Study Highlights Challenges, Solutions To Labor Shortages for Aerospace and Defense

The aerospace and defense industry must adapt its talent practices to meet the evolving needs of customers and workers in order to remain competitive and deliver against growing demand in a changing demographic and workforce landscape. (Photos: AIA and PwC)

The aerospace and defense industry is on the verge of a variety of exciting technological advancements that will help modernize aviation and national security. However, as the Aerospace Industries Association (AIA) and PwC highlight in their new study, this sector is still plagued with labor challenges as demand for skilled workers rises while supply diminishes. The companies believe there are several critical areas in which addressing these challenges with innovation can help the sector retain talent and continue to offer defense solutions while remaining profitable.

The aerospace and defense sector is currently struggling with a labor shortage. AIA President and CEO Eric Fanning best summarizes this issue by explaining that the workforce “is the cornerstone of our industry’s success, but AIA’s latest study with PwC shows that our companies continue to face broad challenges attracting and retaining the talent they need. This is creating significant headwinds for an industry that’s filled with exciting opportunities. By responding with the creative solutions for which our industry is renowned, we can continue to fuel the growth and innovation that will propel us toward the future.”

One of the largest challenges facing the sector is the increasing demand for talent with specific, niche skill sets. Though aerospace and defense companies are constantly looking to innovate and develop new technology, AIA points out that seldom is this industry viewed as a destination of choice. To overcome this, companies must focus on skills-based hiring. This method of recruitment focuses on a candidate’s particular skills rather than previous work experience or education. Utilizing skills-based hiring will increase the number of prospects that companies will have from which to select the best candidates.

The challenge with labor shortages doesn’t end with standard roles. In the U.S. today, 70,000 cleared roles also remain unfilled. Given that recent studies estimate firms lose $20,640 per month for each vacant cleared position, this challenge must be addressed to collect significant amounts of revenue that would otherwise be lost. Cleared roles require a certain level of security clearance to obtain sensitive information and knowledge regarding certain projects. AIA explained that to help fill the staggering gap between demand for cleared personnel and supply, companies should begin looking for new talent pipelines—including an emphasis on recruitment efforts aimed toward veterans. Furthermore, companies should look closely at projects to see which individual components require clearance, rather than taking the current start-to-finish approach to cleared work. Additional methods to attract qualified candidates to cleared positions include using social media to recruit, offering referral bonuses, using targeted advertising, and onboarding earlier through internships and apprenticeships. 

“Artificial intelligence is another growing technology asset that can benefit the business. AI-supported advanced analytics can be used to identify roles that may not require backfill because the job activities can be done via automation.”

An aging workforce is another growing concern for the aerospace and defense sector, since 29% of the industry’s employees are over the age of 55. The retirement firms are anticipating in the coming years will leave a gap of 3.5 million workers by 2026. Retirements have especially become popular during the course of the pandemic, and manufacturing has been hit especially hard by the exodus of workers. The key to overcoming this challenge is effective workforce planning. Rather than simply recycling job descriptions and refilling the roles directly, companies should assess the responsibilities of a vacant position to determine if it’s all necessary or if certain components can be redistributed to existing roles. Identifying when jobs can be part-time or even given to a contractor can also help companies proactively face the loss of so many workers. Moving forward, employers should also thoroughly understand the difference between the expectations of different generations. Doing so will help them develop more appealing jobs for younger professionals seeking work.

The last critical opportunity that the study from AIA and PwC highlights involves leadership. Experience in leadership roles—especially those involving managing people—has been severely lacking, a trend that started during the pandemic. This means that companies should be developing various programs to help the next generation of management become effective managers and leaders.

The aerospace and defense sector is facing many daunting labor challenges, some of which are expected to only worsen in the coming years. However, as the report by AIA and PwC suggests, there are many proactive steps and innovations companies in the industry can take to ensure they remain sufficiently staffed and profitable as they navigate these unprecedented challenges.  

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