The aerospace and defense industry is quickly transitioning to a younger workforce – which has implications for talent management, acquisition, and development – while it faces a pronounced talent shortage and intense competition.
The aerospace and defense sectors will compete with tech companies and start-ups in 2024 and beyond. In particular, the competition for high-demand roles, such as traditional and software engineers, is fierce amidst the global shortage of such talent across various industries.
Aside from the general competitiveness in attracting top talent, the aerospace and defense industry is also grappling with a long-anticipated wave of retirements among its older workforce. Approximately one-third of the current aerospace and defense workforce is aged 55 or older, posing a unique challenge for the industry.
These issues create complicated challenges, from the potential loss of institutionalized skills and knowledge to gaps in company operations due to a lack of personnel.
A&D companies must respond to these challenges with strategic adaptability. This includes showcasing culture and fostering career visibility, creating development and upskilling opportunities at scale, establishing flexible leadership and organizational mandates, and designing compelling compensation and employee benefits programs. These measures are crucial for ensuring long-term career growth and engagement in the evolving talent market.
The future of the industry is in the hands of a younger, inspired workforce.
The Transition
Since the COVID-19 pandemic, there has been a reported increase in the younger workforce that wishes to switch employers. Studies show that 46 percent of the younger workforce is open or thinking about changing jobs within the next three to six months.
As a result, talent replacement is an increasingly worrisome issue for many A&D employers. As the older generation retires, institutionalized knowledge and essential skills may be lost if companies don’t respond fast. In addition, there is already a shortage of skills, especially for employees skilled in data science, digital technology, engineering, and mathematics.
At the same time, mechanical and electrical engineering roles are outweighed by software opportunities, encouraging younger talent to switch to IT or software careers. There is also a disparity in compensation, as A&D companies pay software engineers as much as half what technology giants or start-ups would offer.
These caused a large turnover rate across the sector, with many roles requiring reassessment and redesign to incorporate more evolving responsibilities. Many employers have to rethink their workforce’s career paths and how to optimize them without completely burning out their employees.
Organizations may consider extending beyond traditional college degree members and seeking talent by including boot camps, community colleges, or previously unknown talent within the company. This is evident in the eight percent decline in the industry’s hiring of aerospace, mechanical, and aeronautical engineer graduates these past five years.
Employees are also looking at previously unknown talent already in their employee base. While thorough skills assessments, training, and in-depth career shaping may help stem some of the effects of the shortage, companies need raw manpower to alleviate some of the burdens being placed by the shortage and the transition of generations.
This highlights the need to take on nontraditional sources and rapid action plans to maintain competitiveness.
The Green Generation
Compared to the older workforce, the younger generation has different expectations regarding their employment and how it relates to their lives and overall well-being. Beyond these expectations is the influence of being raised in a world of instantaneous information, same-day delivery, and on-demand services on the internet while having the ability to keep in touch with their peer’s stories and opinions on social media.
Organizations may look into a few factors that may help characterize the younger workforce:
- Creative and compelling communication
Companies must consider being creative in their engagement within and outside the company. They should be transparent and decisive about being inclusive, aiming for sustainability, and increasing the visibility of their company culture in their workspaces and communications.
Outside the organization, their copy should be compelling enough to attract a wide range of talent and demonstrate their unique value proposition and ethos.
- Employee experience & rapid progression
Employers who uphold responsible environmental, social, and governance goals enhance their public image and attract better talent in the long run, who are likely to be as conscientious and purpose-driven as the organization.
The employee experience also goes beyond ESG goals, as an enhanced employee experience on all fronts of the business results in improved retention, productivity, and easier access to innovation. The younger generation is also keen to advance rapidly and have career visibility.
- Optionality
Many younger generations prefer to work or engage with multiple employers (or even have various careers). They are more likely to consider a side job alongside a full-time role and be more active in pursuing parallel interests.
- Hybrid setup
Hybrid setups are now becoming the norm – with the younger generation wanting to eliminate or at least reduce costs related to commuting. They also consider more intentionality regarding when and why they must go to the office. Though less so in more production-type roles, it is evident that the place or location of work does not affect productivity, and many of the younger generation are more productive and engaged when working remotely.
- Expectations on diversity and culture
Younger employees expect a more inclusive workplace that allows for self-expression and discourages or even prohibits non-inclusive behavior. They also emphasize sustainability and working with a team that aims to look beyond just numbers and figures: being attentive to their needs, ideas, and well-being.
Taking initiative
Aerospace and defense companies must be ready to take the initiative. This requires companies to eschew established ways of thinking and managing work.
- Find talent pools that may be overlooked
More than 70 million US workers have developed competitive skills through nontraditional means. Known as STARs or workers skilled through alternative routes, large tech and retail companies such as Google, Amazon, and Accenture have generally already removed degree qualifications from their job postings in hopes of attracting a wider net.
- Reimagine managerial roles
The role of leaders in organizations will have to be reimagined to address the workforce’s newer, modern needs.
Managers may need to be trained to better communicate their company’s purpose and values and drive innovation. There may also be a delineation between the skill sets and personality types that could be considered for managerial or leadership roles.
In addition, because organizations today are expected to be diverse and inclusive, conflict resolution will be key. Leaders who can effectively mitigate or mediate interpersonal conflicts and resolve them fruitfully will impact organizations massively. However, as conflict resolution is not an intuitive skill, organizations may need to implement upskilling through dedicated training programs, shadowing, or coaching opportunities.
- Experimenting with career paths
As the figurative “paper ceiling,” or the invisible barrier non-degree workers face, is increasingly dissolving, skills-based hiring and role assessment will be key to enabling a more effective workforce. Implementing nonlinear career paths and different forms of recognition, such as career opportunities to lead high-priority projects or even nonpromotion-based advancement, can help define a more visible and rapid career progression and make space for career optionality.
As nonlinear and atypical career paths become mainstream, employers must reevaluate how this fits into their overall talent management strategy.
- Leveraging staffing agencies or consultancies
Perfect for the medium and short term, staffing agencies can equip teams with much-needed talent within a shorter timeframe and from a wider array of sources. Cad Crowd specializes in aerospace and defense needs and exerts effort into maintaining and improving our talent network across many engineering disciplines.
- Offer compelling benefits
Companies must offer exciting benefits and compensation packages to attract and retain talent. This may include having a more personalized assessment and adding supplemental offers based on skills, experience, and career expectations.
Organizations may also consider including quality-of-life benefits such as mental health services, pet care, housing, and other subsidies. Companies also need to be intentional about on-site work and offer flexibility in other ways.
- Taking advantage of existing skills regardless of tenure
One of the common traps that employers fall into is to equate tenure to skills. Organizations are now pioneering a more progressive and objective approach to career development by enabling younger employees to take on roles traditionally reserved for those with tenure.
- Impart a data-centric culture
The primary goal of data is to figure out how to optimize an organization’s capabilities. This includes better using talent data and other data sources to craft optimal decisions at the best times. Companies must ensure proper programs, training, and tools are available to use data better. They may also need to encourage active communication around data throughout roles and departments.
Aerospace and defense companies must respond decisively to the workforce’s incoming transition and evolving needs. By implementing nonlinear career pathing, searching for alternative talent sources, and elevating compensation and benefits, the industry can expect better talent availability and retention for the long term.
CadCrowd specializes in equipping mission-critical teams with the best engineering talent. Find the best within or around our network of 100k+ engineers. Schedule a discovery call today.
