What Does 2024 Hold For Aerospace And Defense Enterprises?
The aerospace and defense sectors stand on the brink of a transformative year. As 2024 unfolds, these industries face an era defined by rapid technological advancements, geopolitical shifts, and an ever-evolving market landscape. These changes promise to redefine the boundaries of what's possible, setting the stage for remarkable innovations and strategies. At the core of this transformation are the enterprises driving forward, ready to adapt and thrive in this dynamic environment.
Bringing In Fresh Talent
The American aerospace and defense (A&D) sector has seen a significant resurgence in employment figures, eclipsing the numbers observed before the pandemic. By 2022, firms within the US A&D sphere bolstered their teams by over 101,700 individuals, reaching a workforce size of 2.2 million. This increase of 4.87% from the previous year surpasses the pre-pandemic workforce count of 2.18 million, marking a noteworthy recovery and growth within the industry.
However, this rise in employment doesn't shield the sector from facing critical talent shortages. Such shortages pose a risk to meeting the escalating demands for production, driven by increased domestic travel and countries boosting their defense arsenals. The industry finds itself at a crossroads, grappling with the challenge of attracting a diverse range of talent, from technicians and manufacturing workers to engineers. A noted engineering enterprise in Asia highlighted the technician shortage, suggesting it could lead to higher maintenance expenses and potentially hinder plans for fleet expansion.
In a survey conducted by the National Association of Manufacturers (NAM) during the third quarter of 2023, approximately 75% of American manufacturers acknowledged that drawing and keeping a skilled workforce stands as their top business hurdle.
Facing competition from various sectors for skilled professionals, A&D enterprises are aware of the necessity to appeal to top talent, especially those with digital proficiencies. Professionals are increasingly gravitating towards roles in other high-tech fields, such as the automotive sector, particularly with advancements in electric and autonomous vehicles, as well as the life sciences sphere, encompassing medical technology and biotechnology.
Given the industry's average annual salary of $108,900—55% higher than the national average—it's clear that compensation alone may not meet the evolving expectations of the workforce, especially among Gen Z individuals who prioritize meaningful impact and purpose in their careers. Therefore, A&D enterprises are prompted to look beyond traditional incentives, focusing on mission-driven marketing and strategic recruitment efforts that align with the personal values and goals of prospective employees.
Keeping The Team Together
In August 2023, the manufacturing sector was still grappling with a high number of vacancies, amounting to 604,000, even amidst robust hiring efforts. Interestingly, voluntary resignations represented approximately 68% of all job separations. This underscores a critical challenge for Aerospace and Defense (A&D) enterprises: not just attracting skilled personnel but more crucially, retaining them. The A&D sector sets the bar high for its workforce, demanding specific educational qualifications and security credentials, highlighting the importance of holding onto experienced staff, especially as the retiree numbers swell.
Traditionally, the success of these enterprises has hinged on a workforce deeply rooted in experience and aligned with the company's culture. Given the current competitive job market dynamics, it's vital for the sector to secure its top-tier talent.
To combat worker turnover, A&D enterprises have leaned towards offering better pay and more adaptable working conditions. This strategy, reflected in the manufacturing arm of the A&D sector, has seen a 4% increase in average hourly wages from the first quarter of the fiscal year 2022 to the same period in 2023. Additionally, a significant move towards remote working arrangements over the past two years has resulted in a 19% decrease in the average quit rates.
However, merely providing flexible work options might not sustain retention rates indefinitely. Identifying obstacles such as rigid production schedules and the potential for creating divides within the workforce have highlighted challenges to offering such flexibilities. The industry is expected to innovate methods for attracting and retaining skilled employees.
Integrating and embracing cutting-edge technology stands out as a promising approach not only to boost profit margins but also to energize the workforce. A&D enterprises are looking at launching new initiatives that allow their employees, regardless of their role, to interact with advanced technologies. This could involve tech-focused rotational programs or allocating time for employees to work on technology-driven passion projects, thereby enriching their job experience and commitment to the company.
Fostering Skill Development
With a notable portion of the aerospace and defense (A&D) workforce nearing retirement and a significant percentage already beyond 55, the necessity for grooming the next generation of professionals for enduring operational and security stability is paramount. To navigate this shift, A&D enterprises are tasked with enhancing their educational strategies to match the pace of industry innovation. These strategies encompass:
Establishing partnerships with educational institutions to forge innovative training and workforce development programs.
Broadening the scope of internships, apprenticeships, and varied career progression opportunities.
Advancing collaborative research efforts with leading research universities.
It's imperative for employees at every level within the A&D sector to be well-versed in cybersecurity essentials, understanding their individual roles in maintaining a secure operational framework. Through these focused workforce development tactics, Choctaw enterprises in the A&D field are not only poised to attract and secure top talent but are also better equipped to foster a safe and secure working environment.
Transform Your Business With Choctaw Global
Choctaw Global, the diversity arm of the Choctaw Nation of Oklahoma, spans various sectors, including government contracting, defense and aerospace, commercial ventures, and investment activities. By uniting a family of companies under one umbrella, we deliver unparalleled administrative support in information technology, human resources, and finance, empowering businesses to reach new heights. If your enterprise seeks a partner with a broad industry and geographic scope committed to innovation and excellence, we are your destination. Connect with us today to explore how our comprehensive services and solutions can drive your business forward.
