How state governments can help revitalize workforce development

Siloed and disjointed workforce development ecosystems can’t keep up with the dynamic needs of today’s economy. Isolated departments across government, business, nonprofits and academia are sometimes too slow to adapt to new workforce needs or to adjust to new technologies—resulting in significant skills gaps and talent shortages.

To keep pace, state agencies across the country can help address current workforce challenges by helping employers evolve and providing workers with more opportunities to learn new skills. This effort starts by viewing workforce development efforts in the broader context of an ecosystem, and then deploying key tools to enhance how educators, businesses and individuals work together to strengthen local economies.

This may seem like a tall order, but many states have already initiated programs to support their workforce development ecosystem. Here are four examples that offer some promising ideas about how state governments can help local workforces thrive.

• EARN Maryland: States that focus on helping underserved workers secure meaningful employment opportunities can improve the health of their workforce development ecosystems. By recognizing that individuals come from different backgrounds and circumstances—and, as a result, have different employment journeys—states can identify paths for long-term career success. Targeted programs aimed at disadvantaged populations, like the formerly incarcerated or unhoused, make a big difference. Mobilizing nonprofits and other organizations to reach these people and provide training opportunities plays an important role too.

That’s what Maryland is accomplishing through EARN MD, which funds training programs for in-demand jobs based on employer proposals. Eighty-four percent of the approximately 4,500 individuals who completed EARN MD training found jobs by February 2020. By October 2022—with additional support from the state—more than 11,000 incumbent employees earned new credentials, certificates and skills through EARN’s programs and more than 8,000 new EARN program participants found jobs.

• South Carolina’s Apprenticeship Program: Key participants in the workforce development ecosystem must work together in close coordination. But all too often, employers, educational institutions and nonprofits focus too narrowly on their own unique missions and challenges. By spurring more collaborative efforts between these organizations, state governments can help employees receive skills training and educational programming for in-demand jobs.

The state of South Carolina is making this a reality through its apprenticeship program, which offers employers a $1,000 tax credit for each individual they sponsor for an apprenticeship. In November 2021, the program supported nearly 40,000 re-skilled or upskilled apprentices and engaged nearly 1,200 participating companies.

• Pennsylvania’s Skills-Based Hiring: In an effort to improve workforce development, states can also serve as a model employer. By investing in training or reskilling, re-evaluating degree requirements or adopting flexible work arrangements, states can set an example for private sector employers to follow.

In Pennsylvania, one of Governor Josh Shapiro’s first executive orders was to eliminate the four-year degree requirement for more than 65,000 positions in state government. Now, 92 percent of state jobs are accessible to anyone with the right experience or skills, regardless of their education. Maryland and Utah have also removed degree requirements for many state and local government jobs.

• New Jersey’s Return to Earn: Policies play a major role in advancing workforce development goals, helping to incentivize desirable actions, and cultivating mutually beneficial relationships among employers, jobseekers, academia and government agencies. Things like accepting certifications in lieu of degrees, providing tax benefits for companies that offer entry-level training, and streamlining licensing requirements can have considerable impacts on the workforce development ecosystem.

For example, New Jersey’s Return to Earn initiative uses federal American Rescue Plan Act (ARPA) resources to benefit both employers and employees. Through an incentive program, employers receive wage subsidies for workers they train and hire. At the same time, unemployed workers who reenter the workforce full-time are eligible for training as well as a $500 bonus with their first paycheck.

With regular engagement and sustained resources, these types of programs can continue to create meaningful career pathways and drive even more positive economic outcomes for American workers. And with continued collaboration, workforce development ecosystem partners—businesses, workers, higher education organizations and policymakers—can successfully invest in today’s workforce needs, overcome current challenges and expand economic growth and opportunity for years to come.

John O’Leary leads state and local government research efforts for the Deloitte Center for Government Insights. Prior to joining Deloitte, he served as the vice president of communications and executive reporting with State Street Bank.