Workforce and economic development
Building durable, thriving regional economies and a skilled, empowered workforce
Closing the workforce gaps in the labor market is a pressing concern across industries and geographies.
Attracting and retaining skilled talent is crucial for economic growth. The dire need for workers persists across most industry sectors as we head into 2024—most prominently in childcare, teaching, restaurants, hospitality, healthcare, technology, manufacturing, and government. Despite low unemployment rates, the U.S. Chamber of Commerce reports 9.5 million unfilled jobs and only about 6.5 million job seekers to fill them. At the end of 2023, several hundred thousand U.S. government jobs were still unfilled.
Looking ahead, the gap between available jobs and workers with the necessary skills could contribute to potential economic slowdowns. These gaps continue to be fueled by an aging workforce and rapidly changing technological advancements that require new skillsets, normalization of post-pandemic hybrid work arrangements, and growth of the gig and green economies. The speed at which we can address workforce gaps in our local economies depends upon the effective collaboration and interoperability between economic development, workforce development, and education organizations.
Here are five trends we're observing that will be crucial to building a more resilient and prosperous economy in 2024 and beyond:
Skills over degrees: Pathways that meet industry needs through partnerships
No wrong door portals: Interoperability between workforce, education, and economic development programs
Wage replacement program modernization: Evolving how government provides economic security and stability for workers and families
The right strategy for the right community: Accelerating BEAD (Broadband, Equity, Access, and Deployment) to bridge the digital divide
Place matters: Regional focus on 'placemaking' and resilience to attract talent and industry
Over $1 Billion is still available for state investments in workforce development across federal stimulus packages, specifically IRA, IIJA, CHIPS, and SCIENCE ACT.
1. Skills over degrees: Pathways that meet industry needs through partnerships
Our existing 'learner-to-worker' pathways aren’t matched to the workforce skills needed for local economies to thrive. In the U.S., most jobs require skills training beyond high school, but not a four-year degree. According to the National Skills Coalition, only 43% of workers have access to the training necessary to fill in-demand jobs. Even countries known for their strong vocational training systems, such as England and Germany, face challenges in upskilling and reskilling workers to keep pace with technological advancements.
New types of jobs are emerging at a rapid pace, driving the creation of previously unimaginable career paths, such as drone operators, AI prompt engineers, augmented reality developers, 3D printing specialists, and genomics counselors. Experts predict that 85% of the jobs available in six years have yet to be invented, leaving teachers with the challenge of preparing students for a future currently unknown.
Labor and workforce agencies are fielding increasing numbers of requests from employers, job seekers, and education partners seeking help with reskilling, upskilling, and next-skilling. For example:
Employer’s operations and profitability are being negatively impacted because they aren't able to fill time-sensitive job openings. When the role is a new type of job that didn't previously exist, employers often hire new employees with the necessary skills instead of developing the skills of existing employees.
Jobseekers are overwhelmed by the myriad of entry points that they must navigate to access government support, such as the certifications or programs that enable them to get the next or a better job.
Higher education institutions face pressure to prepare students, not just academically, but also with the practical skills and competencies most needed by employers. Educational curricula in some areas may be lagging, or mismatched, with industry needs.
Adult learners have a better chance of realizing their potential when business, education, and workforce organizations align how they work together. When education institutions partner with companies to align career readiness with workforce demands, students can access more real-world experiences, such as apprenticeships, co-op programs, and 'soft skills' that are crucial for career success, like teamwork and problem-solving. Following are actions and models to consider as we accelerate our ability to meet industry needs and create options for learners to realize career, economic, and social mobility.
Check out your state's Skills Mismatch Fact Sheet.
Actions and models to consider: We're seeing growth in collaborative and targeted partnerships among industry, institutions of higher education, and community organizations to create accelerated 'learner-to-worker' pathways, including pathways that are accessible to 'hard to reach' or underserved populations. Below are leading models that are emerging across the U.S.:
Industry-specific skill accelerator programs for in-demand manufacturing, healthcare, technology, and green jobs are funded by partnerships between community colleges, businesses, and workforce development agencies. Take Apprenticeship Colorado as an example. Led by the state's Office of the Future of Work, it is accelerating access to apprenticeship programs that create a future-ready talent pipeline. Another example is Jobs for the Future, a partnership between Google, community colleges, and employers to train and certify adults in high-demand careers in the fields of data analytics, digital marketing, and experience design in just eight months.
Workforce development and industry skill councils consisting of employers, educations, and workforce agencies that establish industry-specific skill standards and training to address workforce needs. State and regional sector partnerships, such as those created by the State of Connecticut. These partnerships bring together businesses, educators, and policymakers to direct implementation of solutions to the state's worker shortage crisis.
Micro-credentialing programs that are accredited by universities and recognized by employers. These programs allow workers to acquire specific certifications without completing full degrees. For example, the Build Better Careers Initiative creates short-term training programs that meet financial services industry needs nationwide through partnerships between postsecondary institutions, the financial services sector, and workforce development organizations.
Peer-to-peer mentorship programs, that connect experienced workers with jobseekers in the same industry. One example is Oregon's Peer-to-Peer Employment Project, which is a cross-sector partnership that uses peer mentoring to educate, inspire, and encourage people with developmental disabilities to find local jobs.
Some agencies are offering skills tax credits, wage subsidies, grants, and other incentives to encourage businesses to invest in employee training and upskilling programs. Take Canada's Investment Tax Credit for Skills Development and the US Department of Labor's Apprenticeship Grant Program.
2. No wrong door portals: Interoperability between workforce, education, and economic development programs
The work performed by secondary and higher education, workforce development and business organizations is intertwined yet typically operates in organizational, data, and technical silos.
This fragmentation means that learners, workers, and employers must go to numerous different websites or physically visit different building locations to fill out multiple intake forms or applications (often asking similar questions) to access the valuable career planning, job training, education, and employment matching support available to them.
We're already observing how states can break down these silos through increasing use of unified customer portals (front-end) combined with back-end data hubs with 'federated' data management approaches. Several states are leading the way in using human-centered design approaches to map out the end-to-end learner-to-work journey and build 'one-stop-shop' portals, including Colorado, Connecticut, and Florida. Once implemented, these ‘no wrong door’ portals will make it easier for people to access seamless 'learner-to-worker' pathways, and accelerate efforts to close workforce and skill gaps in our local economies.
Additionally, a growing number of governors and mayors are appointing Chief Workforce Officers who oversee and bring together cross-sector partnerships across a region or state to plan and implement interoperability initiatives.
By fostering seamless, yet secure, information-sharing between workforce, education, and economic development organizations, we can better future-proof the workforce and foster more inclusive, growing economies.
Actions and models to consider: As you accelerate efforts to close workforce and skill gaps in our local economies, consider the emerging models that connect and build interoperability between our workforce, education, and economic development organizations.
Jurisdictions are creating chief workforce officer positions and umbrella agencies that unify postsecondary workforce readiness programs under one office. Examples of where Governors or Mayors are taking such actions can be found in Arkansas, Nevada, Florida, and Connecticut, and the cities of New York and Denver.
Several states are leading the way to develop unified web-based job portals and federated data management hubs. Once implemented, these hubs will provide learners and job seekers with a single entry point to access educational, training, and employment options tailored to their interests, talents, and accessibility needs. These solutions are accelerating adoption of modern, human-centered design approaches by agencies.
Start by mapping out the end-to-end learner-to-work journey as part of your requirements gathering process. Then bring these seamless experiences to life through use of unified 'one-stop-shop' workforce and job portals. Make the portal accessible to education institutions and workforce centers, and promote it with a statewide communications strategy to raise awareness about personalized career pathways.
Take Florida's Reimagining Education and Career Help (REACH) Act as one example. This legislation led to creation of an office to coordinate workforce development efforts statewide and improve interoperability through the creation of a one-stop shop customer portal that implements a no-wrong-door-entry strategy for job seekers.
While SLDS efforts to identify patterns over time–from preschool through college and career–are not new, what's changing is the availability of modern data lakes and data platforms that make integration of data across the hundreds of organizations across a state more feasible to implement quickly.
Invest in a truly unified statewide longitudinal data system (SLDS) that leverages cloud-based data lakes and data management practices with existing common education data standards (CEDS). These solutions can securely store and automate the data-sharing process between departments of education and the hundreds of organizations statewide who rely on having access to this information to inform learning and institutional development decisions. See North Carolina's Longitudinal Data System (NCLDS) and Washington's Education Research Data Center (ERDC), as examples.
As you move forward, use these opportunities to upskill your agency's workforce in modern design and cloud skills along the way.
3. Wage replacement program modernization: Evolving how government provides economic security and stability for workers and families
The COVID-19 pandemic exposed the crucial role of wage replacement programs in providing financial stability for individuals and families navigating temporary income loss and involuntary unemployment. The pandemic exposed the need to modernize the legacy technology that automates claim processing and enables residents to access benefits, from unemployment insurance, workers' compensation, and other forms of emergency assistance. While pandemic-related pressures have eased, the challenges agencies faced in responding to sudden surges in demand, vulnerabilities to fraudulent claims, and disparities in access to benefits persist moving into the new year.
In the US, a growing number of state agencies are also in the early phases of implementing Paid Family and Medical Leave (PFML) laws that require employers to provide eligible employees paid or unpaid time off from work for various reasons, such as parental or medical leave related to caring for a loved one, or a worker's own serious health condition. Of the 22 states that have enacted voluntary or mandatory paid family leave laws, at least 15 are starting to implement a mix of publicly or privately funded benefit programs, typically building off their existing Temporary Disability Insurance programs. As more and more states stand up these new programs, they’re finding opportunities to share lessons learned and build upon one another's success so that no one project is standalone.
Actions and models to consider:
As you modernize the technology underlying your wage replacement programs, design the journey and experience you want businesses and employees to have during times of vulnerability, and then build the technology to enable the experience and bring it to life. Augment the requirements of the legislative mandates driving the design of the program with the needs of the employers and workers you’re serving.
Take the Connecticut Paid Leave Customer Portal as an example. The agency applied a human-centered design approach that began with an understanding the state's user personas and creation of end-to-end service blueprint to identify pain points in the current process. Use these modernization initiatives as an opportunity to upskill employees on human-centered design and service design approaches.
4. The right strategy for the right community: Accelerating BEAD (Broadband, Equity, Access, and Deployment) to bridge the digital divide
Much progress has been made to close the gap between those with affordable internet access and those without. Still, one-third of the global population remains unconnected, including roughly 20 million Americans.
In an increasingly digital economy, the pandemic exposed the impact of the disparities in digital literacy and limited internet access on people's lives and their ability to access healthcare, employment, and government services. Take the families who drove their children to the public library or a teacher's house to pick up course materials during the pandemic because they lacked internet access. In the US, most of the recent federal funding for "Internet for All" initiatives focuses on underserved and unserved communities, often in rural areas; however, urban communities are also experiencing a digital divide where 5G is creating new disparities.
Historic investments made through the 2021 Infrastructure Investment and Jobs Act are still being allocated, meaning that funding is available in 2024-25 to close the digital divide through federal programs, such as the Broadband Equity, Access, and Deployment (BEAD), Middle Mile Broadband Infrastructure, and Digital Equity Act programs. As communities across the US continue to implement BEAD projects in 2024-25, they will need ways to monitor progress in expanding broadband access, addressing affordability issues, and promoting digital literacy. It will be critical to demonstrate success over the next year. Entities with a detailed view of their BEAD program and related indicators on milestones, community members connected, Internet Service Providers (ISPs) and partner commitments, and capital will most successfully receive the fully allocated amount from the National Telecommunications and Information Administration (NTIA).
What we've learned through our work with ISPs and telecommunications companies is that broadband strategy and deployment isn't just about network engineering; it's about taking the right strategies (e.g., fixed wireless, fiber, copper) to the right communities based on a strong economics-based risk plan and the highest degree of impact. Imagine if could understand community need at the household level, and use that data to inform which populations you needed to extend services to. Slalom partnered with Hexvarium to develop a Market Addressability Platform (MAP) that can be used alongside the Federal Communications Commission's nationwide mapping tool. The solution supports jurisdictions in integrating a breadth of community and network data to best identify areas in need and measure progress throughout implementation of their BEAD projects and financial plans.
Actions and models to consider: Communities and broadband service providers can use the FCC's nationwide mapping tool, Broadband Data Fabric, alongside a Market Addressability Platform (MAP) to identify the unserved and underserved areas within specific communities. MAP enables jurisdictions to analyze the six datasets below which are core to finding the right strategy for the right community. By using data-driven solutions like MAP, jurisdictions can more easily integrate and synthesize data over time and report back to NTIA on progress.
Augment your use of the nation's broadband data fabric with local market addressability data to map the right strategy for the right community and monitor progress.
5. Place matters: Regional focus on 'placemaking' and resilience to attract talent and industry
As economic development agencies cultivate thriving, resilient economies, they lead a regional economic development planning process every few years, resulting in a hyper-local Comprehensive Economic Development Strategy (CEDS). Historically, CEDS have focused on strategies that attract business investment and growth in targeted industry clusters. Economic development agencies are recognizing that creating quality places to live and work is closely linked to a region's economic success. We're seeing a re-emergence of ‘placemaking’ strategies as a way to build more resilient, inclusive local economies. While not new, placemaking strategies require economic development agencies (EDAs) to engage in different ways with their stakeholders.
Placemaking strategies stimulate local economies by using local assets and public input to create appealing and unique places where people want to be, thus attracting more businesses, talent, and tourists. Examples of placemaking strategies include mixed-use development, broadband-enabled public spaces, plentiful low-cost housing and public transit options, and safe, accessible, green, walkable spaces. Placemaking strategies create reinforcing feedback loops that build resiliency and further attract businesses and residents seeking a better quality of life. Agencies can jointly use a mix of short- and long-term strategies along with more traditional tax credits targeted toward specific industry clusters to drive job creation, a stronger tax base, and increased well-being of residents.
Actions and models to consider: One way economic development agencies (EDAs) can do this is by changing how they gather insights from businesses and residents. As you get input from the community on potential placemaking strategies, try using customer engagement methods that sports teams use to gather insights from their fan base. Both EDAs and sports teams need to engage multi-generational segments of the community where they reside. Both want to attract people and businesses to spend more time with them. Take the Chicago Cubs, as an example. The Cubs were able to more deeply understand and reach a broader segment of their fan base by combining human insights and machine learning analysis. EDAs can apply similar types of engagement strategies as they work to more deeply understand community needs, and use these insights to build places that attract the next generation of people and businesses into their region.
Slalom contributors: Joe Kuntner, Anthony Gould, Jennie Wong, Ginger Sampson
