How Workforce Development Boosts Career And Economic Growth

This week American businesses were scrambling to reassess their workforce development strategies as the current administration proposed halting Diversity, Equity and Inclusion (DEI) grants. The shift comes as 46% of workers believe they have adequate opportunities to learn new skills, according to a 2024 PricewaterhouseCoopers survey. This highlights a gap between workforce needs and current development initiatives. Workforce development stands out as a key benefit, often provided by DEI, HR and philanthropic departments, that have economic impacts in society and within businesses.

Workforce development programs range from training, certifications, job search and advancement support, mentoring, coaching, and overall career development. This type of support is not limited to diverse communities, yet underrepresented communities often are the communities that lack the resources, skills, and access to career advancement. This skills gap is particularly evident in sectors like technology, where demographic disparities persist. For instance, as noted by the Hispanic Federation, Latinos make up one-fifth of the U.S. workforce, they represent only 8% of STEM workers.

The Hispanic Federation, a non-profit empowering and advancing the Hispanic community, distributes grants and provides accelerator programs for Hispanics to address both skills gaps and demographic disparities. There are documented success stories from the programs they have implemented. Case in point, since 2019 the Latin Digital Accelerator hosted by the Hispanic Federation, trained 30,000 people in tech-related skills, achieving an average salary increase of $10,500 per participant. This program exemplifies how strategic workforce development can drive both economic mobility and industry growth.

Key Workforce Development Benefits for Business Leaders

There are benefits to sustaining workforce development programs even across demographics. The 2024 Edelman Trust Barometer report showed that workplace DEI programs attract and keep employees across backgrounds. Per the Edelman report, 60% of people say an inclusive work culture with a well-supported diversity program is critical to attracting and retaining them as an employee. Workforce development is foundational for business development and employee well-being.

1. Employee Retention and Productivity

According to Gallup’s 2024 research on employee retention, 42% of employee turnover is preventable, with career advancement opportunities being a crucial factor. Gallup further highlights in their report how compensation and career advancement (30%) are closely intertwined markers of how employees are valued and progressing at an organization (11%). Together, they account for two in five self-reported ways voluntary leavers could have been retained.

2. Closing the Skills Gap

Industries across sectors face talent shortages in key areas, from technology to skilled trades. The World Economic Forum’s 2023 Future of Jobs Report indicates that 44% of workers’ skills will need to be updated by 2027. We are already seeing how artificial intelligence is disrupting industries, and businesses want to ensure their workforce is not left behind. Workforce development programs help ensure business resilience by expanding qualified talent pools.

3. Supporting Economic Growth

Beyond individual businesses, workforce development plays a crucial role in strengthening local and national economies. When employees are equipped with relevant skills, they contribute more effectively to their industries, earn higher wages, and stimulate economic mobility. With the support of corporate and community partnerships workforce development programs can drive meaningful change at scale.

Recent 2025 Brookings Institute research reveals the profound impact of income instability on low-income workers’ financial well-being. Earnings instability particularly have a significant effect on financial distress for low-income workers, with 82% experiencing significant month-to-month income variations. This volatility stems not from worker preferences but rather from structural labor market conditions, as evidenced by the fact that two-thirds of low-income workers’ irregular schedules are employer-driven. The data demonstrates that income instability disproportionately affects low-income households, with these workers being 3.5 times more likely to report difficulties paying bills due to income volatility compared to higher-income counterparts

Workforce development programs can address this challenges. It enables workers to effectively reflect on their labor market demands while building a path for more sustainable, stable careers.

The Effects of Workforce Development

The evidence points to workforce development as a crucial factor of both organizational and economic progress. Businesses that maintain strong workforce development programs can see improved employee retention and productivity. These programs help businesses remain competitive in a rapidly evolving market landscape, particularly as industries face widespread talent shortages. The decision for business leaders is no longer about whether workforce development matters, but about ensuring their organizations act swiftly and effectively to remain competitive.