Aerospace and Defense Industry’s Demand for Talent Outpaces Supply

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By Derrick Ryskamp

Regional Director of Business Development

The aerospace and defense (A&D) industry designs, manufactures, and services some of the world’s most complex machinery—airplanes, spacecrafts, satellites, ships, submarines, and a variety of other electronics and equipment used in military and commercial settings.

A&D companies not only play a major role in our national defense and global security but also drive important economic activity. In 2020, the aerospace and defense industry contributed approximately $382 billion to total U.S. gross domestic product (GDP), with sales accounting for nearly 20 percent of all non-food manufacturing revenue nationwide.

Like many industries, A&D was hit hard by COVID-19. Commercial air travel was one of the services most directly and immediately affected, while large-scale supply chain disruptions made it difficult for the defense sector to fulfill existing contracts. Between 2019 and 2020, total industry revenues dropped by 2.8 percent, according to the Aerospace Industries Association (AIA).

Despite these challenges, the industry has begun to recover, albeit slowly. Revenues increased in 2021, but A&D still has a long way to go before returning to pre-pandemic levels of performance and growth.

Moving forward, many factors will contribute to the industry’s success, but chief among them is the ability to recruit and retain highly qualified workers—and quickly. Given today’s competitive job market, that’s no simple task.

The aerospace and defense workforce today

Today the aerospace and defense industry supports nearly 2 million jobs across the United States, with the highest concentrations of workers in California, Washington, Texas, Connecticut, Arizona, Florida, Ohio, Kansas, Georgia, and Virginia.

Roles include mechanical engineers, electrical engineers, aircraft designers, flight inspectors, quality assurance engineers, program managers, research scientists, systems administrators, intelligence analysts, and test engineers, among others.

Industry compensation is significantly higher—about 41 percent—than the national average. In 2020, aerospace workers averaged roughly $104,577 in pay and benefits, per the AIA.

And, although the A&D workforce is less diverse than the U.S. labor force as a whole, in recent years the industry has started to see more representation of Black and women employees at the executive level.

A competitive talent market means employers must stand out

Aerospace and defense employers had to make sweeping changes in response to the pandemic—and for most, it wasn’t as easy as implementing a companywide, work-from-home policy. While some A&D workers were able to do their jobs virtually, many others were considered essential employees and still needed to be onsite.

Even as companies have welcomed employees back to the office, many remain mindful that flexible work arrangements are here to stay—and that the talent market now is very different than it was just a few years ago.

To secure the workforce they need, A&D employers need to offer more than just remote or hybrid work schedules. Instead, they need to go above and beyond to separate themselves from their competition.

Researchers conducted a 2021 study of the A&D workforce and concluded that a differentiated and compelling employee value proposition is critical to attracting, retaining, and developing top talent.

Related: How to Develop a Compelling Employee Value Proposition

Related: The Importance of a Strong Employee Value Proposition with Examples

In general, companies seem to be aligned on the standard benefits they offer—things like employee recognition, career development opportunities, and tuition reimbursements. The way employers can truly set themselves apart, researchers say, is by creating a culture that fosters the things that top talent values: employee connection and continuous learning.

Related: What Organizations Can Do to Retain Talent and Reduce Turnover During the Great Resignation

What employers want

We’ve heard a lot about the new and changing demands of candidates and employees, but what employers want is evolving, too.

As the industry continues its transition from hardware to software, demand for digital talent is quickly outpacing supply—and in a highly competitive job market that pits aerospace and defense against big tech companies, A&D is coming up short. Approximately 50,000 positions sector-wide remain unfilled, according to a 2022 McKinsey report, and the overwhelming majority are in technology.

For employers to get what they want, they must adapt to the preferences of their prospective employees. Creating an organizational culture that incorporates workers’ values—purpose, flexibility, collaboration, inclusion—won’t happen overnight, but A&D companies must shift in that direction if they don’t want to fall further behind.

As we move beyond the pandemic, the aerospace and defense industry is well positioned to continue its upward trajectory. But it needs a robust and highly qualified workforce to make it happen.

This blog was written by Acara Director of Enterprise Sales Derrick Ryskamp.