Pay for Skills Programs

Last Updated 05/23/2025
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Some private and public sector employers are adopting internal Pay for Skills programs. A key element of these programs is to incentivize skill development among employees through internal training. Such systems typically provide pay raises for mastering new skills which are determined based on the needs of the company.  Employees are often required to pass a series of written and hands-on tests that cover a set of skills and training related to quality, safety, company policy, and technical aspects of their job. If an employee scores above a specified level established by the company, they may earn a designated pay raise and move to the next level. Many companies develop their internal training and promotion systems and partner with local educational institutions.

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