This report explores how private sector employers are reacting to, responding to, and participating in welfare-to-work (WTW) efforts. Chapter 1 explains the study background and approach. Chapter 2 examines the environment, perspectives, experiences, and role of business in the WTW process and presents findings about employment patterns of welfare recipients. Chapter 3 describes 10 strategies for more effectively connecting WTW policies and activities with the labor market. These strategies rely on the private sector to govern, direct, organize, and deliver WTW services to varying degrees and include efforts to assist and finance private firms in hiring and employment of welfare recipients. Some encompass ideas of engaging the private sector in efforts to employ welfare recipients; others are interventions designed to assist the private sector in obtaining viable entry-level workers. The chapter also summarizes profiled program initiatives. Chapter 4 explores, at the program level, key issues of design, development, and operational experience and puts them in a larger policy context by examining economic, social, and political concerns raised by these initiatives. Chapter 5 presents lessons state and local policymakers should consider as they advance WTW efforts. They are directed at engaging the private sector, implementing effective initiatives, and establishing a WTW system that understands and connects to the labor market. The report contains 84 endnotes. (YLB)