Podcast: The Vanishing Aerospace Workforce

Demand has come back, but a lot of workers haven't. Listen in to hear what that means for commercial aviation, defense and MRO as Aviation Week editors are joined by special guest Todd Tuthill, vice president of aerospace and defense at Siemens Digital Industries Software.

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Rush Transcript

Joe Anselmo: 

Welcome to this week's Check 6 podcast. I'm Joe Anselmo, editorial director for Aviation Week and editor-in-chief of Aviation Week & Space Technology magazine.

A funny thing happened during the COVID-19 pandemic. A lot of talented workers left the aerospace industry -- and they never came back. The effects of the shortage are most evident in supply chain, but it's being felt everywhere from maintenance technicians to engineers needed to work on top secret military projects. So where is the workforce shortage most acute, and is there any hope of fixing it?

Here to break this all down, our two Aviation Week editors, Michael Bruno is executive editor for business, and Lindsay Bjerregaard is managing editor for maintenance repair and overhaul. They're joined by a special guest, Todd Tuthill, who is vice president of aerospace and defense strategy at Siemens and a longtime veteran of the defense industry. Michael, let's start with you. Set the table for us. What's going on here with this workforce problem?

Michael Bruno: 

So we're in this amazing situation. To come at it from a 60,000 foot view, I think three years after the onset of COVID-19, nobody really would've thought that workforce would be about the most enduring challenge that would come out of it for industry. You could have expected demand pressure, nobody would want to fly again. You could have expected nobody would show up in a factory to build aircraft. You would expect nobody wanted to buy them. You could expect nobody wanted to finance them, but workers in general, nobody wanted to work or you couldn't find enough workers in a growing population? That one seemed hard to imagine at the time, but that's exactly where we are.

 It's hard to know exactly how many workers have left the industry, partly because not all the layoffs and downsizings get reported, and frankly, not everybody wants to admit how much their company is smaller compared to pre-pandemic, but we know for a fact that it's smaller. The trade associations have all said so, they've reported about how attrition rates have nearly doubled. At one point in the past couple of years, the attrition rates within aerospace and defense were double digits. Now they're down, quote unquote, down to about 7%, but that's still about twice as high as they were before the pandemic.

You had the Great Resignation play out in this industry just like it has everywhere else. If you're not familiar with the term Great Resignation, it's essentially this movement of people deciding that whatever job they were in at the time just wasn't satisfying or wasn't good enough for them as a worker and they've moved on. And in aerospace and defense, this has hit us particularly hard because even before the pandemic, this industry was struggling to attract talent. Now, having said all that, and I know we're going to get to this in a few minutes as we talk with Todd and Lindsay, but we're hearing some sort of anecdotal evidence that things might be getting better. I would think actually they're getting less bad, but it's debatable about whether there are enough workers. It is not debatable about whether there's going to be an ongoing challenge. There is going to be for this industry.

Joe Anselmo:    

Todd, Michael and I got to spend some time with you recently when you were visiting Washington, and one of the things you told me that really struck me was that the workforce challenge or the problem is four to five times worse in defense than it is in civil aviation. Why is that?

Todd Tuthill:     

Thank you, Joe. Great question and it's good to join you on the podcast today. I'm glad to be here. There's a number of things that add up to this. The first thing I think I look at is, I'll call it the perfect storm. I've been in aerospace, as you said, for more than 30 years, and there's a unique thing going on that I've never seen before in my career. If we look at the outlook over the next five years for commercial aerospace and growth and defense aerospace growth, it's up in both sectors for the next five years. I've never seen that before. There's just a lot of money coming in to aerospace, a lot of things going on, coming together. And while that's true on the commercial side, you've talked a lot in your magazine and on your podcast about the growth in Airbus and Boeing commercially.

The real growth right now is going on in defense, and I think that if you look at the money, part of that number four to five times is there's about four to five times more spending, I think, that we're going to see in the next five years in procurement and defense than there is an aerospace. So that's one aspect. Michael talked about a lot of the attrition, a lot of the other things and the struggle to find new engineers, but another key factor is there's a much higher bar relative to bringing engineers into defense companies versus commercial companies. And that higher bar involves security clearances. And I did a little research yesterday. I just went out to the websites of about seven or eight of the large companies that do defense and do commercial in both the US and Europe and I just did a look at their job sites and of these eight companies there were about 11,000 engineering jobs open right now listed on their websites.

And then I took a list. How many of those require clearances? And it's about three out of every four jobs required clearance. So about 70, more than 70% of those jobs require clearances. I didn't just look at the Lockheeds and the Northrops, but I added Raytheon Technologies. I added Airbus into the mix as well and that kind of matches what would he expect when we look at the outlook for defense and commercials.

So it's this bar, this need to have a clearance. It is in large part we're seeing that in the US, but we're seeing that in Europe and Australia and in other parts of the world too, that given countries working on defense projects in their particular city or their particular country, need people from that country, citizens of that country that are willing to submit to the whole process of obtaining a clearance, and then to an extent change the way they live their lives so that they can be trusted with that material. So that is a big part of why I brought that up.

Joe Anselmo:     

 And Todd, for our listeners that might not be familiar with what it takes to get a security clearance, how involved is the process? Who can't get a security clearance?

Todd Tuthill:     

Rules kind of vary by country, but I'll speak at a high level about the United States. But to obtain a clearance in the United States, number one, you need to be a citizen generally of the United States. You don't have to be born here, for the initial levels of clearances, but as you go further up in the clearance level, generally that's true. And you've got to fill out quite a bit of paperwork, give the government information that not everyone's willing to give the government right now. And then once you've qualified for that clearance, there may be other things you have to submit to up to and including a polygraph for that clearance. And then as you maintain access to this information, there's a bunch of things you've got to agree to do in terms of make the government aware of who you are in contact with and where you travel. And it's just a level of scrutiny that quite frankly, not everyone in this day and age is willing to submit to.

Joe Anselmo:    

Lindsay, you've been writing about workforce for years, certainly before the COVID pandemic, but it's still an issue. How does it compare today compared to before COVID?

Lindsay Bjerregaard    

Well, I think if you ask any M1`RO provider, they would tell you workforce was a problem pre-pandemic, and it's only been exacerbated. At our recent events, we've been hearing MROs telling us that they're literally having to turn away work because they don't have enough labor.

 So to kind of put it into context, Boeing releases their pilot and technician outlook every year that forecast the different workforce needs over the next decade. And they believe that the industry is going to need 610,000 new maintenance technicians over the next decade. However, we're not coming close to meeting that. So for instance, there's a big age problem. The Aviation Technician Education Council or ATEC reported that last year the average age of an FAA mechanic was 53 years old, which is 11 years older than the median age for a US worker. So there were already a lot of retirements happening, and then a lot of those accelerated during the pandemic.

AeroProfessional, which is an aviation recruitment consultancy based in the UK. also just released a study that says 27% of the aircraft engineering workforce is set to retire in the next decade. And then 45% from that survey said they're considering moving to another industry. So there's a lot of competition from other industries that are poaching talent. MROs tell us that they're getting a lot of competition from IT companies, from logistics, oil and gas, even companies like Disney really like those skillsets that maintenance technicians have.

And then on top of all of that, considering the older age of the workforce and the retirements, and this is something that Boeing highlighted in the report, there's a juniority issue. So the more we're adding younger technicians to the workforce with less skill sets, the greater a problem this is happening. For instance at MRO Americas our big MRO event in April, we heard from a lot of MROs who said that this juniority problem is causing a skills gap. So one airline said that a maintenance vendor supplied them with two junior level technicians to deal with an issue. And they said that those two technicians combined had only had their airframe and powerplant licenses for 60 total days.

And these companies are investing a lot of time, a lot of money and effort into recruiting and training these new technicians, but the reporting issues with attrition, professionalism, soft skills, and even things like these new technicians not being well versed enough in basic maintenance skills. And speaking of the soft skills, ATEC also released a survey that said that nearly 79% of respondents said that these younger workers are experiencing soft skills problems. So, there's a lot of initiatives happening in the industry to try to recruit these new technicians. However, the fact that we've got so many older experienced technicians with their senior knowledge leaving, being replaced by these new technicians that really only have maybe a year or two of experience is just causing a lot of problems. So it's a big problem and it's only getting worse.

Joe Anselmo:       

And what geographic footprint are you talking about here? Are you talking about just the United States or...

Lindsay Bjerregaard: 

All over the place. So specific examples that I gave were from the US, but Boeing's report says that the greatest number of technicians are going to be needed actually in the Asia-Pacific region. So 250,000, which is about just over 40%. It's a really big growing MRO industry compared to everywhere else in the world and then followed by Asia it's going to be North America, Europe, and the Middle East, which need the most technicians. So it's a big issue everywhere else and some of the other regions are having less trouble hiring technicians specifically because they have greater ability to hire internationally.

So a lot of the MROs in the US are experiencing issues with that because they're not getting enough applicants for their jobs, and it's not as easy for them to bring in technicians from abroad just based on workforce regulations in the US compared to, for instance, an airline in the Middle East. I think one of our panelists was bringing up Emirates as an example that they said a pretty big proportion of their workforce it's actually from outside the UAE. So they're able to bring in that talent from international countries.

Joe Anselmo:          

 Todd, we see in the news every day about China and the rise of the Chinese military and their capabilities. Is this workforce shortage in the United States a threat to national security?

Todd Tuthill:           

I don't know if I'm going to call it a threat to national security. I don't know that it'll go that far. I think it's something as we talk about several issues that affect the defense industrial base, it's something we should be concerned about. It's something we should look at. I don't know if I would rise it to the level of threat, but it's certainly something we should be concerned about.

Joe Anselmo:         

And Michael, what do you see companies doing? You said things are getting less bad. What's making them less bad?

Michael Bruno:    

Mostly it's things out of their control that they're finally benefiting from. I'm talking about macroeconomic factors. There's a general, very slight slowdown in the economy. We can debate whether there's a recession happening either now or in the future. But the fact that things are not as rip roaring as they were a year after the onset of the pandemic when everybody was home with leisure time and turns out extra money in their pocket, in part sparking the great resignation. So, the companies are enjoying the fact that there's been a slowdown in the economy. The tech sector has been laying people off, not to as large a degree, I think, as headlines would lead you to believe, but there are layoffs there happening. But then again, I'd like to remind this audience, there are layoffs happening right now in aerospace and defense, and it's not just at the Virgin Orbits, which have gone out of business, it's Boeing too. They're tweaking their workforces all at the same time. They just don't want to promote it because generally they're still trying to attract talent.

So companies are moderating their workforces. They're also learning to live with less. They're learning they can use technology more. They finally need to invest in many of the technologies, whether it's AI or virtual reality or just Teams, Microsoft Teams and Zoom and doing calls online. And they're being able to use technology to leverage that workforce gap. And so there are a lot of things that are starting to help companies get over it. At the same time there's still a big demand in this industry. Todd touched on that. Nobody can remember a time when both defense, commercial, oh and BizAv and MRO are all peaking at the same time. You have commercial space still skyrocketing, pardon the pun, but it's still going gangbusters and everybody's trying to hire all at the same time.

So it's generally a good news story. Now having said that, I do want to point out a couple of things here. And both Todd and Lindsay hit these really, really well. There have been some long-running enduring challenges that this industry has faced, and we're now seeing them come together in sort of this perfect storm, as Todd talked about that's making it challenging going forward. We always knew the baby boomers were going to retire, and we'd always feared they might suddenly all retire at once. But we went about two decades without that happening, and we kind of got used to it not happening. Suddenly it's happening. At the same time you have a much younger set of generations. It's not just Gen X, Gen Y, Gen Z, there's all of them put together and then the future generations coming into the workforce at the same time. And they have very different expectations and criteria for where they want to work and how they want to work. And that's a very challenging prospect for a slow moving industry like aerospace and defense, slow moving when it comes to workforce.

And then finally, this industry has always had a boogeyman, frankly, that it was competing against, whether it was technology and Facebook and Amazons most recently. Before that it was Wall Street and the financial companies. Before Wall Street it was oil and gas companies. There's always someone out there trying to compete for the same talent pool that we are, and now all of them are struggling just as much or more as we are, and it just makes it that much more of a contentious situation. So things are getting less bad, but these challenges are going to be around for a while.

Joe Anselmo:     

Todd, at Aviation Week, editors get around quite a bit to universities talking with students and the one thing that strikes me is a lot of these aerospace engineering students are not even US citizens. There's a lot of Chinese nationals doing this who obviously couldn't qualify for a security clearance. But some of the students tell us that pay is an issue, that they just don't see aerospace and defense being as attractive in pay as maybe going to Silicon Valley to a startup and getting options and that sort of thing, and the potential of being a millionaire by the time they're 30. Does the industry need to pay more?

Todd Tuthill:       

Certainly that's an option, for the industry to pay more. I look at aerospace and defense and careers in general, and there's a lot of things that contribute to why you want to choose one career over another. Work-life balance can be one of them. We talk about Silicon Valley companies. In my career I've interviewed people who've worked for companies like SpaceX, companies like Apple, and they've talked about the work-life balance that you see at those kind of higher tech companies and they're not quite like the work-life balance you see in aerospace companies. So I think that's part of it to consider as well.

There's also just the cool factor. I can't tell you what it's like to stand at an air show and watch something you designed blow over your head. So, I think in the aerospace industry, we need to talk about all the aspects of a career. Certainly money's a consideration, but I think there's a lot more than just money to consider. And that's something in the aerospace industry we need to talk about. Because even if we trying to pay people more is many times losing battle because where does it stop? So certainly we can look at salary, but I think we need to look at several other aspects of what we do and how we do it, work-life balance as well as quite frankly, the working environment in aerospace companies.

Michael kind of touched on it a bit in terms of technology, and I agree with Michael. There are things we can certainly do technology-wise to deal with the fact that we're having trouble recruiting candidates to aerospace companies. We can use technology, artificial intelligence, generative design, those kind of things. The phrase I like to use a lot in companies is we want to automate mundane things and we want to take away the need for engineers to do mundane things and let them focus on the things they went to school to study, to be creative, to be innovative, to make critical decisions. And we need to change the atmosphere in aerospace so that engineers are focusing on those tasks and not so much the mundane task of finding things and looking for things.

Joe Anselmo:           

Well, we're running short on time, but Lindsay, I wanted you to take us to the finish line. The good news is that you said that companies in the aftermarket are aware of the problem. Are you confident that they are doing enough to solve it?

Lindsay Bjerregaard

 That's a loaded question. I certainly know that there are a ton of different initiatives out there to try to recruit new workforce. Everything from companies partnering with schools on scholarships and apprenticeships, on the job training, getting into the schools at a younger age to expose these kids to new careers. There's a nonprofit here in the US called Choose Aerospace that's trying to bring Part 147 maintenance curriculum into high schools to start getting those kids an early start on their education. There's MRO providers working with airlines on what they call flow through programs, where they'll start out at that MRO and then after a certain number of years they get a guaranteed job interview and opportunity to potentially go work at an airline, which is considered more glamorous. On the defense side, there's a lot of different initiatives to try to transition military veterans over to the MRO workforce, all these various skill bridge programs, diversity initiatives, programs to bring in international talent so they're certainly working on it.

And then I would love to touch on just a couple of things that Michael and Todd mentioned. So I'll start with the bad and end with the good. Regarding pay, definitely that seems to be an issue within MRO. That AeroProfessional study that I mentioned, 56% of the respondents said that they didn't feel they were getting paid enough for the job expectations, and this is specifically an MRO. However, there's only so much that can be done to address that and I do know that there are certain maintenance providers who are trying to continue to raise their pay to make sure that it's competitive.

On the technology side, which is the positive, that technology is, like Todd said, helping to free up workers for less of the repetitive, boring, dirty, dangerous work. So that's good. And the technology's being used to help train a lot of these younger workers. There's a lot of initiatives, at least within MRO for augmented and virtual reality where they can work with a remote expert and that remote expert could be sitting at home. He doesn't have to be in the hangar. So that can help with some of that work-life balance as well and some of these expectations we got during the pandemic where people expect to have a little bit more flexibility about where and when they work. So it's difficult, but I think the industry is doing a lot to try to fix this, and hopefully we will see some progress here.

Joe Anselmo: 

And I like how you ended it on a positive note. Thanks for that. Lindsay, thanks for joining us today. Michael, thank you and Todd, a special thanks to you for taking the time to share your insights with our listeners. That is a wrap for this week's Check 6 podcast. A special thanks to our podcast editor in London, Guy Ferneyhough.

The Paris Air Show kicks off on June 16th and Aviation Week will have a big team of editors and data analysts on the ground at Le Bourget. And you can get up-to-the-minute updates of everything going on at the show on your mobile phone on our new Aviation Week app. Go to aviationweek.com/app to download the new app. That's aviationweek.com/app. Thank you for your time and have a great week.

Joe Anselmo

Joe Anselmo has been Editorial Director of the Aviation Week Network and Editor-in-Chief of Aviation Week & Space Technology since 2013. Based in Washington, D.C., he directs a team of more than two dozen aerospace journalists across the U.S., Europe and Asia-Pacific.

Michael Bruno

Based in Washington, Michael Bruno is Aviation Week Network’s Executive Editor for Business. He oversees coverage of aviation, aerospace and defense businesses, supply chains and related issues.

Lindsay Bjerregaard

Lindsay Bjerregaard is managing editor for Aviation Week’s MRO portfolio. Her coverage focuses on MRO technology, workforce, and product and service news for AviationWeek.com, Aviation Week Marketplace and Inside MRO.