Recent State Workforce Initiatives: Skills-Based Hiring, Mature Workers, and Reentry

As states continue to grapple with the effects of low unemployment and a tight labor market, lawmakers and workforce development organizations also continue to explore how to increase labor participation among nontraditional or marginalized workers – including several states which relaxed child labor laws during this year’s legislative sessions – to address areas or sectors that are experiencing workforce shortages.

While bringing more children into the labor market may ease some market stress, it is not an optimal solution, and other strategies can be employed to alleviate the labor crunch. Over the past few years, states have proposed and implemented policies and initiatives that are designed to better align businesses and workforce needs with public or higher education, increased the opportunities and incentives for apprenticeship programs, and established programs to assist the formerly incarcerated back into the labor force as a means to lessen recidivism rates and fill jobs.

In the past year, lawmakers have built upon those programs while introducing some new initiatives that seek to incentivize older (or mature) workers to either delay retirement or for those who have retired to re-enter the workforce, look to increase or re-evaluate employment positions and opportunities that weigh experience over college degrees, and, continue to expand opportunities for the marginalized to re-enter the workforce easily. These strategies were undertaken in several states during the 2023 legislative sessions. Following is a brief discussion on some of those states’ ongoing efforts and recently approved legislation to address workforce participation, ease labor shortage, and create economic opportunity and growth.

Skills-Based Hiring: Work Experience instead of College Degrees

Although the unemployment rate nationwide and in many states is at record or near-record lows, the ongoing labor shortage undermines economic recovery or growth. Over the past year, several governors have issued executive orders that seek to expand pathways to opportunity, thereby building a more inclusive and diverse workforce that addresses labor shortages and creates a stronger, fairer economy. To this end, they have issued directives that consider comparable experiences instead of diplomas or college degrees for state employment or to fill agency vacancies. This move towards “skills-based” hiring — essentially deciding that work or life experience can substitute for a diploma — for government jobs or to address teacher shortages also follows recent trends in private sector employment, enjoys bipartisan support, and has public appeal.

Currently, 38% of Americans have a four-year degree, and degree requirements can impose a paper ceiling in some jobs that overlook qualified applicants that possess comparable skills obtained through vocational training, community college, military service, and on-the-job experience. Additionally, communities of color and rural residents are particularly disadvantaged by such requirements and shut out 76% of Black adults, 83% of Latino adults, and 75% of rural residents.  Creating a more inclusive and diverse workforce leads to greater productivity, innovation, and overall economic growth.

The trend among states toward skills-based hiring started with former Maryland Gov. Larry Hogan in 2022. Since then, ten governors have issued broadly similar orders requiring state agencies to accept work and life experiences instead of a postsecondary degree during the hiring process or have opened state employment opportunities to those without a degree. Additionally, the National Governors Association (NGA), chaired by Govs. Phil Murphy (New Jersey) and Spencer Cox (Utah) have recommended that executives in the other 40 states do so.

The states now requiring state agencies to accept work and life experiences instead of a postsecondary degree include:

• Alaska: most state jobs no longer require a four-year degree, per an administrative order signed by Alaska Gov. Mike Dunleavy in February,
• Colorado,
• Maryland,
• New Jersey: experience and skills are prioritized over four-year degrees for certain state employment opportunities,
• North Carolina: Gov. Roy Cooper signed an executive order in March that removes degree requirements for many state jobs and directs that related experience(s) can be a substitute for a degree in most state jobs,
• Ohio,
• Pennsylvania: Gov. Josh Shapiro signed an executive order on his first full day in office that removes the four-year degree requirement for a majority of state government jobs and directs state agencies to emphasize skills throughout the hiring process,
• South Dakota: Gov. Kristi Noem’s executive order directs state agencies and hiring managers to consider interchangeable experiences such as employment background; apprenticeship programs; career and technical college certificates or degrees; and military service of prospective candidates,
• Utah: the state no longer requires a four-year degree for potential employees), and
• Virginia.

Earlier this month, in their continuing assessment and re-assessment of the state workforce gaps and potential participation barriers, Alabama lawmakers passed, and Gov. Kay Ivey signed, a measure (House Bill [HB] 342) that creates and builds upon alternative certification pathways for new teachers to address the state’s ongoing teacher shortages, particularly in STEM. The measure will provide a pathway to filling those vacancies with qualified individuals with comparable academic experience, such as working in STEM fields outside the teaching profession.

Meanwhile, South Carolina lawmakers, in their recent session, began consideration towards eliminating college degree requirements for most state-classified jobs. Although the session concluded without crafted or proposed legislation to do so, it is something that the chair of the Senate Labor Commerce and Industry Committee indicated will be taken up in the future.

Offsetting the Great Retirement with Pathways and Incentives

In the coming years, the nation’s workforce is expected to see a rise in the number of older workers or retirees returning to the workforce as part of what has been referred to as the Great Unretirement. Within the next year (2024), older workers (including mid-career employees between the age of 50-55 years, and those older than 55) are projected to represent the largest segment – 25% –  of the labor force. While there are various reasons driving retirees to re-enter the labor market or for those employed to hold off on retiring, for state and business stakeholders, the need to retain older workers or attract retirees to return is both about maintaining productive talent and economic growth.

As states navigate the shifting demographics of both the population and the labor force, it becomes imperative to reconsider the strategies for recruiting, training, and retaining workers. While there has been a notable decline in the number of younger workers entering the labor force (labor participation by those aged 16 to 24 is projected to shrink by 7.5% from 2020 to 2030 due to declining birth rates), which can be attributed to such factors as delayed entry due to extended education, changing aspirations, or economic fluctuations. For those aged 75 and older, the labor force is expected to grow by 96.5 percent over the next decade. This growth is attributed to longer life expectancies, delayed retirement, continued income stability or economic uncertainty.

To that end, a number of national and state programs have been created, such as AmeriCorps Seniors, which seeks to create or enhance sustainable opportunities and initiatives for adults ages 55+ to participate in national service activities, community involvement, or gain the skills needed to transition back into the workforce. The program recently awarded grants to organizations in Illinois, Kentucky, Tennessee, and West Virginia to build sustainable pathways for employment for older adults.

The Senior Community Service Employment Program (SCSEP), a community service and work-based job training program for older Americans, has partnerships and programs in 15 states to assist in building pathways for mature workers to remain or re-enter the labor market. SCSEP is authorized by the Older Americans Act and funded by grants through the U.S. Department of Labor.

States like California, Massachusetts, and Vermont also have implemented workforce initiatives aimed at older or mature workers and retirees.

These continuing initiatives provide training or educational opportunities, promote flexible work arrangements, create or advise in creating age-friendly workplaces, and encourage intergenerational collaboration. Besides assisting older workers in maintaining their skills and income, these programs also seek to reduce labor shortages and skill gaps, providing a productive, diverse, and inclusive workforce.

While recent state legislation aimed to incentivize the return of older workers into the workforce or assist older workers who remain in the labor market was limited this legislative session, two measures of note in Alabama and New York were enacted. In New York, Senate Bill [S] 3004  created the Office of Older Adult Workforce Development to address the needs of older adults in the workplace and aims to establish an age-friendly work environment. In Alabama, lawmakers passed HB 41 – a temporary return-to-work measure for certain state retirees that allows state agencies and schools to pay those returning state employees up to $52,000 a year, without suspending their retirement pensions, to fill ongoing state vacancies and address agency labor shortages. Unless extended by the Legislature, this return-to-work measure will sunset in 2027.

Formerly incarcerated reentry or return to the workforce

An estimated 70 million people in the U.S. have an arrest or conviction record, and over 600,000 men and women are released from jail each year. Connecting the formerly incarcerated with employment provides a secure income, stability, and a connection with other members of society. While it represents a second chance, providing pathways for and promoting the hiring of the formerly incarcerated or soon-to-be-released also provides businesses with much-needed labor.

The earliest and most significant concerted attempt to bring formerly incarcerated persons (FIPs) into the workforce has been the effort at both the national and state levels to “ban the box,” – which prohibits hiring managers from inquiring about an applicant’s criminal history until after a conditional employment offer has been extended. Started under the Obama administration in 2016, Congress established “ban the box” or fair-chance policy as a matter of hiring regulations for the Federal government, including contractors, in the Fair Chance to Compete for Jobs Act of 2019.

Thirty-seven states have adopted statewide laws or policies related to FIPs and fair chance policies involving public-sector employment, and in California, Colorado, Connecticut, Delaware, Hawaii, Illinois, Maryland, Massachusetts, Minnesota, Nebraska, New Jersey, New Mexico, Oregon, Rhode Island, Vermont, Washington, and the District of Columbia, those efforts have also been extended to the private sector by mandating the removal of conviction history questions from job applications for private employers.

A component of “ban the box,” which also builds upon the policy, is the Clean Slate initiative and automatic record expungement for some FIPs. This year, lawmakers in New York (awaiting Gov. Kathy Hochul’s signature) and Minnesota (signed by Gov. Tim Walz) passed Clean Slate Acts, joining Pennsylvania (2018), Utah and New Jersey (2019), Michigan and Connecticut (2020), Delaware and Virginia (2021), Oklahoma, Colorado, and California (2022) that have already done so.

Over the past few years, some other states also have implemented programs aimed at assisting businesses in meeting their workforce needs with FIPs transitioning into the workplace, such as Indiana’s HIRE, Illinois’ Re-Entry Employment Service Program (RESP), and Iowa’s Returning Citizen Initiative; with lawmakers in Illinois, Iowa, and Nebraska also approving tax credits or incentives to businesses that hire FIPs.

States have also created apprenticeship opportunities and vocational training programs for incarcerated people awaiting release. In 2021, Alabama lawmakers passed SB 323, which allows incarcerated people who complete a certified apprenticeship program to receive early release from their sentence while also providing businesses with much-needed credentialed skilled workers. And this year, the Nebraska unicameral authorized $10 million in the state’s next FY 2024-205 biennium (Legislative Bill [LB] 814) to increase spending on a vocational and life skills program that prepares inmates for life after release. 

Reforms in licensing, including occupational licenses and work records, are another way to bring FIPs into the workforce upon their release. Such documentation can ease the barriers to entering the workforce and makes the transition to employment easier. This year, Arizona lawmakers passed SB 1290, which outlines specified documentation, including ID documents, training records, and work records, that the Department of Corrections must provide to a former inmate to assist in obtaining post-release employment.

Earlier this spring, Missouri became the first state to adopt the goals of “Reentry 2030,” a national initiative that seeks to improve reentry success for those exiting prison and FIPs under supervision. The state’s Department of Corrections (DOC) has partnered with other state agencies to ensure that 80% of those leaving the prison system find and maintain gainful employment after release. By 2030, the Missouri DOC wants to expand its collaborations and partnerships with public and private entities to prepare and connect incarcerated and formerly incarcerated Missourians to gainful employment, including providing 100% of those incarcerated with career readiness services and assisting 85% of those released to obtain a job within 30 days of their release. The Reentry 2030 initiative builds upon the state’s Second Chance Employers program, is supported by both the Missouri Department of Commerce & Insurance and the Department of Economic Development, and is championed by Gov. Mike Parson, a former county sheriff, who advocates that those who are incarcerated can and should be able to reenter the workforce productively.