Report Summary

The lack of college graduates in the United States who have studied science, technology, engineering and mathematics (so-called STEM subjects), coupled with an expected wave of retirees, has been a source of consternation in the aerospace and defence (A&D) industry for some time. And, as 2011 marks the year in which the first of the baby boomers, born in 1946, will turn 65, the pressure will only rise. The recent financial crisis, which weakened many retirement accounts, has forestalled this trend to some extent, but as the economy improves, many skilled workers will leave. In addition, regulations designed to control export of military technology prevent companies bidding for Defence Department contracts from outsourcing work to foreign firms, as well as from using non-US citizens on classified projects.

Nevertheless, A&D companies interviewed for this report are acutely aware of these challenges and are taking a number of steps to deal with the issues, some of which are aimed at changing their internal culture.

Our findings highlight some of the strategies being employed, from encouraging more students to consider studying STEM subjects to making the best use of potential retirees:

• The economic downturn has had a slight silver lining by slowing the expected wave of baby boomer retirements. Companies are using this lull to mentor mid-level managers so they can step into leadership positions when retirements start to accelerate.
• A&D firms report intense competition in recruiting college graduates who have the skills they are seeking and who can also obtain security clearances. Most use internships to sell students on the positive aspects of their companies by giving them meaningful and challenging work.
• Once these restless, young workers are in the workplace, firms in the industry are making concerted efforts to keep them from departing to other companies or sectors. They achieve this through mentoring programmes and by acknowledging that the younger generations have different expectations of the workplace.
• A&D companies are investing time and money into non-profit organisations that work with elementary and high school students in order to boost the number of US students choosing STEM professions, which is seen as the root of the problem. Nevertheless, enrolment numbers remain low. Companies are pushing for studies and data to assess what programmes will have the most impact.
• Companies are also searching for potential employees in the ranks of retiring military personnel. If they have holes to fill when gearing up to compete for major contracts, they often use their employees’ networks, as well as online social networks, to obtain referrals.