Deloitte Consulting LLP polled 42 senior executives from 16 aerospace and defense (A&D) companies on talent management practices in their organizations. The report, Winning the War for Talent: the 2007 Survey of Talent Trends in Aerospace & Defense, identifies how the A&D industry has made significant progress in the area of talent management over the past decade, yet a number of external factors are now making it necessary for A&D organizations to become even better at attracting and retaining critical talent. Factors in the report include:
Shrinking talent pool. The pool of A&D recruits is getting smaller. In 2004, the United States produced only 137,000 undergraduate engineers1, of which only 95,900 were U.S. citizens eligible for security clearance2. That same year, China graduated more than 351,000 new engineers3.
Rising attrition. A&D employees are becoming harder to retrain, with voluntary attrition rising from 1 to 2 percent in 2003 to 13.6 percent in 2005. The highest turnover is in engineering and program management — two areas that are particularly critical to achieving expected results by A&D companies4.
Fierce competition. A&D organizations no longer seem to be among the top recruiters on campus, making it harder to attract the attention of potential recruits.
Deloitte Consulting believes these trends make it increasingly difficult for A&D companies to acquire the young talent they need to replace the multitude of workers who are nearing retirement — a gap that threatens both the future of the industry, and the future of our nation.
The report presents the results from an in-depth survey of talent challenges and practices across the A&D industry. The findings underscore the severity of today’s talent problem and offer a number of practical insights for companies to consider as they take steps to avoid a long-term crisis.
About the Survey
The findings of Winning the War for Talent indicate that A&D organizations have recognized talent management as a priority and made selected investments in talent management capabilities; however, they will be better positioned to compete in the current environment if they increase their focus on knowledge management, employee rewards and further integration of their talent management programs.
• Knowledge management represents a major issue for A&D organizations, as they stand to lose decades of accumulated institutional knowledge each time an employee retires. This is particularly true for program managers and engineers, whose retirement rate nearly doubled between 2004 and 2005.5 Despite this fact, only 19 percent of our survey respondents indicated their organization has a robust process in place to document and retrieve the knowledge of skilled workers.
• Employee rewards packages designed to drive the attraction and retention of talent are becoming critically important for A&D organizations, given rising voluntary turnover in the industry. Yet only 29 percent of survey respondents indicated that their organizations design employee rewards packages based on the expressed preferences of critical employees. Rewards include everything about the work experience that affects an employee’s commitment and contribution to business value, including compensation, benefits, culture, work environment and career opportunities.
• Integrated approaches to talent management enable an organization to align talent management efforts with its business objectives. A&D organizations have clearly begun to evaluate the talent implications of business decisions, with nearly 90 percent of survey respondents indicating that their organization discusses talent management as part of strategic planning. However, our survey response data also suggests organizations are developing talent management programs (e.g., performance management, recruiting) in isolation, rather than as part of a fully integrated approach.
Media coverage
Highlights from Winning the War for Talent were featured in the April 2007 cover story of The Manufacturer and the February 2007 cover story of Aviation Week. Both articles feature quotes from Tim Short, principal, Human Capital practice, Deloitte Consulting LLP, and Jim Schwendinger, principal and Global and U.S. A&D practice leader, Deloitte Consulting LLP. In addition, Winning the War for Talent was mentioned in the August 20–27, 2007, issue of Aviation Week in the "Letter from the Editor" section.
Posted with the express permission of Aviation Week.
1 Duke University, “Framing the Engineering Outsourcing Debate,” December 2005.
2 Aviation Week & Space Technology, September 2006.
3 Duke University, “Framing the Engineering Outsourcing Debate,” December 2005.
4 Aviation Week & Space Technology, September 2006.
5 Aviation Week & Space Technology, September 2006
