The 2025 edition of the Aerospace Industries Association’s (AIA) annual aerospace and defense (A&D) workforce study, conducted in collaboration with McKinsey, highlights key insights into the challenges and opportunities facing the industry.

AIA member companies and their executive leaders participated in a survey that revealed persistent talent shortages and high attrition rates, posing a threat to the industry’s future growth, currently at a robust 4.8 percent year over year.

A&D organizations have invested significantly in attracting and engaging employees, yet the industry-wide attrition rate remains high at nearly 15 percent. The study identified critical talent gaps in essential production roles, with challenges in hiring engineering talent reported by 76 percent of organizations and sourcing skilled trades talent reported by 56 percent.

Global volatility and shifting macroeconomics are reshaping the A&D landscape, intensifying competition for key talent across industries as retirements increase and workforce greening continues.

Challenges and Opportunities

The industry faces challenges in talent acquisition and retention, with key findings indicating the need for a step-change improvement in workforce productivity. To address these challenges, A&D organizations can leverage three key levers:

• Reimagine workflows via enhanced technology: Implement tech-enabled workflows to drive transformation
• Equip the workforce with new skills: Develop a talent development engine to nurture leadership and functional skills
• Use employee incentives to drive engagement: Prioritize compensation and incentives to reduce attrition

By maximizing their return on talent, A&D organizations can gain a competitive advantage and meet the growing demand for essential technologies.

Recommendations for A&D Organizations

Based on the study findings, A&D organizations can take the following actions to enhance workforce productivity and address talent challenges:

1. Implement advanced technologies to streamline workflows and increase efficiency
2. Invest in continuous skill development programs to upskill employees and stay ahead of industry trends
3. Design comprehensive employee incentive programs to boost engagement and reduce attrition rates

Conclusion

The future of the aerospace and defense workforce is at a critical juncture, with talent shortages and high attrition rates posing significant challenges. By adopting a strategic approach to talent management and leveraging technology and incentives, A&D organizations can enhance productivity and gain a competitive edge in the industry.

FAQ

Q: What are the key challenges facing the A&D workforce?

A: The A&D workforce faces persistent talent shortages, high attrition rates, and intense competition for key talent across industries.

Q: How can A&D organizations address talent challenges?

A: By reimagining workflows with enhanced technology, equipping the workforce with new skills, and using employee incentives to drive engagement and reduce attrition.

Q: What is the industry growth rate for A&D?

A: The A&D industry is currently growing at a robust 4.8 percent year over year.

Download the Full Report

For more detailed insights and recommendations, download the full report Accelerating Progress: Maximizing the Return on Talent in A&D.