The four system changes, in detail

Why this matters

By default, workforce systems set the agenda — designing programs and then asking employers to validate them. They ask employers to solve system problems: fill advisory roles, provide projections, share hiring data. But employers also want systems to solve employer workforce problems: expand capacity of specific programs, build new pathways, address licensing barriers, expedite security clearances. When systems gather input but lack the channels to act on what employers say they need, trust erodes. When systems invert the agenda — asking "what do you need us to solve?" instead of "please validate what we built" — engagement becomes genuinely employer-centered. Employers bring their priorities and proposed solutions; the system responds visibly. Trust is rebuilt, engagement quality improves, and programs better align with what employers actually need.

The change

Build a formal channel for employers and/or employer-led sector intermediaries to bring priorities, problems, and proposed solutions to the system — not just respond to system-defined questions — and set the system up to respond and act on what comes through it. Sector intermediaries are the channel where they exist. For sectors without an intermediary — or for employers whose priorities don’t map to one — a designated office or a statewide employer body plays the same role, so access to the channel doesn’t depend on whether a sector has organized yet. Closing the loop — telling employers what was acted on, what was deferred, and why — is the obligation that rebuilds trust.

When to pursue this

• —When employers face systemic, varying workforce challenges (licensing, credentialing, regulatory, sector-specific) that fall outside standard input-gathering processes.
• —When state leadership has the political will to act on employer requests.
• —When the state has the capacity to define a clear channel employers can actually use.

Key functions of employer-led agenda-setting

• —Clear intake channel for employer-initiated input — the state establishes a single, clear channel through which employers, employer coalitions, and/or sector intermediaries can bring priorities, proposed solutions, and systemic barriers directly to the system. Employers know where their asks go; the state knows where those requests arrive. The channel can take several forms: employer-led sector intermediaries as the channel, where the state engages employers through their sector intermediary; an employer-led council with statutory weight, a governor-appointed, all-industry body that sets state direction; or a single front door / consolidated business engagement function — one administrative office serves as the entry point across systems.
• —Scope of input — barriers and solutions, not just program critiques — employers bring occupational needs, sector-specific skill gaps, and systemic barriers (licensing, credential recognition, policy) — not just feedback on existing programs. The channel invites the broader question: "what's preventing you from getting the talent you need?" — and considers the full range of solutions, not just training pathways.
• —State response process and timeline — the state designates a clear process and timeline for receiving employer priorities, commits to real dialogue, and answers each priority it receives.
• —Visible follow-through that rebuilds trust — where the system can act, it does. Where it can't, it explains why and identifies what it can do instead. Transparent follow-through, even when the answer is no, builds more credibility than silence.
• —Coordination of the state’s asks of employers — wherever possible, requests for employer input route through the same front door, so agencies align what they ask and the same company is not approached by multiple offices for similar information.

Why this matters

Many states already publish in-demand occupation lists, and federal programs like Workforce Pell and WIOA's Eligible Training Provider Lists tie funding to alignment with them. But publishing a list isn't the same as using it as a lever. Today, programs still often re-prove demand program by program, aligned programs don't receive differential rewards, and employer-built pathways struggle to find a foothold in a system designed around individual institutional applications. When the state uses its incentive levers — funding formulas, program approval, and grantmaking — to actively reward alignment with the demand picture, programs that connect to real employer demand get expanded, employer-built programs have a path in, and institutions have an ongoing reason to keep alignment current rather than treat it as a one-time hurdle.

The same levers apply after a program launches. The demand picture refreshes on a regular cycle, and renewal is where alignment stays current – a program keeps its streamlined approval and bonus funding by staying aligned with the sector’s picture as the picture refreshes. The outcomes side of renewal – what gets measured, published, and weighed when a program comes up for review – is the fourth change.

The change

Use the state's funding, approval, and grantmaking levers to incentivize alignment with the employer-defined demand picture. Programs that align with the picture receive enhanced funding, streamlined approval, and priority in state grantmaking. Programs built and validated by employers have a resourced pathway into the formal system rather than working outside it. And the state identifies and removes the structural barriers — extra credentialing layers, and the absence of a formal route for employer-built programs to enter the state system (approval, articulation, credit, financial aid) — that keep employer-validated programs from entering in the first place.

The incentives run at both ends: streamlined approval and enhanced funding on the way in, and renewal on the way out that rewards programs for staying aligned as the sector’s picture refreshes.

When to pursue this

• —When a credible employer-defined demand picture exists or can be developed.
• —When program approval, funding formulas, and evaluation and accountability frameworks sit at the state level.

Key functions of the incentive design

• —The state ties funding formulas to alignment with the demand picture — bonus enrollment funding for programs that teach to the picture, with the bonus paying for the staff time that keeps the program connected to the sector.
• —States, agencies, and institutions streamline approval for aligned programs — a program demonstrates employer demand by pointing to the sector demand picture, in place of gathering individual employer letters of support program by program.
• —The state designs grantmaking to fund cross-system pathways around the demand picture — grants require partnership across CTE, community colleges, apprenticeship, and workforce boards to build the integrated pathways the sector demand picture calls for.
• —The state runs a resourced pathway for employer-built programs — when a sector has built and validated a turnkey program, the state has a defined process to map it into the formal system (credential recognition, funding integration, articulation), with the state-side staffing capacity to do that work.

Why this matters

Workforce systems today are largely evaluated on participation and outputs — committees seated, students enrolled, completions — which tell us little about whether graduates reached family-sustaining careers or whether employers hired them. Publishing real outcomes changes what every actor in the system can see and act on: students and families can compare programs before enrolling, institutions can see where their programs stand, and the state can direct renewal and investment toward what works.

The change

Shift what the system measures and publishes from participation to outcomes: placement, wages, retention, longer-term career progression, and credential value. Build the data infrastructure that makes those outcomes measurable and comparable across programs, publish them at the program level in one public place, and use them to inform renewal, adjustment, and investment decisions. Where the recommendation to incentivize program approval, funding, and renewal works at the front end, this change applies the same logic after programs launch.

When to pursue this

• —When the state has responsibility for program evaluation and accountability frameworks.
• —When it has — or can build — the data infrastructure needed to track outcomes reliably across systems.
• —When federal or state policy is trending toward outcomes-based accountability, creating opportunities to align.

Key functions of outcomes-based evaluation and renewal

• —The state establishes a common set of program outcome metrics — used across CTE, apprenticeship, community colleges, and workforce programs: placement in the field of training, wages, retention, credential value, and skill alignment for employers; further education, self-employment success, and credential portability for students.
• —The state builds the longitudinal data infrastructure that connects program records to employment and wage records — so graduates can be tracked beyond the first job, and career-track employment in the field can be distinguished from any employment at all.
• —The state’s renewal and investment decisions are informed by published outcomes — programs whose graduates find work in the field can expand, while programs that consistently fail to place graduates are restructured or sunset over time.
• —Program-level outcomes are published in one public place — students, families, and employers can compare programs on placement, wages, retention, and credential value before making enrollment or hiring decisions.
• —Sector intermediaries feed qualitative signals into the evaluation — employer satisfaction with graduate skills, alignment with sector-signaled unmet needs, and the depth of employer engagement in program design sit alongside the quantitative metrics.