Ask any U.S. aerospace and defense (A&D) chief executive what his or her primary concern is and more times than not the answer will come back “workforce.” Keeping 849,000 people who design, build, support and service the industry’s systems and products engaged while attracting and developing successive generations of employees is no easy task, after all.

The results of Aviation Week’s 2017 U.S. Workforce Study, released on Sept. 12, point to several encouraging trends. A worrisome “leadership dip” in 40-50-year-olds has smoothed out, attrition is relatively low at 4.3%, and the average ages of the overall A&D workforce (46) and its engineers (45) declined slightly. The notion that A&D companies cannot compete with rich tech giants such as Google, Apple, Facebook or Amazon? It is largely a myth: Nearly three-quarters of young professionals responding to a survey for the study believe A&D incentives and benefits are comparable. What dims A&D’s appeal for engineering students is not pay but bureaucracy, which sometimes is unavoidable in an industry that counts on government contracts for much of its business.

But the allure is still there, and if anything it has been energized by dynamic new companies that are shaking the status quo in the space industry such as SpaceX, Virgin Galactic and Blue Origin. When Virgin Galactic posted openings for 100 jobs, 6,000 applicants showed up.

The Aerospace Corp., which serves as a technical advisor across the U.S. space enterprise, had an enthusiastic response to its first invite-only job fairs to support a surge in hiring. “Space is exciting, and the perception is that this is a cool place to work,” says CEO Steve Isakowitz.

However, respondents also believe that in some respects the A&D industry remains too anchored to the past. While women fill one in four senior leadership roles—higher than at Facebook, Yahoo, Google, Intel, Twitter or Cisco—they are stuck, as a percentage of the overall A&D workforce, where they were a decade ago. Efforts to attract more Hispanics and African-Americans to the industry have had little success. In fact, when it comes to diversity, the industry has not changed significantly in four decades, despite a major shift in the demographics of the U.S.

The industry lost about as many jobs as it created last year, including the elimination of entire levels of senior leaders. And average pay is on the decline for A&D engineers in many disciplines, perhaps a reflection of the industry’s recent hiring binge in the South, where wages and living costs are lower than on the East or West coasts.

Then there is the immense challenge companies face in figuring out how to harness the mushrooming number of advanced technologies and processes that are being spawned outside of aerospace. “We still need mechanical, aerodynamic and electrical engineers, but it is not enough,” says Northrop Grumman Chairman and CEO Wes Bush. “The pace and change of technology have broadened. We need [workers] who are conversant in multiple disciplines. But we would not want the universities to tone down or replace their aeroengineering programs. It is about expanding the pool, not shrinking it.”

Aviation Week’s annual Workforce Study, conducted in partnership with the Aerospace Industries Association, American Institute of Aeronautics and Astronautics and PwC, is an exhaustive effort that looks broadly at trends in workforce hiring, retention and compensation, as well as at the industry’s appeal to young professionals and students.

This year’s study consisted of interviews with 22 top A&D executives, workforce data submitted by companies representing 65% of the industry’s workforce and company data on average pay in key industry jobs. It also involved a 10% random sample of engineering students from 11 universities that A&D companies have identified as preferred “suppliers” of new graduates and a 10% random sample of young professionals from 14 U.S. companies.

Among some key findings: 

  • The face of A&D will not change soon. The demographics of workers hired in 2016 mirrored the status quo.
  • Despite years of concern about “brain drain,” A&D employees over age 60 are not heading for the door. Just 1.8% of the workforce and 1.4% of A&D engineers retired last year.
  • Young professionals and university students say their No. 1 desire in considering career paths is to be part of a critical technological challenge.
  • And A&D companies continue to struggle to find ways to help young employees deal with student debt: 56% of young professionals used student loans, with rates highest for Hispanics and African-Americans.
  • There are jobs begging to be filled: A&D companies currently have 27,000 open job requisitions.

Respondents to this year’s Workforce Study were asked to identify which companies are doing the best job of meeting the needs of employees by investing heavily in technology and workforce development. Boeing topped the list, followed by Northrop Grumman, Raytheon, Rockwell Collins and Harris Corp.

The study also asked companies to identify the universities that are meeting their criteria as a “preferred supplier” of talent. The top U.S. universities this year are the Georgia Institute of Technology, Purdue University, Virginia Tech, San Diego State University, the University of Colorado and Cornell University. Preferred supplier, however, does not necessarily mean from where most grads were hired. That designation goes to the University of Central Florida and the University of Florida.

With the commercial aircraft industry and its suppliers working off record backlogs and defense spending recovering from a slump, attracting and retaining qualified workers will be even more critical in the coming years, notes Bush. In the last three years, Northrop Grumman has doubled the number of internships it has offered. Longer term, the industry is looking at how to get more K-12 students interested in STEM (science, technology, engineering and math) education to feed the pipeline. 

Download the Workforce Report Executive Summary