A Continuing Focus on Workforce Development and Job Training

A Continuing Focus on Workforce Development and Job Training

Forecast '26: Lawmakers are investing in high-value workforce credentials, expanding access to paid leave and rebuilding the public sector.

According to Georgetown University's Center on Education and the Workforce, the U.S. will need an additional 5.25 million skilled workers by 2032, as retirements currently outpace the hiring of new workers. Among the workers most in demand are health care practitioners with a bachelor's degree or higher. (Morsa Images/Getty Images)

As states confront evolving workforce challenges, policymakers are increasingly focused on strategies that strengthen talent pipelines, support workers and modernize government systems. Across the country, legislatures are investing in high-value workforce credentials, expanding access to paid leave and rebuilding the public sector to attract and retain skilled employees.

Forecast '26 is a special report from State Legislatures News covering the topics NCSL's policy experts anticipate will occupy state lawmakers' time in 2026 legislative sessions. Read the full report.

Hot Topic: Workforce Credentials With Proven Returns

Workforce development and job training remain critical issues for states, as worker shortages are expected to increase in the coming years. According to Georgetown University's Center on Education and the Workforce, the U.S. will need an additional 5.25 million skilled workers by 2032, as retirements currently outpace the hiring of new workers. In recent years, lawmakers have enacted measures to alleviate existing worker shortages and ramp up training programs for jobs in growing sectors, such as biotechnology, microchip manufacturing and artificial intelligence.

In response to the vast number of nondegree programs, NCSL anticipates that state legislatures will direct investments into job training and credentialing programs that have a proven return on investment and positive outcomes for learners, employers and the state. Some states, including Louisiana and Illinois, have already enacted legislation requiring a state analysis of the return on these programs.

Trending: Rebuilding and Reshaping the Public Sector

The 2025 legislative session showed sustained state-level interest in public sector workforce development, continuing a pattern established in recent years. Legislation tracked in NCSL's Public Sector Workforce Database typically emphasized employee benefits as retention tools, alongside placing a greater financial value on employee longevity.

One established trend likely to continue through 2026 is bipartisan, cross-regional support for paid leave and other benefits programs in the public sector-particularly for parental and bereavement reasons. And increasing access to mental health care will likely remain a legislative priority, particularly for first responders.

Many states are using financial strategies to recruit and retain public sector employees. These include signing and tenure bonuses, as well as reducing or eliminating pension penalties for retired workers who reenter the workforce, typically teachers or law enforcement officers. To broaden the recruitment pool, legislatures are also giving state agencies the option-and sometimes mandate-to review and eliminate unnecessary degree requirements.

Hot Topic: Paid Leave

Child care costs continue to be a top issue for families. And as more Americans take on family caregiving duties, according to the AARP, policymakers aim to provide constituents with increased flexibility and financial security to take time off from work when needed.

Over the last few years, states have significantly expanded access to various types of paid leave and are likely to continue doing so in the 2026 legislative session. Currently, 13 states and Washington, D.C., offer publicly funded paid family and medical leave programs for all employees. Dozens of others have introduced or implemented paid parental leave policies for state employees after the birth or adoption of a child, particularly to make public sector positions more attractive to job applicants.

Another trend: the creation of private insurance options for paid family and medical leave. Over the last two years, 10 states have created voluntary paid leave coverage options that employers can provide through private insurers, and many more have introduced legislation to do the same. Policymakers' interest in paid leave is likely to continue, even as state approaches vary from public to private.

Trending: Agency Coordination and Consolidation

To better track data on workforce training and credentialing programs, states including Alabama, Delaware and Tennessee are aligning their workforce and education systems. This ensures that workers meet qualifications for in-demand jobs after completing high school and postsecondary education, and that programs are proving effective in filling workforce needs.

Similarly, states also are examining ways to restructure or streamline their agencies while maintaining service delivery. The consolidation and reorganization of state agencies has emerged as a growing trend, mirroring sentiment at the federal level. Some states assisting displaced or laid-off workers amid federal workforce reductions.

As legislatures navigate workforce challenges and evolving economic conditions, they aim to strengthen their labor markets with practical, data-driven approaches. From investing in high-value credentials and expanding paid leave programs to modernizing public sector systems, state policymakers are working to build a more resilient and responsive workforce. These efforts reflect an ongoing commitment to aligning education, employment and public service strategies to meet current and future needs across sectors and regions.