The aerospace and defense (A&D) industry is at a critical inflection point as it faces strong growth in business but continued attrition and talent recruitment issues, according to a study that the Aerospace Industries Association (AIA) and consulting firm McKinsey released this week at the Paris Air Show. In the face of this, A&D organizations need to generate at least 30% greater productivity within the existing workforce, the study found.
Titled “Accelerating Progress-Maximizing the Return on Talent in A&D,” the study delves into the A&D workforce dynamics and highlights the need for fresh approaches and sustained investment to strengthen the workforce pipeline. It drew insights from more than 30 organizations representing more than 600,000 U.S. employees, as well as those of industry leaders, talent executives, and national workforce data.
According to the study, the U.S. A&D sector generated $995 billion in 2024, up 5.7% year over year, but attrition remained at 15% despite multiple retention efforts. A&D workforce reached 2.23 million employees in 2024, but critical talent shortages in engineering and skilled trades persist.
These challenges create headwinds for efforts to increase productivity, meet growing customer demand, and drive digital adoption, the study said.
“The aerospace and defense industry continues to lead in innovation thanks to the power and ingenuity of our workforce—but the talent challenges we face continue to grow more complex,” said AIA president and CEO Eric Fanning.
“To remain a global leader, we must take bold, strategic action to attract, retain, and empower the next generation of talent,” he added. “That means investing not only in people, but also in the technologies and partnerships that will secure our industry’s resilience and competitiveness for decades to come.”
Some of the key ways to boost efficiency, according to the study, could be reimagining how work is designed and executed; equipping the existing talent pool with new skills; and incentivizing critical employees in meaningful ways. For example, artificial intelligence and automation have become key priorities for companies working to address the talent shortage, the study notes.