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A new class of governors is preparing to take office following this week’s elections, representing one of the largest transitions in state leadership in recent years.
These leaders will face a familiar paradox: employers struggling to find qualified talent, workers struggling to find pathways to better jobs, and billions of dollars flowing through workforce and education systems that are too often disconnected from outcomes.
AI raises the stakes. It is changing what jobs require faster than most programs can adapt, putting pressure on systems built for a slower economy.
The challenge for incoming governors isn’t to fund more training programs or announce new initiatives. It’s to make the programs they inherit work as one coherent system.
And at a time when affordability and economic security top everyone’s lists of priorities, few opportunities offer a governor a legacy as tangible as this one: making sure every resident in their state has a clear path to economic opportunity.
That will require a different approach to workforce leadership, and some consequential decisions in the first 100 days.
There are several forces converging that are fundamentally changing what states need from their workforce systems:
AI is reshaping work. While debate continues about the scale and timing of AI-driven job displacement, its impact on the skills workers need is already underway. Rather than spending time debating what the impact may be, we should spend more effort on managing the transition.
Workforce is a key constraint on economic growth and competitiveness. Across industries such as healthcare, advanced manufacturing, construction, and energy, employers need reliable pipelines of skilled workers. For governors seeking to attract investment and strengthen regional economies, workforce development is economic development.
Talent marketplaces have become a national priority. Earlier this year the Department of Education's $15 million Connecting Talent to Opportunity Challenge selected ten states to build systems that better integrate education and workforce, and talent marketplaces now consistently show up across federal workforce funding guidance. A separate cohort of 30+ states joined Powering Trust in Skills with Walmart, NGA, and the Center for Skills by C-BEN.
Federal policy is creating new opportunities and obligations. Workforce Pell is expanding access to federal aid for short-term training, giving governors an important role in identifying programs aligned with economic demand. And Medicaid work requirements take effect January 1, 2027, the same month most new governors take office. Millions of residents will need to document work, training, or community service, and the workforce system will be part of how they do it. Together with expanded SNAP work requirements, that puts workforce, human services, and Medicaid agencies on the same deadline from Day 1.
There is unusual flexible money in the system. DOL is encouraging governors to utilize their WIOA reserve funding for innovation. Rural Health Transformation and Medicaid and SNAP implementation funding are also in play, and the first budget decides where much of it goes. Philanthropy is also stepping up to respond to the AI transition. RAISE US, launched in June by former governors Gina Raimondo and Eric Holcomb, aims to raise $1 billion for worker transitions. A coalition of funders led by Rockefeller launched All in for Jobs last month, with over $800 million committed. States with a clear plan will attract that capital first.
A resident's path from a layoff to a better job can run through a workforce board, a college, an employer and a benefits office, each with its own funding, rules,systems, and incentives. No agency can connect them alone, which is why more states are moving workforce strategy into the governor's office through structures like Connecticut's Office of Workforce Strategy, South Carolina's Coordinating Council for Workforce Development and Indiana's Governor's Workforce Cabinet.
That makes this a moment for governors to lead on a statewide talent strategy. One plan, owned by the governor, can align economic development, education, workforce and human services around the jobs the state wants to grow and the people who can fill them. Governors hold the levers to make it real: the first budget, WIOA statewide funds, board appointments, the WIOA state plan and executive orders on data sharing. The five decisions below are the building blocks.
In most states, every agency owns a program and no one owns the result. Fixing that matters more than which org chart you pick. Governors typically choose among three models: a lead in the governor’s office, a lead agency or a consolidated cabinet. A full re-org is rarely worth spending your first year on. The model that works best pairs a senior leader in the governor’s office, who sets direction and holds agencies accountable, with agency heads who share the same goals and are measured against them..
Where to start: Within 30 days, inventory workforce funding, programs, technology and performance measures across agencies. Then set three to five shared outcomes, such as faster reemployment or higher earnings after training, each with a named owner who answers to the governor.
Most states can't follow a resident from first contact to a job and earnings. Even if the data exists, governance gaps prevent it from being shared and utilized to improve workforce outcomes. Our work with the New Jersey Department of Labor shows how enriching wage records with outside data can improve outcomes measurement. Strong data infrastructure can help states better track what is happening in their labor market and help individuals make more informed decisions using reliable data about where there is opportunity and how to access it.
Where to start: List the questions leadership can't answer today: Which training programs lead to higher earnings? How many referrals turn into services? Which employers hire from state-funded programs? If agencies can't access UI wage records, fix that first. Then publish a short scorecard and review it quarterly.
Workforce Pell raises the stakes on a long-standing gap: education and training measured by enrollment rather than jobs and earnings. Talent marketplaces face a similar risk, as Aspen Institute research found that most effort goes into organizing skills data and far less into whether employers use it. The states making the most progress in workforce give employers a leading seat at the table, co-designing programs and ensuring that trained workers are truly job-ready.
Where to start: Pick two or three priority sectors, bring employers in early with specific occupations and hiring commitments, and start to evaluate which pathways would actually work. Use the same outcomes framework to raise the bar on your Eligible Training Provider List and on state-funded training, so dollars follow programs that actually lead to jobs.
A resident looking for work today has to navigate the state’s labor exchange, often one of its oldest systems, plus separate sites for training, benefits and career services, repeating their story at each one. Many give up along the way.
The answer is one front door connected to the services behind it. Connecticut’s Career ConneCT, built with FutureFit AI, serves nearly 50,000 residents because it links them directly to training providers, coaches and supportive services across the state.
That front door matters most at moments of transition. When someone files an unemployment claim, for example, the state already has their attention. Several states are now using AI to turn that moment into a faster path back to work.
Where to start: Map three resident journeys: a laid-off worker, a working adult seeking advancement and a Medicaid enrollee who must now document work. Redesign the one where people drop out most in year one. FutureFit AI can help run this exercise.
Workforce initiatives tend to end when their sponsor leaves office, not when they stop working. Strategies that last are written into statute and the base budget, shared with agencies and built on infrastructure the next administration inherits. Public reporting helps too: results residents can see are harder to unwind.
Where to start: For each priority, ask what it would take to survive a change in administration, and build that in now.
Four years from now, AI will have reached deeper into every state’s economy, and every governor will face the same question: when work changed, did your state help people change with it?
The governors who can answer yes won’t get there with a single initiative. They’ll get there by doing the less visible work early: putting outcomes front and center, breaking down silos, and building a talent strategy strong enough to outlast their own term.
Few governors get a better chance to shape their state’s economy for a generation. This class has one.
At FutureFit AI, we build workforce infrastructure that connects people, programs, and employment – and the data underlying it all. Transition teams and policy staff can contact lucas.levine@future.ai for the full playbook or to talk through where to start.
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A new class of governors is preparing to take office following this week’s elections, representing one of the largest transitions in state leadership in recent years.
These leaders will face a familiar paradox: employers struggling to find qualified talent, workers struggling to find pathways to better jobs, and billions of dollars flowing through workforce and education systems that are too often disconnected from outcomes.
AI raises the stakes. It is changing what jobs require faster than most programs can adapt, putting pressure on systems built for a slower economy.
The challenge for incoming governors isn’t to fund more training programs or announce new initiatives. It’s to make the programs they inherit work as one coherent system.
And at a time when affordability and economic security top everyone’s lists of priorities, few opportunities offer a governor a legacy as tangible as this one: making sure every resident in their state has a clear path to economic opportunity.
That will require a different approach to workforce leadership, and some consequential decisions in the first 100 days.
There are several forces converging that are fundamentally changing what states need from their workforce systems:
AI is reshaping work. While debate continues about the scale and timing of AI-driven job displacement, its impact on the skills workers need is already underway. Rather than spending time debating what the impact may be, we should spend more effort on managing the transition.
Workforce is a key constraint on economic growth and competitiveness. Across industries such as healthcare, advanced manufacturing, construction, and energy, employers need reliable pipelines of skilled workers. For governors seeking to attract investment and strengthen regional economies, workforce development is economic development.
Talent marketplaces have become a national priority. Earlier this year the Department of Education's $15 million Connecting Talent to Opportunity Challenge selected ten states to build systems that better integrate education and workforce, and talent marketplaces now consistently show up across federal workforce funding guidance. A separate cohort of 30+ states joined Powering Trust in Skills with Walmart, NGA, and the Center for Skills by C-BEN.
Federal policy is creating new opportunities and obligations. Workforce Pell is expanding access to federal aid for short-term training, giving governors an important role in identifying programs aligned with economic demand. And Medicaid work requirements take effect January 1, 2027, the same month most new governors take office. Millions of residents will need to document work, training, or community service, and the workforce system will be part of how they do it. Together with expanded SNAP work requirements, that puts workforce, human services, and Medicaid agencies on the same deadline from Day 1.
There is unusual flexible money in the system. DOL is encouraging governors to utilize their WIOA reserve funding for innovation. Rural Health Transformation and Medicaid and SNAP implementation funding are also in play, and the first budget decides where much of it goes. Philanthropy is also stepping up to respond to the AI transition. RAISE US, launched in June by former governors Gina Raimondo and Eric Holcomb, aims to raise $1 billion for worker transitions. A coalition of funders led by Rockefeller launched All in for Jobs last month, with over $800 million committed. States with a clear plan will attract that capital first.
A resident's path from a layoff to a better job can run through a workforce board, a college, an employer and a benefits office, each with its own funding, rules,systems, and incentives. No agency can connect them alone, which is why more states are moving workforce strategy into the governor's office through structures like Connecticut's Office of Workforce Strategy, South Carolina's Coordinating Council for Workforce Development and Indiana's Governor's Workforce Cabinet.
That makes this a moment for governors to lead on a statewide talent strategy. One plan, owned by the governor, can align economic development, education, workforce and human services around the jobs the state wants to grow and the people who can fill them. Governors hold the levers to make it real: the first budget, WIOA statewide funds, board appointments, the WIOA state plan and executive orders on data sharing. The five decisions below are the building blocks.
In most states, every agency owns a program and no one owns the result. Fixing that matters more than which org chart you pick. Governors typically choose among three models: a lead in the governor’s office, a lead agency or a consolidated cabinet. A full re-org is rarely worth spending your first year on. The model that works best pairs a senior leader in the governor’s office, who sets direction and holds agencies accountable, with agency heads who share the same goals and are measured against them..
Where to start: Within 30 days, inventory workforce funding, programs, technology and performance measures across agencies. Then set three to five shared outcomes, such as faster reemployment or higher earnings after training, each with a named owner who answers to the governor.
Most states can't follow a resident from first contact to a job and earnings. Even if the data exists, governance gaps prevent it from being shared and utilized to improve workforce outcomes. Our work with the New Jersey Department of Labor shows how enriching wage records with outside data can improve outcomes measurement. Strong data infrastructure can help states better track what is happening in their labor market and help individuals make more informed decisions using reliable data about where there is opportunity and how to access it.
Where to start: List the questions leadership can't answer today: Which training programs lead to higher earnings? How many referrals turn into services? Which employers hire from state-funded programs? If agencies can't access UI wage records, fix that first. Then publish a short scorecard and review it quarterly.
Workforce Pell raises the stakes on a long-standing gap: education and training measured by enrollment rather than jobs and earnings. Talent marketplaces face a similar risk, as Aspen Institute research found that most effort goes into organizing skills data and far less into whether employers use it. The states making the most progress in workforce give employers a leading seat at the table, co-designing programs and ensuring that trained workers are truly job-ready.
Where to start: Pick two or three priority sectors, bring employers in early with specific occupations and hiring commitments, and start to evaluate which pathways would actually work. Use the same outcomes framework to raise the bar on your Eligible Training Provider List and on state-funded training, so dollars follow programs that actually lead to jobs.
A resident looking for work today has to navigate the state’s labor exchange, often one of its oldest systems, plus separate sites for training, benefits and career services, repeating their story at each one. Many give up along the way.
The answer is one front door connected to the services behind it. Connecticut’s Career ConneCT, built with FutureFit AI, serves nearly 50,000 residents because it links them directly to training providers, coaches and supportive services across the state.
That front door matters most at moments of transition. When someone files an unemployment claim, for example, the state already has their attention. Several states are now using AI to turn that moment into a faster path back to work.
Where to start: Map three resident journeys: a laid-off worker, a working adult seeking advancement and a Medicaid enrollee who must now document work. Redesign the one where people drop out most in year one. FutureFit AI can help run this exercise.
Workforce initiatives tend to end when their sponsor leaves office, not when they stop working. Strategies that last are written into statute and the base budget, shared with agencies and built on infrastructure the next administration inherits. Public reporting helps too: results residents can see are harder to unwind.
Where to start: For each priority, ask what it would take to survive a change in administration, and build that in now.
Four years from now, AI will have reached deeper into every state’s economy, and every governor will face the same question: when work changed, did your state help people change with it?
The governors who can answer yes won’t get there with a single initiative. They’ll get there by doing the less visible work early: putting outcomes front and center, breaking down silos, and building a talent strategy strong enough to outlast their own term.
Few governors get a better chance to shape their state’s economy for a generation. This class has one.
At FutureFit AI, we build workforce infrastructure that connects people, programs, and employment – and the data underlying it all. Transition teams and policy staff can contact lucas.levine@future.ai for the full playbook or to talk through where to start.
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