Recent labor market and economic trends have spotlighted the need for work force development systems and policies to simultaneously serve employers seeking qualified workers and individuals who want to find work and advance toward self-sufficiency. This need has in turn led to the development of labor market intermediaries that can perform a wide range of functions, including organizing, convening, brokering, and providing services to employers. The recent expansion of labor market intermediaries is being driven by changes in labor markets and the macroeconomy, new directions in social and employment policy, and lessons from past welfare and work force programs. The three priorities of local labor market intermediaries are as follows: improving the job matching process; increasing work force quality; and changing employer behavior (improving job quality, firm productivity, and training opportunities within firms). The types of organizations performing intermediary functions include agencies in the public sector, community-based organizations, employer associations, unions, community colleges, and multisector collaborations. Eight characteristics of effective intermediaries have been identified along with seven recommendations for good practice. The following case studies are appended: "Chrysalis" (Dorie Seavey); "Wildcat Service Corporation and the Private Industry Partnership" (Jonathan Schlefer); and "WIRE-Net and the Hire Locally Program" (Patricia Ma, Tony Proscio). (Contains 15 endnotes.) (MN)