Defense Industry’s Demand for Talent Continues to Outpace Supply
The aerospace and defense industry currently provides over 2.2 million jobs across the United States, representing a robust 1.4% of the U.S. employment base. Despite generating revenues of $829 billion in 2023, an 11% increase from the previous year, the industry faces a critical talent shortage. While 75% of companies struggle to find qualified candidates, the situation is further complicated by the fact that 25% of the current workforce is approaching retirement age.
Furthermore, the defense and aerospace industry is confronting unprecedented challenges in talent acquisition. The demand for security-cleared positions has surged by almost 1,000% since 2014, however, the qualified candidate pool has grown by less than 10%. As a result, the industry experiences a concerning 13% turnover rate, significantly higher than the national average of 3.8%. This talent gap is now causing substantial delays in production and innovation, affecting the sector’s ability to meet growing commercial and military aircraft demands.
Defense Industry Faces Critical Workforce Shortages
Current labor dynamics in the defense and aerospace industry reveal a deepening talent crisis that threatens to undermine national security objectives. With defense needs expanding rapidly, major aerospace and defense companies increasingly report that workforce shortages are creating substantial production bottlenecks and delaying critical projects.
Aging Experts Leave Knowledge Gaps
The graying of the defense workforce represents one of the most pressing challenges facing the sector today. According to studies, only 39% of the current workforce is under the age of 45, creating an imbalance that jeopardizes knowledge continuity. Moreover, approximately 25% of aerospace and defense employees have more than 20 years of experience and are at or beyond eligible retirement age, taking with them irreplaceable institutional knowledge when they depart.
This demographic shift creates particular vulnerabilities in specialized areas. The General Accounting Office estimates that 30% of government program managers could retire soon, with retirements potentially shrinking the ranks of engineers, contracting officers, and computer specialists by 8% to 14% over the same period. These departures create critical knowledge gaps that can compromise mission readiness.
In one telling example, a U.S. aerospace and defense employer had to rehire retirees to restart production of a legacy weapon systems line because the current workforce lacked familiarity with these specialized systems. Additionally, the aging workforce was explicitly highlighted as a critical issue in the European Defense Industrial Strategy, demonstrating this is not merely a U.S. concern but a global challenge.
Security Clearance Requirements Limit Candidate Pool
Beyond demographic challenges, security clearance requirements create another significant barrier to filling defense industry positions. Currently, over 70,000 cleared roles remain unfilled across the United States, representing substantial unrealized revenue for aerospace and defense companies.
The clearance process itself restricts the potential talent pool considerably. Most positions require U.S. citizenship, immediately narrowing available candidates. The three clearance levels—Confidential, Secret, and Top Secret—each require progressively more complex and in-depth background investigations. Some positions additionally require Sensitive Compartmented Information (SCI) or Special Access Program (SAP) access, which may involve polygraph examinations.
The process remains entirely controlled by the U.S. government rather than hiring organizations, creating administrative hurdles that extend hiring timelines. Consequently, defense employers face intensifying competition for the limited pool of clearance-eligible candidates, not only from within the industry but also from major technology companies like Amazon and Apple.
Between 2021 and 2031, the Bureau of Labor Statistics projects the U.S. will need approximately 3,800 new aerospace engineers annually, yet the current pipeline of security-clearable talent falls far short of this demand, creating a persistent gap between workforce needs and available personnel.
Technological Advancements Create New Defense Careers
Technological innovations are reshaping the defense industry’s talent landscape, creating high-demand careers that increasingly require specialized knowledge in emerging fields. Beyond traditional defense expertise, today’s military advancements necessitate a workforce fluent in digital technologies, creating both opportunities and significant staffing challenges.
AI and Cybersecurity Positions Go Unfilled
Nearly a quarter of the Pentagon’s cyber jobs remain vacant, with the Department of Defense struggling to reduce this critical gap. Civilian cyber workers present the primary challenge, as defense organizations find it difficult to attract and retain these specialists when competing against private sector alternatives. The Pentagon currently maintains approximately 75,000 civilian cyber positions, 25,000 military cyber roles, and relies on roughly 75,000 contractors to fulfill its cybersecurity needs. Despite the creation of new specialized AI positions—including AI/ML specialists, AI test and evaluation specialists, and AI adoption specialists—defense organizations face unprecedented competition for qualified candidates.
Autonomous Systems Demand Specialized Talent
The proliferation of Systems with Autonomous Capabilities (SACs) introduces complex human-machine teaming requirements that place new demands on military personnel education, recruitment, and training. Maintaining autonomous fleets under challenging tactical conditions requires a fundamental adjustment to how the military structures and executes maintenance support. Particularly, the significant increase in software/hardware requirements, coupled with physical platform maintenance, necessitates technicians with broad crossover experience at the forefront of autonomy in industry. Without properly trained personnel, the “man-machine collaboration” essential for autonomous systems cannot exist in a functional way.
Digital Engineering Transforms Traditional Roles
Digital engineering environments are fundamentally changing traditional defense positions across multiple sectors. The Army recently signed a directive enabling growth of digital engineering capability across the force by:
- Establishing focus areas in ground vehicles, aviation, and sensors
- Promoting interoperability across the force
- Developing talent and expertise in digital domains
This transformation requires extending capabilities beyond development into sustainment, creating “digital threads from requirements all the way to sustainment”. Currently, the shift toward digital environments is hampered by insufficient training and interoperability challenges between tools used by different defense contractors. Nevertheless, digital engineering is viewed as “the linchpin of all the digital transformation efforts” underway in defense sectors.
Global Competition Intensifies Talent Acquisition Challenges
Competition for defense industry talent has reached unprecedented levels, creating a perfect storm where aerospace firms must battle against both technology giants and international contractors for the same limited pool of qualified candidates.
Tech Giants Lure Defense-Qualified Candidates
Major technology companies increasingly poach skilled workers from defense contractors, offering competitive salaries and innovative work environments. Of the 70,000 engineers graduating annually in the United States, merely 44,000 are qualified to work in aerospace, with these candidates actively pursued by tech giants like Amazon and Apple. Between 2021 and 2031, the U.S. will need approximately 3,800 new aerospace engineers every year, yet defense employers struggle to compete with Silicon Valley’s allure.
Notably, recent tech industry layoffs have not significantly benefited the defense sector, as laid-off technology workers generally have not transitioned to aerospace careers. The emergence of generative AI threatens to intensify this competition, especially in STEM fields where both sectors anticipate simultaneous increases in automation adoption and labor demand.
International Defense Contractors Compete for Same Talent Pool
Globally, competition for defense talent remains equally fierce. Employment in aerospace products and parts manufacturing in the United States currently sits at 534,442 professionals, yet workforce availability varies significantly across international markets.
Cultural differences further complicate global talent acquisition strategies. In Europe, employees typically develop stronger ties to their specific employers, whereas American workers tend to form attachments to the broader defense sector itself. European candidates primarily evaluate opportunities based on compensation, professional development paths, and meaningful work activities. Meanwhile, their American counterparts prioritize workplace flexibility and relationships with colleagues.
These regional variations require defense contractors with multinational operations to develop geographically tailored recruitment approaches. One single global talent strategy proves inadequate as solutions are not universally applicable across borders. Ultimately, employers now face competing not only with domestic rivals but simultaneously with international firms targeting identical skill sets, creating unprecedented pressure on talent acquisition teams worldwide.
Defense Companies Implement Innovative Retention Strategies
In response to acute talent shortages, defense companies are reimagining traditional workplace practices, implementing forward-thinking strategies to retain qualified personnel and attract new generations of workers. These innovations address both immediate staffing needs and long-term knowledge continuity concerns.
Flexible Work Models Attract Diverse Candidates
Facing unprecedented recruitment challenges, the defense sector has begun embracing workplace flexibility previously uncommon in the industry. Currently, 84% of aerospace and defense professionals report that their employers offer remote working options. Many firms have adopted alternative work schedules like 4/10 and 9/80 for both frontline and back-office employees. This shift represents a significant departure from pre-pandemic norms, as the federal government and defense contractors historically showed hesitancy toward accommodating remote or flex-time options.
These flexible arrangements have proven particularly beneficial for military spouses, traditionally disadvantaged by frequent relocations. For this demographic, remote work provides a “life-changing opportunity” to maintain career continuity despite military-mandated moves.
Mentorship Programs Bridge Generational Knowledge Gaps
With 25% of the industry’s workforce at or beyond retirement age, defense companies increasingly utilize structured mentorship initiatives to preserve institutional knowledge. The Department of Defense’s Mentor-Protégé Program—the oldest continuously operating federal mentorship program—has successfully helped more than 190 small businesses expand their footprint in the defense industrial base over the past five years.
Essentially, these programs create sticky experiences that drive retention once employees have joined the organization. Organizations implementing formal knowledge transfer systems report significantly improved documentation capabilities compared to those without proper systems.
Compensation Packages Evolve Beyond Salary
Defense contractors now recognize that compensation transcends mere salary considerations. In fact, 65% of aerospace organizations report successful implementation of employee value propositions that focus on fostering connection and continuous learning.
Leading firms like Northrop Grumman have pioneered diverse benefits packages including shortened work weeks and generous leave options. Others invest in educational programs, fitness routines, and wellness initiatives designed to nurture talent both inside and outside work environments. This holistic approach to employee welfare demonstrates the industry’s commitment to creating supportive workplace cultures where diverse talent can thrive despite the unique demands of defense careers.
Conclusion
Defense industry employers face unprecedented workforce challenges that demand immediate attention and innovative solutions. While the sector provides over 2.2 million jobs across the United States, critical talent shortages persist, especially in specialized roles requiring security clearances. The combination of retiring experts, limited qualified candidates, and fierce competition from technology companies creates significant operational risks for defense contractors.
Though defense organizations have adapted their recruitment and retention strategies, the talent gap continues to widen. Recent initiatives such as flexible work arrangements and comprehensive mentorship programs show promise, yet the industry needs additional solutions to address its workforce challenges. The success of these programs, coupled with evolving compensation packages, demonstrates the defense sector’s commitment to building sustainable talent pipelines.
The future of defense industry staffing depends on organizations’ ability to attract new generations of workers while preserving crucial institutional knowledge. As technology reshapes traditional roles and creates new specializations, defense contractors must balance immediate staffing needs with long-term workforce development goals. Their success will directly impact national security objectives and the continued advancement of critical defense capabilities.