Building Local Skills Marketplaces: A Guide for Local Communities
Making the case for the local skills marketplace
Introduction
The world of work is changing at an unprecedented speed and scale. Artificial intelligence is reshaping labor demand in unpredictable ways. Workers are navigating growing financial insecurity with fewer supports to fall back on. Backlash has made it feel riskier to focus on diversity, fairness, and inclusion, even though business leaders know that these efforts support talent attraction and retention.
At FSG, we have spent decades working alongside employers, funders, and workforce organizations to build career pathways that enable employees to thrive and allow companies to attract, retain, and develop high-quality talent. Today’s challenges are not new, but the pace and convergence of change is creating a new level of urgency.
Everyone in this field is trying to figure out how to respond, and there is no single right answer. However, we see four opportunities for employers and funders to focus their efforts in the current environment, grounded in the evidence of what works and what we are seeing across the organizations we are honored to support.
Rupture Requires a Whole-System Response
What this moment demands is bringing the system together: workers, employers, educators, workforce organizations, and funders operating together rather than in parallel silos. Too often, workers pursue advancement without clear visibility into employer needs. Higher education is often disconnected from fast-changing talent strategies. Funders invest in training programs that never connect to each other or to employer demand. This fragmentation is not just inefficient; in a moment of rupture, it is a harmful barrier to sustained progress.
The stakes are real. Companies risk losing an estimated $8.5 trillion in revenue due to skills gaps and underinvestment in preparing their workforces for AI, robotics, and other technological advances. Meanwhile, the World Economic Forum projects that while 92 million jobs will be displaced by 2030, 170 million new roles will be created. Turning today’s workforce rupture into opportunity will only be realized through coordinated action across the full workforce ecosystem.
The workforce rupture is not just a skills gap or technology disruption; it is a systems shock that requires a systems response. This means shifting the conditions that hold a problem in place and working across multiple levels of change. Large-scale social change requires cross-sector coordination: a common agenda, shared measurement, and the backbone infrastructure to sustain it over time. For funders, this is the moment to invest in the connective tissue needed for cross-sector collaboration rather than funding programs in isolation. For employers, this is the moment to show up as a key partner within the local workforce ecosystem to share hiring needs and connect to training providers.
Balance Urgency and Intention
When everything feels uncertain, the instinct is to act: to launch a new initiative, fund a new model, or chase the latest headline about AI. This moment calls for something harder: slowing down enough to get clear on what you are actually solving for. The most forward-thinking leaders can do both. They respond to urgent needs, including affordability constraints affecting their workers right now, while staying disciplined about the deeper problems they are solving and the long-term change they are trying to create.
We know that skills-first transformation requires going beyond policy change to invest in building a skills-based culture, which takes time and intention. Removing degree requirements from job descriptions opens the door, but it is culture transformation that drives lasting business impact and unlocks genuine career mobility for workers. That kind of change unfolds over three to five years or more, which means the work starts now. For employers, this means resisting the pressure to chase every new AI tool or workforce trend and instead getting clear on your talent strategy: where you are trying to go, what your workforce needs to get there, and how you will create a culture that supports your vision. For funders, the same discipline applies to your portfolio: fewer bets, deeper investment, and a clearer theory of how the pieces connect.
Listen Early and Often
Across the field, employers and funders are convening right now to set priorities and make significant resource decisions. Many of those conversations are happening without the people who are most affected, and most informed, at the table.
Our work on Engaging Frontline Employee Voice found that valuing the knowledge and expertise of frontline employees is essential to a comhttps://www.talentrewire.org/resources-and-tools/engaging-frontline-employee-voice/pany’s ongoing success, and that the most important desire from frontline workers is to be seen as human and to be treated with dignity. Critically, engaging employee voice is not only about seeking perspectives, but also about acknowledging and acting on what is shared; because gathering feedback without acting on it can do more harm than not gathering feedback at all.
As AI decisions get made inside organizations, workers need to be in the room. Our work on Retail’s Tech Transformation found that success in building technology career pathways depends on adopting a skills-based mindset, aligning training with business needs, and piloting place-based strategies that account for local labor market dynamics — none of which is achievable without workers and local leaders genuinely shaping the design.
For funders, this is the moment to use your convenings and grantee relationships not just to coordinate grants but to surface what is actually happening on the ground. Grantee partners are seeing the real-time effects of AI adoption, workforce displacement, and shifting employer demand in ways that aggregate data cannot capture. For employers, intentionally bringing employee voice into strategy produces better decisions and more durable investments.
Embrace Place as Your Unit of Change and Lead With Agility
Workforce challenges are rooted in specific communities, local labor markets, and the particular ecosystems of employers, educators, and workforce organizations that serve them. The trust that makes change possible is local, and so is the disruption that threatens it. Investment is needed to strengthen relationships and enable coordination across actors in place.
Our work on How Corporations Can Be Place-Based Change Agents identifies four ways companies are already stepping into this role across various places and issues: as anchor institutions that catalyze local economic growth; as collaborators who support multisector place-based efforts; as specialists who prioritize one locally relevant issue and deploy a range of resources to address it; and as the community-directed companies who design their local investment strategies by prioritizing community voice and input. Place is not just a geographic boundary, it is where trust is built, systems are visible, and change becomes possible. Funders who go beyond traditional grantmaking to become facilitators, connectors, and learners within a cross-sector ecosystem, led by community wisdom, are the ones who can catalyze the lasting, equitable change that no single actor can achieve alone. And our hot off the press research, Building Local Skills Marketplaces: A Practical Guide for Communities and Employers shares practical strategies for funders to accelerate the creation of durable place-based adoption of skills approaches.
For funders, stop grantmaking from a distance; rather, become a present, flexible partner in place, and give communities the resources and room to lead their own change. For employers, your best workforce strategy isn’t the one on paper, it’s the one you write and revise based on regular feedback, coordination, and adaptation to ensure that approaches meet the evolving needs of the company and workforce.
What This Moment Asks of Us
This moment calls for funders who can see the whole system, stay clear on strategy, remain deeply connected to place, and center the voices of those closest to the problem. It also calls for employers who can clarify their talent strategy, build talent from within the communities where they operate, and bring workers into the room as AI decisions are made. Together, we can turn today’s workforce rupture into a more equitable future for all.
That future is possible. The evidence base for what works is strong. The field’s commitment to advancing equity continues. And the partnerships among employers, funders, and community partners already doing this work — imperfectly and under pressure — are present, proven, and worth defending.
FSG will be sharing more of what we are learning throughout 2026 across three interconnected areas: Employee Voice, Artificial Intelligence and the Future of Work, and Work in Place. These are not separate topics; they are threads in the same rupture, and addressing them in isolation will produce only partial answers. If you are an employer or funder wrestling with how to make workforce decisions at this moment, we invite you to think alongside us.
