The newly renamed and reorganized Alabama Department of Workforce (ADOW) is starting the year with a strategic plan to enlarge and develop the state’s workforce as part of ongoing efforts to foster the health of Alabama’s economy.
Led by ADOW Secretary Greg Reed, who stepped down as Senate president pro tempore to take the position Jan. 1, 2025, the agency has undergone a transformation since the Department of Labor officially became the Department of Workforce last Feb. 1.
Since then, the agency has been reinvented to streamline the state’s workforce development efforts. “Now we are a repository for all things workforce for job seekers and employers,” Reed says. “We have begun marketing what the new department has to offer. Our ultimate goal is for Alabama to have one of the best-trained, highest-educated workforces in the country.”
The department’s overhaul is part of the bipartisan Working for Alabama package of six key bills, signed into law by Gov. Kay Ivey in May of 2024. One of the new laws, the Alabama Workforce Transformation Act, called for the department’s changes.
“The government has meant well but being well organized and moving quickly is not what it’s best known for,” Reed says. “Our consolidation is designed to make sure we are all working in concert with a strategic plan.”
As part of the changeover, several workforce development programs and related staff from the Department of Commerce (ADOC) were transferred into ADOW. Among additional changes, ADOW took on the responsibility of administering the Alabama Workforce Board with oversight and guidance from an executive committee. The committee also will work with the secretary on the state plan for federally funded Workforce Innovation and Opportunity Act programs.
“Our focus, our role is to promote workforce growth and collaborative education as well as engaging stakeholders,” Reed says.
Last year Reed led the transfer of 450 of the department’s 850 employees from four Montgomery locations to one central location. The department’s other 400 employees are assigned to 59 offices in 57 counties. Legal requirements had to be fulfilled so that federally funded programs could be moved from the ADC to ADOW. “We had a busy year,” he says. “I really appreciated how my fantastic staff came together and were willing to do things in a different way.”
Following the consolidation, the only state-run workforce training now not under ADOW is the Alabama Industrial Development Training program, which provides job-specific training packages for new and expanding businesses as part of ADC’s economic development mission. “This has been the largest reorganization and consolidation in the state since legislation required the consolidation of all law enforcement to ALEA (Alabama Law Enforcement Agency),” Reed says.
ADOW continues its legacy role in overseeing mining and reclamation, including its Abandoned Mine Land Economic Revitalization Program, which provides federal funding to help transform abandoned mine lands for economic development, community and environmental uses. “As I represented the 5th District during my tenure in the Senate, I was well versed in the program,” Reed says.
Before the creation of ADOW, the state had supported numerous helpful workforce development programs, but there was neither a coordinated effort nor an overall plan for growing the workforce, Reed says. That left significant gaps in the availability of skilled workers for employment in some industries. “It’s been a business challenge in Alabama to get the right number of workers with the right skill sets to support our economy,” he says.
Part of the workforce shortfall is Alabama’s low workforce participation rate. While Alabama is ranked highly nationally for its business-friendly environment attractive to investment and development, the percentage of adults who participate in the workforce or are looking for a job is lower than most other states. That could put a damper on the state’s economic health over time, Reed says. “A lot of good things have been going on for Alabama’s economy, but it could be a lot better if we could get more people participating,” he says. “All hands on deck.”
On the positive side, Alabama was ranked No. 8 in the nation overall in Area Development Magazine’s 2025 Top States for Doing Business Report. The state notably ranked among the top four states in the 2025 report for individual economic development indicators like favorable property tax rate, overall cost of doing business, favorable regulatory framework and business incentive programs. Alabama typically ranks as one of the top 10 states for business annually.
The opposite is true for Alabama’s workforce participation statistics. The state’s seasonally adjusted labor force participation rate was at about 57.7% of adults for August, according to the Federal Reserve Bank report. By comparison, the District of Columbia had a participation rate of 71.6%. “Labor force participation rates are down across the country in general, but we have more of a problem here,” Reed says. “We have a low unemployment rate but there’s also a low participation rate.”
Alabama’s low participation rate is caused by several factors, according to a gap analysis study, Reed says. He points to would-be-worker challenges, in addition to education and training needs, such as lack of affordable childcare and housing and lack of reliable transportation. Working for Alabama childcare and housing expansion tax credits could help over time, Reed says. The state also is looking at ride-to-work programs, and some businesses are offering transportation subsidies.
“For those who want to get ahead, we say let us help you access programs that can make that possible,” Reed says. “We want to identify and recruit the underemployed who are looking for a better opportunity.”
For example, one state workforce program seeks to place those willing to take six weeks of training to become a Certified Nursing Assistant with the incentive that their new employer will help them get the training they need to become a nurse. A variety of apprenticeships are available that can help workers who must “learn and earn” at the same time, Reed says.
The department is reaching out to high school students by enlisting career coaches in high schools to help students that don’t understand the workplace. Industry partners like trade unions are encouraged to speak to students about job opportunities in their fields. Students are being allowed to serve as industrial apprentices in applied skills like welding and pipe fitting four months a year during high school to get a jump on a good-paying career, Reed points out.
Reed stepped down as Senate president pro tempore to assume his current position Jan. 1 of last year at the request of Governor Ivey. Reed says he gladly took the lead in overseeing the reinvention of the agency. “My serving in this role is a great fit as I have cosponsored a lot of workforce legislation during my 14-year tenure in the Senate,” says Reed. “I consider my work in job recruiting and development as the hallmark of my Senate service,” he says.
The former Republican Senator served as the legislative leader in the Working for Alabama bill package and sponsored the Alabama Growth Alliance Act. The alliance is designed to serve as the state’s advisory council for long-term economic and workforce development plans.
Kathy Hagood and Art Meripol are freelance contributors to Business Alabama. Both are based in Hoover.
This article appears in the January 2026 issue of Business Alabama.
