500 Jobs, One Question: Applying Systems Thinking to the Skills Gap in Arkansas

August 27, 2026

Workforce development initiatives are designed to provide opportunities for training and meaningful employment, thus contributing to participants’ economic security. As more people gain employment, work more hours and improve their productivity, the overall economy benefits. However, efforts within the workforce development ecosystem can be siloed and lack certain coordination among organizations and agencies. Part of this is because workforce development systems are complex. They comprise many interdependent parts, with changes in one area affecting others. Understanding these interdependencies and aligning strategies to avoid unintended consequences require a bird’s-eye view of the system.

The wider workforce development system includes multiple stakeholders, from community colleges and nonprofits to philanthropies and employers. These actors derive funding from a range of federal, state and private sources. Creating strategic alignment within the workforce development system can therefore be challenging. Demographic shifts, technological advancements and changes in the national and global economy further add to this challenge. Yes, the workforce development system is complex, but the value it provides is immense. By applying a systems perspective, we can build a common understanding of how workforce development operates, helping it better support workers and drive economic growth.

In this case study, we share the results of an exploratory project conducted with workforce development leaders in Arkansas.Arkansas is part of the Eighth Federal Reserve District, which also covers most of Missouri and parts of Illinois, Indiana, Kentucky, Mississippi and Tennessee. The impetus for the project was a prior conversation with one such leader, who had raised a concern about connecting employers with skilled workers. The leader shared that practitioners in the workforce development space all understood the mismatch between employers’ need for skilled labor and those workers’ availability, but then identified a challenge:The practitioner’s responses have been edited for brevity and clarity.

This short conversation covered three cases for applying a systems thinking approach to the larger issue.

• Numerous stakeholders across multiple sectors—nonprofits, employers, government agencies—were involved, creating a lack of coordination among nevertheless well-intentioned organizations.
• Divergent perspectives and individual interests among organizations contributed to a lack of alignment.
• Uncertainty regarding which problems to address and which ideas to prioritize further exacerbated the misalignment.

When we shared systems thinking as a potential means for moving toward strategic alignment, there was interest in applying it. In the following sections, we will discuss what we did and what we found.

What Did We Do?

At first, we didn’t have a clearly defined problem to address. As a result, we began by exploring various issues within the workforce development system. This approach, in which stakeholders work together to identify the main problem, is a common initial step in systems thinking. Usually, the exact problem becomes clearer through conversations and group interaction.

We conducted semi-structured interviews with six groups of stakeholders to collect contextual information regarding the current state of workforce development, recent changes and their outlooks. We reached out to institutions that played a significant role in workforce development and covered large portions of the state. Understanding individual perspectives is important to the process. It gives the facilitator insights into important themes and helps the facilitator anticipate possible tension and identify barriers to a more productive systems mapping session. The questions used for these interviews are included in Appendix A.

Systems Mapping Workshops

With the information collected from the interviews, we designed two half-day systems mapping workshops.In the field of systems thinking and system dynamics, these workshops are referred to as group model building, or GMB. We instead use the term “systems mapping” throughout this work. To build these workshops, we relied on documents referred to as “scripts.” A script is a detailed description of how the workshop should be run.One resource that systems thinking experts use to design and organize such scripts is Scriptapedia. The table below records the name of each script we used, its specific goal and a brief description. Appendix B is an abbreviated version of our workshop agenda. (See our tools and resources for more details.)

Graphs created by workshop participants during the BOTG exercise (top left) were organized into clusters to identify emerging themes. During the connection circle exercise (top right), workshop participants used variables from the BOTG exercise to begin drawing connections. Post-it notes on the systems map (bottom) record ideas shared during the places-to-intervene activity.

What Did We Learn?

In this section, we will first describe the key themes from our pre-workshop interviews with stakeholders. Then, we will discuss the workforce development systems map created by the group during our workshops and the potential areas for intervention that it revealed.

Themes from Key Informant Interviews

Our conversations with workforce development stakeholders from across Arkansas yielded eight broad themes to explore further. These themes, which are described in detail below, range in topic from labor force indicators and regional demographics to training and education.

Building a Workforce Development Systems Map

During the workshops facilitated by the St. Louis Fed’s Community Development team, participants co-developed a systems map. If you are unfamiliar with the concept of feedback loops, the building blocks of a system, refer to our systems thinking fundamentals.

Process Reflection: Participant Perspective

“One of the greatest strengths of this effort was bringing together people who don’t often have the opportunity to step back and view the workforce system as a whole. By breaking down silos and building stronger relationships across sectors, we can create more-coordinated solutions that help more Arkansans access education, training and meaningful careers.”

—Edie Stewart, CEO, Forward Arkansas

In group discussions, participants began to coalesce around a skilled workforce gap as the problem. The group considered a wide range of skills when defining this issue. For example, one participant emphasized that Arkansas needed engineers and math teachers, while another shared fears of a declining number of people with commercial driver’s licenses. Therefore, we are defining skilled workforce to encompass all the skills required to fill open job positions in the state.

The skilled workforce gap is the gap between the desired size of the skilled workforce and its present size. For instance, if the state’s desired skilled workforce is 100 people but its actual skilled workforce is only 75 people, the skilled workforce gap would be 25 people. Participants then began sharing their causal hypotheses about what happens when such a gap exists. The systems map, reproduced below in parts, tells the story of these hypotheses from people who are embedded in the workforce development system.

Process Reflection: Participant Perspective

“Examining a workforce system through a systems mapping process with fellow workforce practitioners from the Eighth District provided an opportunity to identify and understand the system and its interdependencies at an individual component level. The workforce system is complex, and each of us plays an integral role in ensuring employers receive a skilled and competent workforce. Identifying challenges and aligning strategies ensures a healthy workforce system that meets the needs of all stakeholders. I am grateful for the experience and thank the leaders at the St. Louis Fed for the invitation to participate in and contribute to the case study.”

—Carol Silva Moralez, Executive Director, Upskill NWA

A gap in the skilled workforce results in the establishment of training programs to fill it. (See Figure 1.) As training programs are established, the number of people enrolled in training would rise, leading to more people completing that training. As more people are trained, the skilled workforce increases, eventually closing the skilled workforce gap. Many may have encountered this balancing feedback loop (B1), as much of workforce development is about identifying and closing this gap.

The time it takes to complete training plays an important role. Depending on the type of training program, it could take six months to two years to close this feedback loop. But we also should consider the capacity of a region or state to provide training. (See Figure 2.) As more people enroll in training, it leaves less space for others. This process is captured by the second balancing feedback loop (B2) and works to slow overall progress toward closing the skills gap. For example, demand for welders may be large and training programs may exist, but the waiting list could be long.

The speed at which training capacity can increase is affected by the time it takes to design and implement these programs. This may not matter as much for programs that are already underway, but as demand for skills changes, providers must identify new skills needs, design programs that can teach those skills, and launch the offering. Workshop participants shared that this could take a lot of time because it requires coordination among stakeholders. Navigating the bureaucracy of different systems adds to the runway for implementing programs. Even when things are working well, institutional change, such as new leadership, can delay the process as priorities evolve.

During the workshops, participants shared that a skilled workforce gap can lead to coordination between public and private entities. This coordination results in investments to enhance the capacity for education and training. (See Figure 3.) Examples of this type of investment include funding to hire teachers and infrastructure development for training facilities. This balancing feedback loop (B3) counteracts the capacity constraint and can help close the skills gap quicker.

Process Reflection: Participant Perspective

“One of the most valuable aspects of this process was seeing workforce development through a systems lens rather than as a single organization. The mapping process reinforced that preparing Arkansas’ future workforce begins well before individuals enter the labor market and depends on meaningful collaboration among K-12 education, higher education, employers, workforce organizations and community partners. As a representative of an organization that works with educators across Arkansas, I appreciated the opportunity to better understand where our work fits within the broader workforce ecosystem and how stronger coordination can create more-effective pathways for students and workers alike.”

—Kathleen Lawson, Executive Director, Economics Arkansas

Coordination between public and private entities not only leads to investments, but, according to workshop participants, may enhance the overall effectiveness of programs. As the effectiveness of training programs increases, it can also increase the effectiveness of recruiting. (See Figure 4.) Participants defined an effective program as one that increases the rate of job placement, provides higher wages and improves retention. Showing that a training program has achieved these outcomes can be a significant motivator for recruitment. This balancing feedback loop (B4) helps further close the overall loop, because the longer it takes to recruit trainees for such programs, the longer it takes to eliminate the skilled workforce gap.

So far, we have highlighted balancing feedback loops that work in tandem to close the skilled workforce gap. However, workshop participants also shared a few virtuous cycles, or reinforcing feedback loops, that speed up the process. (See Figure 5.) Coordination between public and private entities was at the heart of these virtuous cycles. Public and private entities working together may help to foster a policy environment that is more supportive of workforce development. Such a policy environment can further incentivize public and private entities to find new ways to collaborate, which enhances both investments in training programs to increase capacity and the effectiveness of those programs. A policy environment prioritizing workforce development could also lead to more funding, which enables further coordination. Participants argued that sustaining effective coordination requires resources that are rarely present. Finally, funding would directly affect investments in enhancing training capacity. These reinforcing feedback loops (R1, R2, R3) all work to accelerate the process and close the workforce gap.

During the workshops, participants spent a lot of time talking about barriers that affect enrollment in training programs. Such barriers are not part of any specific feedback loop in the current systems map, but they can significantly slow the process of closing the skills gap. Participants agreed that an “if you build it, they will come” strategy doesn’t always work. People may not know that the resources (i.e., training programs) even exist. Access to training and who has that access became a feature of discussion. (See Figure 6.) Effective communication can help increase access to training opportunities, but this may depend on marketing resources. Often, there are resources for building programs but not for marketing them. Similarly, information can change rapidly, and how long it takes to update resources can impact the effectiveness of the communication. Finding a website that lists a training opportunity which no longer exists can create frustration. Benefits cliffs—the point at which a household’s total income could decrease if wages increase enough to disqualify the household from assistance—can also act as a barrier to recruitment.See this Fed Communities article for more information about benefits cliffs.

Finally, participants discussed how migration (both into and out of the state) can have a significant effect on closing the skilled workforce gap. (See Figure 7.) Imagine taking years to build the skilled workforce in a region only for workers to move to a different state because of relative wages or quality of life. Most of the system we mapped works to close the skills gap, but if the skilled workforce leaves, that simply won’t happen. Conversely, skilled workers might migrate into a region because of attractive jobs, which closes the skills gap.

In summary, balancing and reinforcing feedback loops interact in dynamic ways. These feedback loops highlight how interconnected the system is—and how that interconnection can either help or hinder progress in closing the skilled workforce gap.

Process Reflection: Participant Perspective

“The workforce mapping process brought together leaders from across sectors and gave us a clearer picture of how our individual efforts fit into the larger workforce system. It reinforced that meaningful progress happens when employers, educators, nonprofits and public partners align around shared goals and work together to address common challenges and to better coordinate resources, communication and workforce pathways.”

—Brian F. Marsh, President and CEO, Goodwill Industries of Arkansas

Places to Intervene

Once the workforce development systems map was completed, we followed up with another exercise to identify where in the system one could intervene to move closer to the outcome of closing the skilled workforce gap. Workshop participants were asked to write down their ideas and score each idea on its feasibility and impact. These ideas were written on Post-it notes and placed on the systems map, exactly where participants thought they would effect change.

Scoring each idea across the feasibility and impact spectrum resulted in the matrix shown in Figure 8. The matrix has four labeled quadrants. Ideas in the high-impact, high-feasibility quadrant are rare and therefore referred to as “unicorns.” Ideas in the low-impact, high-feasibility quadrant are referred to as “low-hanging fruit.” These ideas may not close the skills gap much, but they are easy to implement. They could be good as short-term strategies, or when stakeholders need an easy win to build momentum.

Ideas in the low-impact, low-feasibility quadrant are referred to as “resource-wasters” because they don’t move the needle and are difficult to implement. Ideas in the high-impact, low-feasibility quadrant are “long-term strategies.” These ideas address difficult problems, but if they are solved, they could have a significant impact on the skills gap.

Participants organized their ideas into these categories; there were none in the resource-wasters or low-hanging fruit quadrants.

High Impact, High Feasibility (Unicorns)

• Retaining the skilled workforce is crucial, especially after extensive training. This idea is feasible because some stakeholders already are implementing it. For instance, contracts after training often require workers to remain in a region or with an employer for about two years post-graduation.
• Coordinating public-private partnerships is central to many virtuous cycles. It facilitates increased training capacity and more-effective programs and fosters a policy environment that better supports workforce development.
• Increasing training capacity would undoubtedly have a positive effect on the skills gap. However, this idea falls on the lower end of high feasibility because of the time required to design and implement such programs. Additionally, it may require significant investment, which is not easily obtainable.
• Building more platforms to connect people with resources stemmed from conversations around communication to increase access to training. Participants agreed that Arkansas’ program, called Launch, could have significant impact by providing information for both employers and job seekers.
• Promoting training opportunities would increase access to programs. A lack of funding specifically for marketing purposes was the biggest challenge in implementing this idea.

High Impact, Low Feasibility (Long-term Strategies)

• Increasing funding to support education and training capacity, as well as to foster public-private partnerships, was thought to be highly impactful. However, it was also seen as difficult to achieve and received lower feasibility scores.
• Improving access to childcare would affect both access to training and the size of the skilled workforce, which is why it received high impact scores. However, participants agreed that change in this area would require a significant amount of effort and resources.
• Supporting worker transportation would address an obstacle that hinders access to work and training. Although impactful, this idea was also considered a long-term strategy.
• Addressing benefits cliffs would create incentives for people to upskill and earn higher wages without affecting total household income inclusive of benefits. However, given that changes would require federal and state-level policy changes, this idea also was considered a long-term strategy.
• Addressing the state’s attractiveness relative to other places would reduce the rate at which skilled workers leave and would attract skilled workers from other areas. In addition to being resource-intensive, this idea could also have the unintended consequence of increasing the cost of living.

At the conclusion of our workshops, we shared both the systems map and the idea matrix with participants to get feedback. The question to ask as we continue developing this systems map is: What might be missing that would explain key mechanisms which have a significant impact on closing the skilled workforce gap?

Conclusion

Most days, workforce development practitioners must spend time addressing immediate needs, which can leave little leeway to strategize and plan for the long term. Being able to conceptualize the underlying processes that result in urgent problems can provide an opportunity to think about how the system is designed and how it could be changed. More specifically, understanding these processes can assist in designing systems that improve the matching process between workers and employers, increase retention and raise productivity. Such systems benefit both workers and employers and contribute to economic growth.

The nature of complex systems, however, demands humility in our approach to understanding how they work. We assume you identified several processes that were missing from our analysis of mechanisms affecting the skilled workforce gap. The goal is to continue developing the systems map so it captures all essential mechanisms. However, it may be impossible to completely know all the underlying processes of a complex system. Even if we did, the result may be more overwhelming than useful. Imagine a map of a city with information about everything. You would hardly be able to see what you need to successfully navigate. Similarly, attempts to map the design of complex systems are focused on understanding specific problems rather than the whole system.

When we try to solve a problem from only one angle, we miss what’s sitting beneath the surface, making it impossible to connect all the dots. It is a variety of inattentional blindness, like focusing so hard on the ball in that well-watched video that you completely miss the gorilla walking through the scene. We often fixate on the problem we think is the issue, not the one the system is showing us. Our goal is for systems thinking to help you slow down, map what’s really happening and uncover what lies below the surface of your system. Give yourself time, space and grace, because complex systems don’t untangle quickly. But with patience and curiosity, their patterns become clearer.