
Aerospace and Defense Industry’s Demand for Talent Outpaces Supply
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 other electronics and equipment used in military and commercial settings.
The A&D industry continues to face significant challenges in meeting its growing demand for talent. As the sector expands and evolves, the need for skilled professionals is outpacing the available workforce, creating a critical talent gap that threatens to impede industry growth and innovation.
Industry Overview
In 2023, the A&D industry saw a resurgence, with revenues reaching $829 billion, an 11 percent increase from the previous year. However, production constraints due to supply chain issues and talent shortages prevented the sector from reaching its full potential. The industry currently supports over 2.2 million jobs across the United States, which represents 1.4% of the U.S. employment base.
The Talent Gap
The A&D sector is grappling with a severe talent shortage that spans various roles and skill sets:
- Aging Workforce: 25 percent of the workforce at or beyond retirement age, retirements worsen talent gaps by depleting institutional knowledge.
- Skills Mismatch: The growing demand for workers skilled in AI, cybersecurity, and advanced manufacturing is outpacing supply, with 75 percent of companies struggling to find qualified talent and 40% of adults lacking basic digital skills.
- Security Clearance Requirements: The number of jobs requiring security clearance has increased by almost 1,000 percent since 2014, while the number of qualified candidates has risen by less than 10 percent.
- Increased Turnover: Employee turnover in the A&D industry was 13 percent in 2023 (excluding retirement), which is much higher than the U.S. rate of 3.8 percent.
Factors Contributing to the Shortage
Several factors are exacerbating the talent shortage in the A&D industry:
- Rapid Technological Advancements: The industry’s shift towards digital solutions requires a workforce adept in new technologies such as artificial intelligence, cybersecurity, and advanced manufacturing.
- Educational Challenges: There is a shortage of students pursuing STEM fields, which are crucial for the A&D sector.
- Global Competition: The A&D sector faces stiff competition from other high-tech industries for the same pool of skilled workers.
- Geopolitical Climate: Immigration challenges are widening the gap between talent demand and supply.
Impact on the Industry
The talent shortage is having profound effects on the A&D sector:
- Slowed Innovation: Lack of skilled workers is delaying research and development efforts, potentially stagnating technological advancements.
- Production Delays: Shortages in skilled labor are affecting the industry’s ability to meet growing demands for commercial and military aircraft.
- Increased Costs: The competition for top-tier talent is driving up labor costs, impacting profitability and competitiveness.
Strategies to Address the Talent Shortage
To combat these challenges, A&D companies are implementing various strategies:
- Flexible Work Arrangements: Many firms have embraced alternative work schedules like 4/10 and 9/80 for both frontline and back-office employees.
- Enhanced Employee Value Proposition: Companies are focusing on creating a culture that fosters employee connection and continuous learning.
- Knowledge Transfer Programs: Implementing mentorship initiatives and cross-generational collaboration to ensure effective knowledge transfer.
- Skills-Based Hiring: Revising recruitment processes to focus on key skills and competencies rather than traditional qualifications.
- Investment in Education and Training: Partnering with educational institutions to offer STEM education and apprenticeships.
- Reskilling and Upskilling Programs: Developing existing talent to meet evolving industry needs.
As the A&D industry continues to evolve, addressing the talent shortage will be crucial for maintaining innovation, meeting production demands, and ensuring long-term success. By implementing comprehensive strategies to attract, develop, and retain skilled professionals, the industry can work towards bridging the talent gap and securing its future workforce.