A wave of capital is moving into defense technologies that sit at the intersection of…
Workforce Trends in the Aerospace Industry: Navigating Uncertainty Through Design, Resilience, and Digital Acceleration
By David Sweetman, Global Manufacturing Industry Marketing Manager
The aerospace sector today stands at a pivotal crossroads. Bolstered by soaring passenger traffic post-pandemic, record aircraft order backlogs, and rising defense expenditures tied to geopolitical instability, leaders face mounting pressure to meet demand even as they contend with a shrinking labor supply, rapid digital transformation, and global uncertainty. These trends demand a workforce strategy grounded in intentional design, retention, and reskilling—approaches that Workday’s unified cloud platform can support.
Global Uncertainty & Demand Volatility
McKinsey underscores the scale of fluctuation in aerospace demand: near-record production backlogs driven by consumer demand, yet shadowed by economic volatility, inflation, high fuel prices, policy shifts, and geopolitical events like the war in Ukraine. Procurement leaders face persistent commodity shortages and unstable supply chains amid capacity consolidation. McKinsey’s “Talent Gap” report highlights global defense expansion, aging infrastructure, and capabilities deficits—pressures that compound volatility.
This unpredictability makes workforce flexibility non-negotiable. Traditional hiring cycles and industrial labor models must make room for modular, cross-disciplinary approaches that can respond to surges or slowdowns in production or defense requirements.
Labor Shortage & Retention Challenge
The aerospace industry confronts an acute labor shortage across the world. In the U.S., approximately one-third of aerospace workers are over 55, leading to accelerated retirements and knowledge exodus. Entry- and mid-level roles in engineering and skilled trades are particularly affected: nearly 40% of firms report difficulties finding appropriately skilled staff. An AIA–McKinsey joint study released June 2025 confirms persistent shortages, 15% attrition (double the national average), and stagnant hiring rates in engineering and trades.
McKinsey estimates that closing the “talent gap” for a mid-sized aerospace and defense company could yield high value avoided costs or incremental bottom-line value. The pressure on talent pipelines underscores why retention, reskilling, and engagement must be linked to any workforce plan.
Digitalization & Workforce Design
Digital transformation catalyzes new productivity pathways but also redefines expected workforce capabilities. Automation, AI, machine learning, robotics, and advanced analytics are reshaping roles across engineering design, manufacturing, analytics, and talent planning. McKinsey estimates employees are adopting AI-based tools rapidly—even faster than executive leadership realizes.
Unlocking digital ROI requires workforce design built for adaptability—structures that can pivot staffing, skill sets, and roles in response to new technology and market shifts. Workday’s unified HCM, analytics, and talent planning tools enable HR and leadership to model workforce scenarios, measure skills readiness, and predict future demand, enabling faster sprints into new capabilities.
Workforce Design: Define + Align
Effective workforce design starts with an accurate understanding of current and future skill needs. McKinsey recommends five talent imperatives for aerospace and defense: (1) align workforce plans with business strategy; (2) streamline hiring; (3) invest in internal reskilling; (4) reinforce high-performance culture; and (5) transform HR to drive talent value.
Digitally enabled workforce design empowers adaptive staffing models—identifying when to shift workers between manufacturing, engineering, and services based on demand, and helping C-level executives make future-ready plans. Workday’s Planning and Adaptive Insights products extend ERP, finance, and talent data into actionable workforce and reskilling priorities.
Retention & Engagement
High attrition—especially in front-line supervisor and middle manager roles—is a red flag. McKinsey reports these groups are twice as likely to leave compared to individual contributors. LinkedIn and industry associations point to stresses from ambiguous career paths, inadequate loyalty to traditional corporations, and desire for purpose-driven work—particularly among Gen Z and early Millennials.
AIA’s 2025 study finds that digital fluency, internal mobility, and meaningful career design are critical to retaining next-generation talent. Companies can leverage Workday Peakon Employee Voice and engagement tools to monitor sentiment, identify emerging flight risks, and take timely retention actions.
Reskilling & Career Pathways for Gen Z
Gen Z—who values purpose, digital fluency, and continuous learning—is entering the workforce at a time when aerospace manufacturing needs fresh technical capability. To compete with tech and defense firms, and to make manufacturing careers compelling, aerospace firms must offer structured, transparent learning and development paths.
Programs like Workday Learning enable microlearning, skills tracking, and experiential development directly linked to career progression. Workday’s skills cloud also aligns internal mobility with future-centric talent planning.
Several Aerospace Corporations now host Workday functional analyst apprenticeships, teaching skills like advanced reporting, compensation design, security, and integration, showcasing how training programs can elevate internal talent.
Workforce Strategy in Action: Aerospace Companies on Workday
Several major aerospace firms have begun harnessing Workday’s platform to support workforce resilience and agility:
- Rolls-Royce uses Workday Prism Analytics and People Analytics to centralize workforce cost data and fuel better talent decisions.
- Leonardo Group cites better employee engagement and cross-division alignment via Workday’s unified HR and communication tools.
- QinetiQ has embedded Workday Peakon to boost employee engagement by 10% year-over-year.
- Saab uses Workday to progress from transactional to data-driven, intelligent HR and enhance the ability of HR colleagues to support managers
Why C-Suite Leaders Should Care
C-level executives must ensure their companies are not just production-ready—but future-ready. Workforce deficits, high turnover, limited digital readiness, and skill shortages expose firms to missed deadlines, quality variance, and competitive vulnerability.
According to McKinsey, companies that treat talent as a strategic asset deliver higher total shareholder returns. Digitally enabled operating models will determine which aerospace leaders thrive in volatility—and which fall behind.
Conclusion
Global uncertainty, persistent labor shortages, and rapid digitalization are reshaping the aerospace manufacturing labor paradigm. To succeed, leaders must pivot toward digital-first workforce design—embracing reskilling, retention, and internal mobility to meet surging demand with agility.
C-level executives owe it to their organizations—and their shareholders—to make workforce planning central to strategy. With Workday’s integrated cloud platform, firms like Rolls-Royce, Leonardo, and others are already unlocking new agility, insights, and employee engagement.
In an era of turbulent markets and elevated expectations, aerospace leaders who go beyond simply “filling roles”—and instead architect workforces for resilience and transformation—stand to shape the future of flight.
References
Brooke Weddle et al., The Talent Gap: The Value at Stake for Global Aerospace & Defense, McKinsey (July 17, 2024).
Michelle Bryant et al., Overcoming Challenges in Aerospace Procurement, McKinsey (July 17, 2024).
Anne Wainscott-Sargent, Addressing the U.S. Aerospace Engineering Shortage, Aerospace America (July 1, 2025).
AIA and McKinsey Release New Study on Tackling Talent Gaps in Aerospace and Defense Industry, Aerospace Industries Association (June 16, 2025).
Study: A&D at Inflection Point In Face of Retention Issues, AIN Online (June 18, 2025).
Planning for Uncertainty in Commercial Aerospace, McKinsey (Feb. 15, 2023).
Superagency in the Workplace, McKinsey (2025).
Europe’s Gray-to-Green Workforce Transition, McKinsey (2023).
Workday customer stories:
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