This paper provides an overview of the issues and challenges facing postsecondary education in workforce development in the states. Key questions of employer, learner, and government and public expectations are listed as a suggested starting point for discussions between state, education, and business leaders about strategies for addressing these challenges. Employers, learners, and the public are seen as placing increasing demands and expectations on colleges and universities to do a better job preparing the workforce. The role of higher education in workforce development is examined, using employer, learner, and public expectations as a basis; the kinds of responses that colleges and universities must offer in return are addressed. Employers are placing increasing demand for basic education skills, such as in mathematics and communication, and basic workplace skills, such as teamworking, interpersonal relations, and leadership. Expectations of learners are aligning themselves with the employer needs, especially among older, non-traditional students. As learners and employers seek more flexibility and access to education and training, institutions must respond with new instructional delivery systems, including teacher preparation and professional development, based on public need and demand. Coordination across federal, state, and public needs is the key to an effective workforce development system and the changes that this will bring to the current educational systems. (Contains 17 reference notes.) (NAV)