Big employers' prove-it moment on workforce.

Trump II is spending big on pay-to-train incentives that seem to answer a lot of employer gripes about workforce spending. Will big employers live up to their side of the bargain?

UPDATE: I tweaked some of the below based on examples of comparative programs I got in the comments.

The issue.

There is a ton of money and energy going into incentives that pay employers to hire and train workers, particularly apprentices. The pressure is on the second Trump Administration to make it work—and big employers, who are getting a lot of what they want out of workforce policy from Trump II.

Explain.

At some point soon, the Department of Labor will publish details of a new pot of $145 million underwriting payments for employers to train workers through apprenticeships. Funding opportunities of this size are overdue in apprenticeship, where historically limited congressional appropriations get divided up so many ways that providers and employers have looked like they’re competing for oyster crackers.

The Trump Administration has a lot riding on this one. The Trump team has been on quite a journey with apprenticeship, to say the least. In Trump’s first term, under former Labor Secretary Alexander Acosta, it was reluctant to throw public dollars toward growing apprenticeship based on the thinking that employers should already be investing in apprenticeships to fix their skilled hiring needs. From a news story at the time:

“I want to challenge the assumption that the only way to move policy is to increase government spending,” Acosta said at the Monday White House news briefing. “We should measure success based on outcomes and not simply based on spending.”

In 2026, increasing spending seems to be the Trump Administration’s answer for generating those successful outcomes. Trump II took the somewhat unusual step of announcing the $145 million before it was ready to take applications. It was a smart move, as it did a lot to rebuild credibility for the Administration after a rocky start to DOL’s efforts to reach a presidential commitment of one million active apprentices.

By the math, it will be impossible for these incentives, alone, to get the Administration the 300,000 apprentices it needs to hit that mark. Still, this much money could make a big dent in an apprenticeship goal that Trump II has not had clear answers for—and it injected a ton of energy into workforce organizations.

But as much pressure is on the Administration, I think there’s also plenty of pressure on big employers to show results from these incentives. The pay-to-train incentives of Trump II give them a lot of what they want and addresses many of their post-Biden gripes about publicly funded jobs training.

If they’re not going to invest in workforce now, will they ever?

What is ‘pay to train,’ anyway?

There’s a lot happening here, and I think it makes sense to explain why pay-to-train programs are different from what’s the “traditional” approach to government workforce funding.

I call these programs “pay to train” to translate for the uninitiated, but in the wild, these programs are usually called “pay for performance” or “pay for success.” They essentially do just what they say on the label: an employer gets a monetary reward (or a reimbursement of fronted costs) if they hire (and/or retain) a worker and get them to certain training milestones, like whether they get licensed or earn a credential showing they’re competent at something that can keep them employed. The more you successfully train people, the more money you get as an employer.

In contrast, many publicly funded workforce grant programs are, well, programs—ones focused more on workers than employers. Congress set up many of these initiatives based on political and policy thinking that the cure to everything facing a poverty-afflicted individual is a job. Because reality is more complicated than that, and poverty beats the living hell out of people even when they’re capable, the projects funded under these programs can have a lot to do with building up workers so they can get hired.

Make no mistake, this “traditional” approach to workforce programs can, and does, fill jobs needs for employers. It’s part of why they still exist. But they’re not laser-focused on employer needs, and there is a frequent—and not invalid—complaint that these programs just “train and pray,” meaning they teach skills, but not ones employers are looking for in people they hire because of bad (or no) communication with employers.

In theory, pay-to-train could disarm these issues. Instead of a bunch of programmatic stuff that might reap a worker the employer might hire, pay-to-train incentives provide employers a reward for actually hiring workers and filling their skilled employment needs. Because Congress refuses to spend money on jobs policy like it damn well means it, it’s also seen as possibly more “efficient” by cutting out middlemen organizations and structures that don’t revolve around someone getting and keeping a job.

Not only does that make them a perfect fit for the Trump approach to workforce, it also allays some frustrations employers had with the Biden Administration. When the books are settled, I expect the Biden Administration will end up as having put significantly more money into workforce than the second Trump Administration, if only because of how many Biden awards that Trump II has ended. But the Biden Administration annoyed employers in asking employers benefiting from those investments that they reform their hiring and talent development pipelines. Note that “asked” is not “required,” which, as someone who was there, was a rarity in the really big-ticket Biden dollars—an issue I’d rather address in another newsletter. Even if requirements were rare, there are big employers who really chafed that they were even asked to make changes as a condition of getting money from the government. (If you’re wondering if the Biden embrace of unions was an aggravating factor, well, yeah.)

On paper, pay-to-train programs look like the inverse of the Biden approach. Beyond training workers, no one is asking employers to fundamentally change how they do business. In effect, employers just need to hire people, get them to a training endpoint, and let someone know when that happens so they can get paid. It makes sense, then, that employer-aligned groups have been rather noisy in favor of pay-to-train programs.

However they’re asking for these programs, it’s worked. The new $145 million for apprenticeship is actually part of what, in total, is a quarter-billion-dollar bet made by the Trump Administration on pay to train. Democratic states are on board too. Maryland, a state I think has a good recent track record on workforce, announced its latest spin on an incentive program last week. And if you’re in the business of workforce, you’ve probably heard a lot of excitement over these new DOL dollars after 2025 had no fewer than three potential workforce funding apocalypses as a result of the work of congressional Republicans and the White House budget office.

The bet that is, in fact, a bet.

I do think pay-to-train incentives are a good idea, and I shared my thoughts on how I think they should be structured around a year ago. They’re also not necessarily a new idea. The federal Workforce Innovation and Opportunity Act, America’s most consistent source of workforce funding, allows reimbursement of employers of up to half their costs for training workers on the job. There is good evidence that it’s a great tool that should be used more, but isn’t.¹

But let’s also be clear: the Trump approach to doing pay-to-train incentives is very much a bet. The specific extremely employer-focused approach of Trump II is juuust novel enough that I don’t think there’s a clear track record saying it will be a success. And there are reasons to wonder if a build highly focused on serving employer needs actually will get adopted by employers.

I think comparable state programs focus more on intermediaries—organizations that help start apprenticeship programs for employers—and sponsors—organizations that run apprenticeship programs that might not be the employer itself but a nonprofit, union, or an entity operated in concert by the employer and its union. The Trump money spent thus far pretty much only covers employer incentive payments and don’t really do much on worker-side issues. For example, the $86 million Trump II awarded for a pay-to-train fund in September requires that 90 percent of funds go toward reimbursing employers. What activities can be reimbursed on isn’t nearly as detailed and proscribed as some state programs. Additionally, the Trump fund barred spending on things that small- and medium-size employers tell me are often their biggest barriers in finding talent, like childcare and transportation.²

Because it’s so aggressively not program-y, there really isn’t an existing American analog for the Trump II incentive model in my opinion.³ My Robot Research Assistant couldn’t find a comparable program on this continent, and even then, there were wrinkles that I think put what it found in a different genus. (For example, a German program that paid out incentives for harder-to-place job prospects, which gives that program a different set of goals than the Trump funds.) I asked around this week for studies that support the Trump model to make sure I wasn’t missing anything. What I got in response were interesting policy papers on the potential benefits and build of pay-to-train programs. I also saw research on projects that appear to retain a lot of the program-y stuff eschewed by the Trump approach. (Maryland’s newly announced fund fits in that category, as does California’s.)

Another differentiating factor is the scale at which Trump II wants to see returns from these programs, which raises questions about their likelihood of success, too. The new Arkansas-operated incentive program for manufacturing apprenticeships, which opened a week ago, pays employers a maximum of $3,500 per apprentice employed for 90 days. If other organizations are involved, they only get 10 percent of the incentive. Manufacturers have backed pay-to-train as a way of convincing employers in their sector to take the plunge with apprenticeship to fill an estimated 400,000 unfilled jobs.

In theory, the $3,500 ceiling on payments could help maximize the number of apprentices the program generates, a boon to DOL as it tries to get apprenticeship figures over one million. But there’s reason to think it might not move the needle based on what manufacturers would have to spend to get the $3,500. After researching, I think a good illustrative estimate for a manufacturing apprentice’s starting wage is $20 per hour, or roughly $41,000 a year. Based on the hard work of the Bureau of Labor Statistics, it’s fair to add another 30 percent ($12,300) to that estimate to account for benefits.

Apprenticeship wages go up as they gain skills—it’s a key part of the model. Accordingly, it’s not unreasonable to expect the compensation costs of a manufacturing apprentice to reach $100,000—at least—not terribly long after their hire. That makes the $3,500 incentive awfully expensive-looking for a sector that, at the individual employer level, seems reluctant to embrace apprenticeship or other proactive workforce training techniques. Yes, if you hire more apprentices, you get more incentive payments. But 10 apprentices equal $35,000 in incentives compared to what could amount to $1 million in total compensation costs.

That probably makes larger manufacturers better customers for these incentives since they’re more able to absorb $1 million to $2 million in extra compensation costs (at least, theoretically) compared to a small or midsize shop. But if those manufacturers are publicly traded companies, they’re also feeling the pressure exerted by investors looking for job cuts that goose profits based on the possibilities of AI.

The big moment for big employers.

The math and the money create a hell of a lot of pressure on big employers here. From a political and policy perspective, this is also a prove-it moment.

With the tools it has available, Trump II is giving big employers pretty much everything they want on workforce. In the first two Trump incentive funds, employers get the money to hire and train without the programmatic hooks and worker-focused stuff of traditional programs—and none of the nudges of the Biden Administration to change how they operate. I would be shocked if the upcoming $145 million strayed from that approach.

But there is plenty of reason to doubt that what employer interests are calling for on workforce is far from what individual employers are ever going to do. To take a recent example, employer-aligned groups have backed skills-first hiring, a very good idea for helping employers find skilled talent. Research shows that employers have done very little skills-first hiring, even where they have made a big deal about removing barriers to hiring people based on skills, like requirements that employees have college degrees.

There also are reasons to doubt that big American employers will ever embrace apprenticeship, if only because their executive class doesn’t seem to fundamentally understand it. Apprenticeship gets a worker in the building, doing the job employers need filled, and helps them get better at it on a daily basis. Even still, big American employers complain to workforce providers about how apprenticeship doesn’t offer “immediate results.” In the past year, I have had multiple conversations with corporate officials who told me that they struggle to convince their leadership to hire apprentices because executives don’t think apprentices “contribute” on Day One.

In that sense, it’s worth thinking about why so many employers are in desperate need of skilled talent. They might not have intentionally created their problems in finding skilled talent, but they didn’t fall into those skills gaps by happenstance, either. Big employers have shed qualified talent to goose profits and probably should have invested more in workforce programs a long time ago.⁴

Which brings me back to the Acosta comments I note above. As I understood what he said publicly, his frustration was that companies benefit immensely in the long run from having workforce programs like apprenticeships that answer their talent questions. In other words, why have the government pay employers to fix a problem that they created and could have already fixed themselves? Interestingly, I don’t think that’s actually too far from the thinking behind the Biden approach. The last administration spent quite a bit of public money on employers’ challenges finding talent, but it asked employers to take steps to dig themselves out of their hole.

Trump II is giving big employers the opposite of both approaches now. So what happens if their preferred fix doesn’t return real results?

So what should we do about it?

Well, if I was going to tell people around workforce to hold their horses on getting too excited about pay-to-train, I probably ought to have done it a couple months ago. At present, the horses are far from the concept of being “held” as they possibly can be. The horses have fled halfway across the country and are concealing themselves as a traveling family of acrobats. The ruse is going poorly, but these horses are un-held. They are running wild and free and insisting to paying customers that’s what “tumbling” really means.

But if I were to try to to convince you to try to gently contain any of your remaining horses—even as they rent fast cars and visit various equine disguise shops—I would say that there are plenty of signs for caution. If you’re a policymaker, I don’t think pay-to-train is going to reap huge numbers of apprentices overnight, nor do I think it’s anywhere close to the silver bullet to getting more workers in jobs employers need filling. There may be cultural issues within employers that you literally can’t pay them to overcome. Shedding the program-y stuff makes a lot of sense on paper if you’re laser-focused on ginning up hiring stats, but it could cost you the actual workers you need to fill those jobs in a non-paper setting by killing the vital supports that make them not just qualified, but good, hirable talent.

And if you’re a big employer, well, results matter.

Let’s see what you’ve got, bud.

Card subject matter.

Apologies for delayed delivery. As I write this, it’s Tuesday, and my week has already involved the phrases “surprise chaperoning of an elementary school field trip” and “the pipe was insulated, but it’s so damn cold it cracked anyway.” After a week of kids at home due to the snowcrete-ification of the nation’s capital, my deadline didn’t stand a chance.

Anyway, I’m back tomorrow with THE MONEY. If we get a DOL incentive funding opportunity, I’ll break that down there. Also, the Senate Judiciary Committee sent the Labor Secretary a letter asking, “Did you take your staff, or anyone else while you’ve been Secretary of Labor, to a strip club?” Seems… not great.

1. Why it hasn’t been used more is really its own story, but to thumbnail: I think that workforce officials—including those at DOL—have been reluctant to use it more out of silly fears of what types of employment they might end up reimbursing. I also have heard concerns that on-the-job training reimbursement takes too much money away from the mess of other things that Congress asks to be paid out of increasingly shallow pots of WIOA dollars.

2. Just because there’s some nuance here: the nuts-and-bolts documents for the incentive fund does direct states to use their annual WIOA dollars to provide these services. Statutory language makes it hard for WIOA to cover these services, and when it does, funding levels make it hard for it cover these services effectively. Already-employed workers also might make too much money to qualify for WIOA dollars or fit in one of its other categories that makes the eligible for WIOA-funded help. In other words, Trump II has identified an option for serving these needs. It’s an option that tends not to actually give workers the help they need when they ask for it.

3. There’s plenty of room for differences of opinion here, by the way, and I’m happy to talk this one out. Email nick@jobsthat.work.

4. As I have in the past, here is where I strongly recommend reading Zeynep Ton’s last book on trying to spread the concept of good jobs through corporate America. It had one of the most revelatory passages I have read about workforce and the state of the American economy. One executive told her that her company effectively doesn’t see people as necessary to how they make money—either in the form of workers or their customers—and that is why it’s an uphill battle to get them to invest in their workforce.