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Over the last 18 months, the future of the public workforce system has been particularly vulnerable. WIOA reauthorization was on the table in late 2024 (then off the table) and funding was disrupted during government shutdowns — all while priorities kept shifting. State workforce agencies were being asked to deliver more with the same staffing constraints and the same legacy technology.
That uncertainty hasn’t fully disappeared in 2026. But the direction of the next few years is clearer. The federal government is sending stronger signals that states will be expected to run workforce systems differently than they have over the last decade.
There will be stronger expectations around outcomes, cross-agency coordination, and leveraging technology to reach more people at scale.
These themes are peppered throughout new policies and guidance such as TEGLs, OBBBA policy shifts, and new grant opportunities ranging from pay-for-performance apprenticeships to talent marketplaces.
For state agencies, we get why this feels daunting. These policy shifts result in operational lifts. It changes what teams measure, how partners coordinate, and what technology has to do day to day.
It is also a significant opportunity for state workforce agencies to improve serving both job seekers and employers. If states lean in, workforce agencies can become even more central to how residents access opportunity, how employers find talent, and how states build long-term competitiveness.
When we zoom out, we see a consistent message across these signals. States are going to be expected to operate workforce systems as modern infrastructure, not as a set of siloed programs. That gap between expectations and current systems is not going to close on its own.
What’s encouraging is that the technology landscape has changed significantly over even just the last 5 years. As state workforce leaders, you don’t have to go at this alone:
Below are a few policy developments that have stood out over the last several months in discussions with state workforce leaders. We won’t rehash every requirement (many of which are still in flux). Instead, we want to focus on what these signals mean for technology and why innovations in data systems and AI make a different approach possible now.
Workforce Pell: Workforce Pell is one of the most discussed policy shifts on the horizon. It expands Pell eligibility to certain short-term, workforce-aligned credential programs, with a July 2026 effective date driving near-term planning. In practice, it is going to be complex. States and institutions are going to be navigating eligibility rules, reporting, outcomes expectations, and a lot of operational details.
From a technology perspective, the winners are going to be the states that make it easy for a resident to choose an in-demand pathway, find the right program, enroll, and then convert that training into employment.
This is also where integrated data finally becomes more than a nice idea. If a state can connect education and workforce data, and layer on the right analytics, we can actually learn which programs work for which people and under what circumstances. That is how you improve quality over time. It is also how you reduce the burden of constantly rebuilding reports by hand, which will be a recipe for disaster.
DOL guidance that encourages innovation: Another signal is how directly the U.S. Department of Labor has been encouraging states to modernize service delivery through formal guidance in the form of TEGLs.
States should pursue waivers to improve access and performance. You see this in encouragement around virtual service models, supportive services, and more outcomes oriented approaches to contracting and program design.
If you work inside a state agency, you already know the tension here. You want a better customer experience. You want higher performance. You also cannot compromise on documentation, reporting, or audit readiness.
This is exactly the kind of problem that modern platforms and AI can help solve. Not with a shiny chatbot bolted on, but with better workflows that guide users through the right steps, reduce staff burden, and capture required information as a natural byproduct of service delivery.
Integrated Talent Marketplaces: There is a growing federal push toward integrated Talent Marketplaces. This theme shows up across multiple efforts, including the Connecting Talent to Opportunity Challenge and related federal investments.
The underlying idea is simple. States need an integrated, interoperable marketplace capability that sits above individual programs to ensure all kinds of learning is recognized in the job market. This is a system that helps people explore careers, connect to training, and find jobs, a system that employers can actually use (and want to use), and a system where skills are legible and portable.
This is where technology constraints have historically been the limiting factor. Most states have had tools that were built for compliance first and user experience second. Talent Marketplace expectations flip that. States need something that can serve as a true front door for residents and employers, while still routing people into the right programs and capturing the right data.
AI matters here because skills are the connective tissue. If you can normalize job postings, resumes, and training programs into a shared skills language, you can finally improve matching and navigation in a way that feels modern. You also improve data quality and reporting because the same underlying structure supports both experience and measurement.
Work requirements and the verification challenge: The work requirements landscape is also pushing a real systems problem across state agencies. Whether you are talking about SNAP requirements today or Medicaid requirements in the future, the operational lift to verify employment is significant — and one that workforce agencies may quickly have to support.
No matter where final rules land, governors’ offices are going to keep asking the same question: Do we have cross-agency data and verification capabilities that are accurate, compliant, and accessible for residents?
Integrated data and better digital experiences will no longer just be nice-to-haves. The alternative is manual processes that create friction for residents and administrative burden for staff, with systems that tend to break under pressure and risk residents’ eligibility status and continued receipt of Medicaid or SNAP benefits.
So, what next? For many of these policies, final details are yet to be released, but that doesn’t mean states can’t start working towards a future state where they capitalize on these policy changes to build a stronger constituent experience. If you have questions on how your state can approach implementing this work, please reach out to us at lucas.levine@futurefit.ai to explore further.
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Over the last 18 months, the future of the public workforce system has been particularly vulnerable. WIOA reauthorization was on the table in late 2024 (then off the table) and funding was disrupted during government shutdowns — all while priorities kept shifting. State workforce agencies were being asked to deliver more with the same staffing constraints and the same legacy technology.
That uncertainty hasn’t fully disappeared in 2026. But the direction of the next few years is clearer. The federal government is sending stronger signals that states will be expected to run workforce systems differently than they have over the last decade.
There will be stronger expectations around outcomes, cross-agency coordination, and leveraging technology to reach more people at scale.
These themes are peppered throughout new policies and guidance such as TEGLs, OBBBA policy shifts, and new grant opportunities ranging from pay-for-performance apprenticeships to talent marketplaces.
For state agencies, we get why this feels daunting. These policy shifts result in operational lifts. It changes what teams measure, how partners coordinate, and what technology has to do day to day.
It is also a significant opportunity for state workforce agencies to improve serving both job seekers and employers. If states lean in, workforce agencies can become even more central to how residents access opportunity, how employers find talent, and how states build long-term competitiveness.
When we zoom out, we see a consistent message across these signals. States are going to be expected to operate workforce systems as modern infrastructure, not as a set of siloed programs. That gap between expectations and current systems is not going to close on its own.
What’s encouraging is that the technology landscape has changed significantly over even just the last 5 years. As state workforce leaders, you don’t have to go at this alone:
Below are a few policy developments that have stood out over the last several months in discussions with state workforce leaders. We won’t rehash every requirement (many of which are still in flux). Instead, we want to focus on what these signals mean for technology and why innovations in data systems and AI make a different approach possible now.
Workforce Pell: Workforce Pell is one of the most discussed policy shifts on the horizon. It expands Pell eligibility to certain short-term, workforce-aligned credential programs, with a July 2026 effective date driving near-term planning. In practice, it is going to be complex. States and institutions are going to be navigating eligibility rules, reporting, outcomes expectations, and a lot of operational details.
From a technology perspective, the winners are going to be the states that make it easy for a resident to choose an in-demand pathway, find the right program, enroll, and then convert that training into employment.
This is also where integrated data finally becomes more than a nice idea. If a state can connect education and workforce data, and layer on the right analytics, we can actually learn which programs work for which people and under what circumstances. That is how you improve quality over time. It is also how you reduce the burden of constantly rebuilding reports by hand, which will be a recipe for disaster.
DOL guidance that encourages innovation: Another signal is how directly the U.S. Department of Labor has been encouraging states to modernize service delivery through formal guidance in the form of TEGLs.
States should pursue waivers to improve access and performance. You see this in encouragement around virtual service models, supportive services, and more outcomes oriented approaches to contracting and program design.
If you work inside a state agency, you already know the tension here. You want a better customer experience. You want higher performance. You also cannot compromise on documentation, reporting, or audit readiness.
This is exactly the kind of problem that modern platforms and AI can help solve. Not with a shiny chatbot bolted on, but with better workflows that guide users through the right steps, reduce staff burden, and capture required information as a natural byproduct of service delivery.
Integrated Talent Marketplaces: There is a growing federal push toward integrated Talent Marketplaces. This theme shows up across multiple efforts, including the Connecting Talent to Opportunity Challenge and related federal investments.
The underlying idea is simple. States need an integrated, interoperable marketplace capability that sits above individual programs to ensure all kinds of learning is recognized in the job market. This is a system that helps people explore careers, connect to training, and find jobs, a system that employers can actually use (and want to use), and a system where skills are legible and portable.
This is where technology constraints have historically been the limiting factor. Most states have had tools that were built for compliance first and user experience second. Talent Marketplace expectations flip that. States need something that can serve as a true front door for residents and employers, while still routing people into the right programs and capturing the right data.
AI matters here because skills are the connective tissue. If you can normalize job postings, resumes, and training programs into a shared skills language, you can finally improve matching and navigation in a way that feels modern. You also improve data quality and reporting because the same underlying structure supports both experience and measurement.
Work requirements and the verification challenge: The work requirements landscape is also pushing a real systems problem across state agencies. Whether you are talking about SNAP requirements today or Medicaid requirements in the future, the operational lift to verify employment is significant — and one that workforce agencies may quickly have to support.
No matter where final rules land, governors’ offices are going to keep asking the same question: Do we have cross-agency data and verification capabilities that are accurate, compliant, and accessible for residents?
Integrated data and better digital experiences will no longer just be nice-to-haves. The alternative is manual processes that create friction for residents and administrative burden for staff, with systems that tend to break under pressure and risk residents’ eligibility status and continued receipt of Medicaid or SNAP benefits.
So, what next? For many of these policies, final details are yet to be released, but that doesn’t mean states can’t start working towards a future state where they capitalize on these policy changes to build a stronger constituent experience. If you have questions on how your state can approach implementing this work, please reach out to us at lucas.levine@futurefit.ai to explore further.
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