What states, sector intermediaries, and funders can each do to build industry-led talent systems — and six tools to start with.
The vision describes two moves – employer-led organizations with the capacity to speak with one voice, and a system adapted to listen and act. What that looks like in practice will differ from state to state: each state has its own agencies, institutions, funding streams, and existing employer organizations to build from. The example below shows one way the pieces can fit together – a recognized sector intermediary at the center, one demand picture per sector, and every part of the ecosystem working from the same signal.
Share the knowledge only employers hold – the occupations they are hiring for, the skills and credentials that matter, where the pipeline is stuck – once, through their intermediary, rather than at every table separately.
What could enable this →Recognizes one employer-led intermediary per priority sector, funds the capacity the role requires, and supplies the employment and education data every demand picture builds on.
What could enable this →Build programs against the sector’s actual hiring – pointing to the picture to demonstrate demand for new programs, teaching the skills employers rate most important, and localizing it through their advisory committees.
What could enable this →Receive the sector’s priorities through one coordinated channel, enable the alignment of program approval, funding, and renewal with the programs the sector endorses, and fund the strategies its employers prioritized.
What could enable this →Participate in the work the sector prioritized – training people on the job with the sector’s shared training plans, hosting internships and work-based learning, and co-investing alongside public dollars in the sector’s pipelines.
What could enable this →Engage with the sector intermediary to get matched to programs seeking hiring partners, and hire from the programs the sector endorses, with job postings written in the picture’s skill and credential terms.
What could enable this →Placement, wages, retention, and credential value, published in one public place – so students and families can compare programs before enrolling, employers can see which programs to hire from, and the state can weigh the results when a program comes up for renewal.
What could enable this →Building the kind of system described above takes six roles – and none of them requires creating a new entity: each can be held by an organization that exists today.
The workforce innovator convenes the effort and aligns all parties around a shared vision for an industry-led talent system in their state. There is more than one way to play this role – the innovator might be a business-led civic coalition, an education nonprofit with deep employer ties, or a statewide roundtable – what matters is that all parties trust the organization and it has no stake in any one system. It can play several critical roles.
In Washington, Partnership for Learning is one example of an organization playing this role: documenting every place the state’s public systems ask something of employers (more than 75 distinct asks, from advisory committees to surveys to sign-offs), interviewing leaders across education and workforce, and convening a working group to shape a vision for how employers can play a more meaningful role in Washington’s workforce development ecosystem.
The industry associations, employer coalitions, and chambers of commerce that step into the role take on several responsibilities while the system is being built.
The governor’s office is uniquely positioned to convene every agency whose processes have to change – K-12, higher education, workforce, apprenticeship, economic development. Sample roles the office could consider playing:
Philanthropy can provide the early money and the patient capital, and it can play several important roles while the system is being built.
Once the vision is in place, the work needs a clear leader responsible for implementation. That leader could be the workforce innovator, a team within the governor’s office, or an outside entity brought in for the purpose. Whoever leads it takes on several roles while the system is being built.
The work needs an independent assessment of whether it produced different outcomes for students and employers, and the evaluation partner plays several roles.
An industry-led talent system is not a silver bullet, and building one runs into real obstacles. The objections below are the ones we take most seriously – each is reasonable, and each has an approach that reduces the risk.
“Choosing the sector intermediary will be politically hard.”
It will be. In most sectors more than one organization can claim the role, and naming one means not naming others. That is why selection needs a formal process with published criteria, run with transparency and ideally with employers themselves involved in the selection – and why a state can start in the two or three sectors where employers already agree on who speaks for them. How states can select sector intermediaries works through the scenarios, including what to do when a sector has too many candidates – or none.
“Employers are tired of being asked to join tables. This will feel like one more.”
If this becomes another standing meeting, it fails. This approach is built to reduce what the system asks of employers: the state audits its existing employer touchpoints and consolidates the duplicates, requests route through the sector intermediary so an employer shares what it knows once, and the sector’s input connects directly to approval and funding decisions – so time spent visibly changes what gets built. The enabling levers in the visual above name the specific mechanics.
“Business should not steer public education.”
This is a common and reasonable reaction. In this model, public bodies keep every final decision. Employers hold a defined recommendation-making role – publishing what their sector needs and endorsing the programs that teach it – while approval, funding, and accountability stay with the state and its institutions. The role itself comes with rules: an intermediary must show it represents its whole sector, and safeguards ensure the role serves the public good – its recommendations are weighed against what they deliver for students: well-paying work, accessible to every community the system serves. The aim is programs whose graduates get hired – and employers know what they will hire for.
“This is built around employers. Where are workers and students in it?”
The system’s measure of success is what happens to the people who move through it: whether graduates find work in the field, what they earn, and whether they stay. Those are the outcomes the state publishes and the outcomes programs are renewed on. Employer input serves that goal – a demand picture steers a learner’s time and tuition toward the skills employers will pay for – and it changes none of the decisions workers and their advocates already hold: public bodies keep approval, funding, and accountability, and worker organizations keep every seat they have today.
“In a local-control state, this will never reach the classroom.”
Institutions and faculty decide what gets taught, and this approach does not take that decision from them. Its levers are voluntary – streamlined approval, bonus funding, endorsement, equipment grants – things an institution opts into because they make its programs easier to approve and better funded. Adoption spreads program by program, which takes longer than a mandate would. Ohio shows the pattern: no law requires institutions to use the manufacturers’ competency model – they use it because it gives them the clearest available picture of the skills manufacturers hire for.
“This is untested, and there are not enough proof points to justify investing.”
In the United States that is partly true. Ohio, Indiana, and Washington have each built a piece of this system; no state has assembled the whole. Elsewhere it is standard practice – Switzerland, Singapore, and Germany each give employer associations a formal, funded role in shaping training, sector by sector. The thin American evidence is an argument for building proof points deliberately: start in two or three sectors, name the success measures up front, and publish what happens – the evaluation partner’s role described above.
“This costs money the system does not have.”
The new costs are modest – staff for an intermediary in each priority sector and a small state data team, much of it braided from funding streams that already exist. The cost of the current system is larger: public dollars flow every year to programs whose graduates struggle to find work in their field, and employers pay to recruit and retrain for positions that stay open. Pointing existing spending at the programs employers will hire from is where the savings are.
“AI is about to upend every occupation. Why build this now?”
Because AI will change each sector differently. The skills it displaces, the skills it makes more valuable, and the speed of the change will all differ across manufacturing, health care, and banking – and someone has to identify those changes and bring them into programs while they still matter. A sector intermediary refreshing its demand picture on a regular cycle is that mechanism. Without one, faculty updating a program have no clear, trusted source for how the work is changing – and employers, speaking through their sector intermediary, can provide exactly that.
The six tools below are practical resources for states and leaders considering what an industry-led talent system might look like in their own context – from selecting and strengthening sector intermediaries, to seeing what a demand picture contains, to learning from the places already doing pieces of this work.