Design funding systems that continuously improve toward the state’s workforce goals. Outcomes-based contracts help focus education and training program providers on delivering results. In contrast, traditional cost-reimbursement contracts often pay service providers regardless of whether they actually help people get jobs, gain skills, or earn higher wages. As rapid changes take place in the workforce over the next decade, states can consider dynamic funding strategies that scales up success by default, such as through outcomes-based payments, can help maximize the impact of state dollars.

State Program Examples

  • Rhode Island

    ResultsFirst Initiative to Promote Outcomes-based Funding

    Rhode Island partnered with the Pew-MacArthur ResultsFirst Initiative  to develop more in- depth reports that connect budget, staffing, and performance data for data-driven decision making. The ResultsFirst Initiative utilizes an econometric model to analyze costs and benefits of investments in public programs. The model relies on the best available research on program effectiveness to predict the public safety and fiscal outcomes of each program in Rhode Island, based on the state's population characteristics and the cost to provide these programs.

  • Virginia

    Pay for Performance (PfP) for Improving Outcomes for Youth and Young Adults

    In 2018, the Northern Virginia Workforce Development Board’s SkillSource Group launched a contract to provide bonus payments, through WIOA PfP, to providers that achieve predefined milestones for programs serving those in foster care and justice-involved young adults.

  • Nevada

    Work-based Learning Pay-for-Performance

    In 2018, the Nevada Governor’s Office of Workforce Innovation released a Work-Based Learning Pay-For-Performance (PfP) Grant Request for Proposal that combined evidence-based strategy requirements with PfP.

  • Tennessee

    Ties Postsecondary Performance Funding to Outcomes

    Many states have implemented postsecondary performance funding to evaluate student success, efficiency, and affordability in determining continuation of funding for higher education programs. Some states have experimented with comprehensive systems, in which all sectors of public higher education are measured, while others have applied these metrics to certain industries. In Tennessee, an outcomes-based financing model increased Tennessee’s attainment rate by 8.9 percent between 2013 and 2017 and exceeded the national average of 7.6 percent. A performance-based funding model could be a useful strategy for states who are currently seeing low-performance in their education and skills training programs and may wish to prioritize performance in specific industries which are at greatest risk of automation. 

Integrate advanced technologies into K-12 and higher education teaching and learning. To close the technological and digital literacy gap, governors can facilitate the introduction, and guide the use, of innovative technologies such as robotics and Artificial Intelligence (AI) in the classroom. Governors have a unique platform to ensure that core curriculum offers – and in some cases, mandates – technological skills so that digital literacies are prerequisites for all learners. As states and local education authorities consider how to incorporate these competencies in their curricula, leaders should also prioritize increasing teaching capacity, and evaluating whether requirements have the potential to further burden some students, including those with disabilities. When done correctly, pursuing an access agenda to K-16 computer science offers policymakers a rare opportunity to address workforce, education and equity issues across party lines. 

State Program Examples

  • Oregon

    AI Task Force and Annual Report

    Oregon’s Workforce and Talent Development Board (WTDB) is the Governor’s core leadership and advisory board for the interconnection and alignment of education, training, and talent development in Oregon. The WTDB Artificial Intelligence (AI) Task Force was officially established in 2019 by the Chair of the Oregon Workforce and Talent Development Board. One of the key goals from its inception was to produce a report for the Governor’s Office and Legislature on the impacts of AI, including recommendations on how to increase Oregon’s AI talent pool. The 2020 annual report takes a cursory dive into AI’s Sector-Based Impact within the context of COVID-19, climate change and ethical considerations, and offers policy recommendations on education and training to build the AI talent pool and develop AI users, as well as on societal and ethical considerations, equity, state government use of AI and more.

  • Tennessee

    STEM School Chattanooga & Fab Lab

    Tennessee’s Hamilton County School District announced in 2019 that Hamilton County Schools served as the global leader in the fab labs, with 17 fab labs throughout the district. STEM School Chattanooga pioneered the first district Fab Lab in Tennessee in 2014, which was recognized by the Fab Foundation as a national model for integrating advanced technology into the K-12 classroom. With support from the Volkswagen Group of America, the State of Tennessee, the Fab Foundation and the Public Education Foundation, Hamilton County, expanded this model to 16 additional schools. Graduating students earn digital badges to represent mastery of specific, industry-recognized, digital fabrication skills and competencies. 

  • Tennessee

    Volkswagen eLabs

    In 2017, Volkswagen and the State of Tennessee announced the establishment of Volkswagen eLabs, a $1 million program available to middle and high schools to establish digital fabrication labs for their students. Each eLab grant supports grant administration, purchasing and equipment consultation, facility retrofitting, as well as more than 120 hours of professional development for teachers working to support the implementation of education programs. Each eLab also makes available training for the broader community in support of regional workforce development goals. The state is not responsible for maintenance costs and instead and school must raise a minimum of $5,000 annually in cash or contributed materials to ensure sustainability of each lab.

  • California

    Community College Maker Initiative

    In 2016, the California Council on Science and Technology issued a white paper promoting engagement of the California Community College System (CCC) with the maker space movement to prepare innovation-ready graduates. In response, the Chancellor's Office launched the Maker Initiative, a three-year grant program designed to increase interest in STEAM education and scale a pilot with Hacker Lab, a Sacramento coworking maker space, to the state’s network of 114 community colleges. CCC member institution Sierra College was awarded $17 million from the Chancellor and the California Workforce and Economic Division to launch the initiative which embedded making into college curriculum, funded work-based learning opportunities for students, and offered seed funding for the development of new maker spaces.

Prioritize equitable skill development by directing investments toward communities of color and traditionally under-resourced schools. Gaps that already exist in digital literacy for communities of color will be exacerbated as technology becomes even more common place. For example, a 2020 brief by the National Skills Coalition found that one-third of Americans lack digital skills, including half of Black Americans. To avoid locking out millions of Americans from economic opportunity, states must consider how to target teaching and learning resources to students who are at greatest risk of low performance outcomes. These targeted resources can improve skill development, and ultimately increase participation and persistence in education and the workplace.

State Program Examples

  • Washington

    STEM Education and Innovation Alliance

    In an effort to prioritize equity and diversity in technological skill development, Governor Inslee has led the Washington STEM Education and Innovation Alliance since 2012. The Alliance aims to develop policies and strategies for meeting the state’s STEM needs from early learning to higher education, including the removal of educational opportunity gaps in STEM fields.

Create incentives for employers to invest in training their current workers with skills needed for the future. Many states provide tax incentives for employers who employ apprentices to promote private-sector investment in training. These incentives often alleviate some need for public training programs and allow more workers to access training that is directly tied to a specific career path. Governors and states could consider building on the success of these tax credit programs to expand incentives to specific, high-tech, high-demand industries.

State Program Examples

  • Indiana

    Next Level Jobs *NEW*

    Indiana's Next Level Jobs program consists of the Workforce Ready Training Grant, which award students and employers funding to participate in or provide free short-term training in high-paying, in-demand industries. The Rapid Recovery for a Better Future initiative temporarily expands Next Level Jobs using $75 million of federal CARES Act funds. The expansion enables the Workforce Ready Grant to increase financial support for students up to $10,000, expand program eligibility and allow two- and four-year degree holders to participate. The expansion enables the Employer Training Grant to increase the amount eligible for reimbursement up to $100,000 per employer and dedicates at least $5 million to minority-, veteran-, and women-owned businesses.

  • California

    Employment Training Panel *NEW*

    Since 1982, the Employment Training Panel has reimbursed employers for incumbent worker training. A recent evaluation found the program had significant positive impacts on employee wages, labor productivity, and the number of employees, especially for small- and medium-sized businesses. States could use programs such as this to help stimulate the recovery of small- and medium-sized firms and improve access to economic opportunities for workers.

  • Mississippi

    Employee Training Tax Credit 

    In order to incentivize advanced training for incumbent, low- and middle-skill workers, Mississippi employers receive a 50 percent tax credit for the costs of training an employee, up to $2,500 per employee per year.

  • Indiana

    Next Level Jobs Workforce Ready Grants

    Indiana's Workforce Ready Grants are facilitated through NextLevelJobs. These grants cover tuition and mandatory fees for eligible high-value certificate programs at Ivy Tech Community College, Vincennes University, or other approved providers. The grant is available for two years and covers up to the number of credits required by the qualifying program. The qualifying high-value certificate programs were selected based on employer demand, wages, job placements and program completion rate. These programs are aligned with Indiana’s highest demand sectors:   Advanced Manufacturing Building & Construction Health Sciences IT & Business Services Transportation & Logistics   Another aspect of Next Level Jobs is Employer Training Grants. Under these grants, employers may qualify for reimbursement of up to $5,000 per employee trained and retained for six months. Each employer may qualify for up to $50,000 per employer. Employers must submit an application, satisfy eligibility requirements and receive and sign a formal agreement obligating grant funding. Employers must offer occupational skills training directly correlated with in-demand jobs in our six high-growth job fields (Advanced Manufacturing, Agriculture, IT & Business Services, Building & Construction, Health & Life Sciences, and Transportation & Logistics). The training must be greater than 40 hours and ideally result in a stackable certificate or credential upon completion (onboarding training and informal job shadowing does not qualify). Additionally, the employer must ensure a wage gain at the completion of training for current employees trained to new skill sets; there is no current wage requirement for new hires trained. Employer Training Grants receive $20 million in funding through the state’s budget.   As Indiana endeavors to increase the number of Hoosiers with the skills to move into middle-skill jobs, state programming will be complimented with SNAP 50/50 funds. The state will allocate $500,000 of Employer Training Grant state funding for upskilling SNAP or TANF recipients, augmenting that funding with tuition reimbursements of $250,000 through SNAP 50/50 for supportive services and additional training for SNAP recipients. A dedicated $750,000 in blended state and federal funding apportioned toward increasing access to advanced opportunities for low-income workers will help benefit the state and employers. So far, nearly 11,000 Hoosiers have earned a certificate and more than 900 employers have benefited from Next Level Jobs.

  • Montana

    Apprenticeship Tax Credit

    Montana employers may apply for a tax credit for every new position hired where the worker is registered as an apprentice through the Montana Registered Apprenticeship Program. The number of qualifying new hires is unlimited and is available to employers who file Montana income tax. Employers are encouraged to hire job seekers from a variety of underemployed populations, including SNAP participants, veterans, former felons, WIOA participants, or Temporary Assistance to Needy Families (TANF).

  • Connecticut

    On-the-job Training Credit

    Connecticut employers may be credited 5% of their investment in on-the-job training thanks to a 2019 worker training tax credit.

  • Illinois

    Apprenticeship Tax Credit

    In 2020 Illinois began a new apprenticeship tax credit that covers up to $3,500 of qualified education expenses incurred by employers on behalf of a qualifying apprentice. To increase equity, an additional $1,500 credit may be awarded if the company’s principal place of business is in an underserved area or the qualifying apprentice resides in an underserved area.

  • Ohio

    TechCred

    In September of 2019, the Ohio Governor’s Office of Workforce Transformation launched TechCred to give businesses the chance to upskill current and future employees in today’s technology-infused economy. The program reimburses employers up to $2,000 when an employee earns a short-term, industry-recognized, and technology-focused credential. After three application periods, 500 unique Ohio employers have been approved for reimbursement, which will result in the earning of up to 4,232 technology-focused credentials by Ohio employees.

Create opportunities for and provide incentives for state employees to learn technological and digital skills.  Key to delivering government services effectively is building technical leadership and capacity within for state government to apply emerging technologies. States have a unique opportunity to build a more effective workforce by partnering with private industry to make available to all state workers no-cost, advanced training necessary in emerging technologies, data, and human-centered design. Read the Tech Talent for the 21st Century Workforce to learn more about integrating tech talent in the public workforce.

State Program Examples

  • New Jersey

    Innovation Skills Accelerator (InSA)

    Policymakers have a responsibility to ensure that workers across all sectors and at every level of the wage ladder have access to the skills and retraining they need to succeed. Governor Murphy expressed support for learning innovation in the public sector with a recently announced initiative to teach public servants how to use new technologies and innovation strategies to make government processes more efficient and to make more informed policy decisions that benefit New Jerseyans. A public-private partnership has resulted in this online digital micro-credentialing lab for public sector employees to learn about blockchain, human-centered design, data analytics and more.  States can ensure that their own public workforces have the digital skills that they need to effectively serve the public by providing accessible training and valuable credential.

Invest in the uniquely human skillsets, including problem-solving skills, creativity, and socio-emotional awareness, of the state workforce. The state invests in the human capital of each state worker, including the skills necessary uniquely in the state workforce, in order to help them remain competitive in the workforce.

State Program Examples

  • Missouri

    Engage 2.0

    Missouri launched Engage2.0 to invest in the human capital of each state worker, including the skills necessary uniquely in the state workforce. This program provides a common growth model for the professional development of all state employees, training materials, and opportunities for staff to give ‘upward feedback’ to supervisors. The state also operates The Leadership Academy, a six-month intensive training program for ‘emerging leaders’ in state government, and a shorter three-day leadership program called The Missouri Way.

  • Washington

    Leadership Development Training for State Workforce

    In an effort to advance WA State Government as an employer of choice, Washington Governor Jay Inslee called for a transformation of leadership skills in state government. The Washington Department of Enterprise Services’ Workplace Learning and Performance team responded by designing new leadership development training for state employees. Supervisors and managers who completed the training reported nearly 30% improvement in areas like building trust with staff and driving results in their jobs.

Create and encourage the use of individual training accounts.The state helps individuals finance lifelong learning by creating training co-investment strategies between employer and employee. This model ensures that funding stays with the individual, regardless employer or employment status.

State Program Examples

  • Washington

    Lifelong Learning Accounts (LiLAs)

    In 2012, former Governor Gregoire signed into law Senate Bill 6141, establishing Washington as the first state to legislate Lifelong Learning Accounts (LiLAs). LiLAs are a voluntary employer benefit which offer a co-investment vehicle for both employers and workers to fund employee professional development. Unlike employee-run tuition reimbursement programs which are usually dedicated to improving current job-related skills, LiLAs can cover a broader range of career and technical training, including career counseling. In Washington, the State Workforce Board collaborated with over 30 organizations from business, labor, higher education, and community-based organizations to develop the concept and advocate for its support in the Legislature. These leaders chose to design the model with lower-wage workers in mind, since employer-sponsored professional development programs are less often oriented toward low-skill workers. Although the program initially approached large employers to include LiLAs as part of their existing benefits package, the program received most interest from small employers who sought to offer LiLAs as a mechanism for reducing turnover in their workforce. In order to increase the potential for external funding, the program was designed to meet the requirements of the Community Reinvestment Act, which requires private financial institutions to contribute a share of their profits into the community.

Create a Training Trust Bond. States need bold financing proposals to effectively upskill the current workforce and train their future workers. New spending can be challenging in any political environment, and many states are seeking solutions to leverage federal dollars through programs that reduce the price tag while still increasing overall workforce investment. Employer-sponsored training cannot entirely supplant direct funding in workforce training, and legislators will need to prioritize revenues in the coming decade. States may also be interested to explore alternative financing approaches, including bonds, to help scale successful initiatives in their states. Modeled after infrastructure tax bonds, a Training Trust Bond (TTB) could be used to pay for training up-front, funded by future resulting tax revenue increases. Large infrastructure projects sometimes borrow against future tax revenues from higher property taxes and commercial activity. Training is analogous in that an up-front investment may yield increased public resources via higher income tax intake, lower crime rates, and lower costs for public services. Therefore, state governments could create TTBs to fund up-front training costs and then recoup costs through lower public costs and higher public revenues.

State Program Examples

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Create a 529c Continuous Learning Household Account that combines public, employer and individual funding for continuous, lifelong learning. States looking to offer learners a wider variety of education finance tools may consider adapting existing 529 education accounts to deliver “529(c) continuous learning household accounts”. These accounts could allow individuals, employers, and public programs to jointly invest in providing flexible money for members of a household to pursue training. Potential sources of funds include: public funds (e.g. WIOA, SNAP employment and training support, TANF supports, Unemployment Insurance); employer funds (e.g. WIOA credits, education benefits such as 529 contributions and employer-paid tuition assistance); and individual funds (e.g. zero- or low-interest rate loans, ability-to-benefit funds). Like traditional 529 accounts or Lifelong Learning Accounts (LiLAs), these would not be designed to serve as long-term savings vehicles but rather, designed for limited returns to encourage workers to regularly use their funds continuously throughout their careers. Relevant issues for policymakers to consider with this option include guarding against fraud and ensuring targeted marketing of these programs are toward lower-wage workers.

State Program Examples

No examples to share at this time. Please check back later.

Evaluate alternative approaches to financing lifelong learning that reduce cost to the individual. As technologies evolve and employers’ skills needs shift, workers will need help to close the affordability gap of additional training. In recent years, many states have introduced new financial aid programs including last-dollar scholarships for eligible students. Although the effects of these programs are not universal, states should gather data on the potential impacts of new financial aid programs to reduce costs for learners, and then use this information to inform new program design to better meet learners’ needs.

State Program Examples

  • Ohio

    Choose Ohio First Scholarship

    In 2008, the Choose Ohio First scholarship was created to significantly strengthen Ohio’s competitiveness within STEMM disciplines and STEMM education. Choose Ohio First funds bachelor’s degrees that will have the most impact on Ohio’s position in world markets such as aerospace, medicine, computer technology and alternative energy. Choose Ohio First programs are integrated with regional economies through partnerships with industry leaders and meet statewide educational needs. In December 2019, the State of Ohio announced a new Choose Ohio First scholarship that will boost Ohio’s efforts to strengthen the state’s workforce in Computer Science fields such as programming and cybersecurity. This scholarship will support an estimated 1,400 Ohio students from 35 colleges and universities across the state with a total of $20,580,770 in awards over the next five years.

  • Maine

    Competitive Skills Scholarship Program

    The Competitive Skills Scholarship Program (CSSP) was established in 2007 to grow the productivity and competitiveness of Maine’s workforce in order to support employers’ success in a robust and changing economy through enabling low-income individuals to obtain relevant training credentials. Funded through assessments on employers that contribute to the unemployment trust fund, the CSSP allows eligible students to cover the cost of postsecondary education and training for industry-recognized credentials in high-demand industries as well as other supports like child care, transportation, books and supplies.  Since its inception, CSSP has helped 3,107 low-income (<200% FPL) Mainers attain skills. CSSP paths provide opportunities for individual career choices, employer-driven training, and early college options for high school students. Eligible training is industry recognized and provides opportunity for employment in specific high-wage, in-demand jobs as identified by Maine Department of Labor’s Center for Workforce Research and Information (CWRI).

  • Virginia

    New Economy Workforce Program

    The Virginia General Assembly passed HB 66 which established the New Economy Workforce Grant Program. This grant program is the first of its kind and provides a pay-for-performance model for funding noncredit workforce training that leads to a credential in a high demand field.

  • Tennessee

    Tennessee Promise Scholarship

    The Tennessee Legislature passed the Tennessee Promise Scholarship Act in 2014. This legislation was in line with former Governor Bill Haslam’s goal of “making Tennessee the number one location in the southeast for high-quality jobs” by increasing postsecondary attainment in Tennessee to 55% by 2025.  The Tennessee Promise offers a scholarship for students to attend South College in an approved program of study, tuition free for two years.  The scholarship is to pay tuition and fees at not covered by other aid. This is a last-dollar scholarship, meaning that it covers the cost of tuition not covered by federal grants and other financial aid for eligible students.

Remove obstacles to participating in work and learning by closing gaps in access to medical and mental health care, including for those recovering from substance use disorders. The state builds an ecosystem where every individual, including those with disabilities and a history of substance abuse, are able to realize financial self-sufficiency, and to recapture the dignity of being a working member of society.

State Program Examples

  • New Hampshire

    Recovery Friendly Workplace Initiative 

    New Hampshire found that 66 percent of the costs of untreated addiction in the Granite State were due to lost productivity and absenteeism at work. In response, Governor Sununu led the “Recovery Friendly Workplace Initiative” to incentivize employers to provide support to New Hampshire residents in recovery. The state secured a U.S. Department of Labor grant aimed at helping those in recovery reenter the workplace, and as a match, allocated $1 million to educate employers in evidence-based practices that demonstrably reduce substance misuse in the workplace, offer specialized training for human resources personnel, and promote the hiring of those undergoing treatment. The State Workforce Innovation Board also granted funds to the initiative and served as navigators for local employers to serve workers in recovery. Other states have developed similar programs and applied their Vocational Rehabilitation funds to serve those in recovery and reentering the workforce.

  • Montana

    Medicaid Expansion

    In 2019, Montana Governor Bullock signed into law HB 0658, thereby expanding the state’s Medicaid program to serve nearly 100,000 low income adults. The expansion will cost the state approximately $16 million over the next two years, which will be paid for by a new tax on Montana hospitals.

Promote learning and work opportunities for all workers by investing in broadband and entrepreneurship hubs. The state invests in a comprehensive approach to fostering innovation, developing human capital, using local institutions and infrastructure and accessing investment capital to help the entrepreneurial economy thrive in all communities, including rural towns.

State Program Examples

  • Pennsylvania

    One-Stop Shop for Entrepreneurs

    In 2018, Pennsylvania Governor Tom Wolf launched the PA Business One-Stop Shop as the sole source for guiding entrepreneurs and small businesses through all stages of development. This One-Stop consolidated several difficult-to-navigate programs serving businesses, from planning and startup to operation and expansion. The program was developed through a partnership between the departments of State, Labor and Industry, Revenue, the Office of Administration, and the Department of Community and Economic Development.

  • West Virginia

    Governor’s School of Entrepreneurship

    In 2015, West Virginia Governor Earl Ray Tomblin created the Governor’s School of Entrepreneurship (WVGSE), one of several summer programs designed to promote study of the arts, science, academics and business. WVGSE, a free summer program established through the West Virginia Department of Education and West Virginia University, is a three-week boot camp for 50 high school students that offers students the opportunity to develop entrepreneurial skills. Young innovators are thrown into an “accelerator” atmosphere where they learn about business models, design thinking, startup ventures and then given the chance to pitch their ideas and actually launch a business venture.

  • Minnesota

    Creation of Entrepreneurial Hubs

    In the town of Red Wing, leaders partnered with the Center on Rural Innovation to raise local funds to match an U.S. Economic Development Agency (EDA) i6 Challenge Grant to fund a $1.7 million regional effort to support entrepreneurs and talent development across an 11-county region in rural Southeast Minnesota. This project expects to advance 30 emerging entrepreneurs, meet the talent needs of 15 employers, and prepare 75 students for the future workforce.

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