Aerospace and defense continues to be one of the most dynamic and important industries. Yet A&D’s contributions are often understated, whether as a result of the nature of the work itself or the industry’s subdued communications strategy. Unfortunately, this lack of public awareness often leads to workforce recruiting and retention challenges.

I recently had an opportunity to discuss workforce issues with some of the industry’s top executives. They talked about possible ways to recruit the next generation of talent, maintain the industry as a great place to work, retain employees—especially in light of increasing employee mobility—and ensure the transfer of knowledge as older employees retire while communicating the tremendous contributions the industry makes, both in terms of security and improving our overall standard of living. These concerns were echoed throughout the industry, from primes as well as their suppliers.

Recruiting remains highly competitive for both A&D and other industries. This competition for talent extends from traditional A&D disciplines—such as mechanical, electrical and aerospace engineering—to emerging critical skill sets in fields such as data science, cognitive computing/artificial intelligence/machine learning, cybersecurity, materials science and advanced manufacturing. The emergence of these newer skills is driven, in part, by the convergence of information and digital systems and their integration with traditional physical systems (e.g., aircraft, land vehicles, and seacraft) at an unprecedented pace.

The confluence of physical and digital components is also reshaping the role of systems engineers. In many cases, requirements are not simply being cascaded from customers to primes to lower tiers of the supply base. Systems engineers have to integrate requirements from multiple places while balancing other increasingly important pressures such as delivering cost-competitive solutions in accelerated time frames. 

This demand for specialized talent is growing, and A&D must compete with other industries. For example, both A&D and industrial companies need skills related to automation, data science and advanced manufacturing. One recruiting strategy being used is to focus on potential hires desiring to stay in a local region aligned with the company’s location.

In the fight for talent, A&D companies face industry-specific challenges such as the need to find employees who can obtain security clearances. Another challenge is retaining employees as workforce mobility increases. In the past, A&D employees had incentives—such as defined-benefit retirement packages—to remain with an employer. But as these “golden handcuffs” are replaced by primarily employee-funded retirement savings plans, the industry must develop new approaches to retention. For A&D, the attrition rate for new employees is just over 10% for the 0-5-year employee versus well over 20% for high-tech employees in general. The low rate for new A&D employees is still much higher than for the industry as a whole, at 4%.

The retention challenge in A&D is further complicated by the proportion of employees on either side of age 45. In A&D, approximately 42% of the workforce is under age 45. That is lower than the data for the overall U.S. workforce, where approximately 56% of all workers are under age 45, according to U.S. Bureau of Labor Statistics for 2016.

With better than 50% of the workforce over age 45, the age demographic mix is lopsided and, coupled with increased labor mobility, could pose serious risks to the industry, or at least to those companies that do not mitigate those risks with employee-retention and succession planning. With retirement rates creeping up, such succession planning is a critical element in managing the workforce. Many companies have formal succession processes in place, but others are still approaching it in an ad hoc manner. In either case, effective succession planning should include leaders and management as well as technical employees—especially critical (“we cannot lose”) employees.

With an eye toward the long game, industry executives are calling for an industry-wide campaign focusing on two fronts: education and marketing. They are promoting the importance of STEM (science, technology, engineering, and mathematics) programs and introducing future engineers to A&D, starting in early grades (long before college).

Executives also noted the need for a marketing campaign that highlights the global impact of A&D—from security to connecting people around the world, both physically (through airplanes) and virtually (through data and networks). These examples reflect the dynamic nature of this industry, its importance to the world and the very foundational and innovative nature that will help it prevail against workforce challenges. 

Jim Adams is a specialist in aerospace and defense at PricewaterhouseCoopers.