in turn create more productivity for their employer, and we want the employee to share in that," says Husted, who serves as director of the Governor's Office of Workforce Transformation.

TechCred completed its first round of applications in October 2019, and state funds were awarded to 1,576 workers from 234 employers. Its second round of applications closed in January, and Husted expects more funding will be distributed throughout the year.

How the program works

Grob Systems is a German-owned manufacturing company with 560 employees at a machine shop in Bluffton, Ohio. The company partnered with TechCred in October for its apprenticeship program, which has been in place for over 30 years.

Through Grob's four-year apprenticeship, high-school graduates are brought on as full-time employees and receive on-the-job technical training as well as a company-paid associate's degree through a local college. Last fall, the company identified eight second-year apprentices to earn a credential through TechCred, says apprenticeship training supervisor Mark Reed.

"Our training staff works together with our local community college to determine which certificate and upskill credential our apprentices should be working toward and then fills out the application for each of the apprentice that is enrolled," Reed tells CNBC Make It. "The TechCred program allows us to provide additional training opportunities for our apprentices."

The hope is that, while these additional courses may be outside the Grob apprenticeship curriculum, trainees will bring the new skill or certification into their future jobs with the company, Reed adds.

Like Grob, many of the companies who have taken part in TechCred so far are in manufacturing. Husted acknowledges these organizations may just be more attuned to these training initiatives, and the public funding available for it, due to the changing nature of the industry.

"We have zero marketing budget for this program, but it's being snatched up as an opportunity pretty swiftly as employers learn about it," Husted says. In Ohio, he says, "Our goal is to upskill 10,000 people a year, and we believe we're on pace to achieve that goal."

With TechCred, Ohio joins a number of states with workforce training programs in place. Massachusetts, for example, awards roughly $14 million per year to companies to train employees in a number of areas ranging from software and IT to customer service and management.

Recent initiatives at the federal level to retrain workers in crucial technology skills include the Pledge to America's Workers, launched in 2018. The initiative, which provides no federal funding or financial incentive for companies who commit, encourages job providers and trade organizations to commit to educating, training and reskilling America's workforce.

More than 300 companies — including Apple, Salesforce and Lockheed Martin — have agreed to train more than 12 million people, according to the White House.

However, many companies have acknowledged that the program sets few standards for employers to meet and carries no repercussions if they fall short, according to Bloomberg. Others note their training pledges to the White House initiative encompass programs they already had in place, CNN reports.

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