Can the Aerospace & Defense industry surmount its workforce issues?

September 19, 2017

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By Jim Adams

I’ve recently had an opportunity to discuss workforce issues with some of the industry’s top company executives. They talked frankly about how to recruit and retain talent, especially people with the STEM skills that are so highly prized in many different industries. They also discussed how best to ensure the transfer of talent from older to younger employees, an issue that is becoming more acute as the older employees retire.

Companies are competing for talent in the traditional A&D disciplines (e.g., mechanical, electrical, and aerospace engineering) as well as in the fields of data science, cognitive computing / artificial intelligence / machine learning, cyber security, materials science, and advanced manufacturing. The competition for the newer, specialized skills is becoming more intense as information and digital systems converge and become integrated with traditional physical systems (such as air, land, and sea craft).

The convergence of physical and digital is also reshaping some traditional jobs. For example, the role of systems engineers has become more complicated as the free flow of information allows requirements to come from multiple places. Systems engineers have to integrate these requirements, while balancing other increasingly important pressures, such as delivering cost competitive solutions in accelerated timeframes.

In the fight for talent, A&D companies face industry-specific challenges. They need to find employees who can pass security clearance hurdles. They have a relatively high attrition rate for new employees and a greater proportion of older workers. Approximately 60% of A&D employees are over age 45 vs. 44% in the overall US workforce. Conversely, approximately 42% of A&D employees is under age 44 vs. 56% in the overall workforce.

This lopsided demographic mix, coupled with high attrition rates and increased labor mobility, poses serious risks to the industry. Companies can mitigate the risks with employee retention and succession planning. While many companies already have formal succession processes in place, others are still approaching succession in an ad-hoc manner. But as retirement rates creep up, it’s increasingly important to approach the issue of succession in a systematic way that includes leaders and management as well as critical technical employees.

It became apparent in my discussions with top A&D executives that they have broad-based ideas on ways to deal with their workforce issues, most notably in the areas of education and marketing. Executives are promoting the importance of STEM programs among the young and introducing future engineers to A&D as a place to build a career. Executives are also thinking about promoting a marketing campaign that highlights the global impact of A&D in securing the world from threats and in connecting people through flight, data, and networks. This kind of strategic problem-solving reflects the dynamic and innovative nature of A&D and will certainly help the industry surmount its workforce challenges.

For further insight on the workforce landscape within the A&D industry, check out Aviation Week’s 2017 Workforce Study.

©2017 PwC. All rights reserved. PwC refers to the US member firm or one of its subsidiaries or affiliates, and may sometimes refer to the PwC network. Each member firm is a separate legal entity. Please see www.pwc.com/structure for further details. This content is for general information purposes only, and should not be used as a substitute for consultation with professional advisors.

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