Investing in Human Capital is Critical in Aerospace and Defense Today

The lingering effects of the economic downturn and escalating competitiveness have led industry players to increase their emphasis on operating efficiency, collaborative relationships, effective post-merger integrations, and new alliances.

However, these adjustments are destined to have little impact on A&D companies unless the industry rapidly tackles some of its most pressing and inter-related human capital issues: not only the way it approaches talent management and human resources , but also the manner in which it develops the next generation of leadership as well as how it chooses to support the organization with the right culture, structures and operating models. Accenture’s new research-based study introduces a comprehensive approach to addressing these critical Aerospace and Defense workforce challenge.

How is the A&D business changing? Where does talent/workforce sit in the minds of senior executives in terms of its importance? What is the role of human resources and talent management in Aerospace and Defense? Are executives concerned about loss of talent in terms of potentially stifling growth and innovation? Who “owns” workforce issues and the human capital strategy within most A&D companies? Does the person have a voice in how business strategy is conceived and implemented?

In its quest to answer these questions, Accenture interviewed and polled approximately 40 senior executives in both the business and human resources sides of leading North American A&D companies. What was uncovered is fascinating and illuminating. This paper presents the key findings of this research, supported by Accenture’s analysis of the resulting implications and opportunities.

The findings of this study raise profound implications for Aerospace and Defense companies in North America. More than half of the respondents indicated that the potential for decreased business performance due to changing workforce demographics is either looming or critical. In addition, 67 percent of the executive respondents lack confidence in their company’s ability to execute programs to develop future leaders. Consistent with this finding, 63 percent lack confidence in their company’s capability to deal with human capital challenges.

Leadership development, talent sourcing organizational structure and corporate culture problems are too often back-burner issues in the North American Aerospace and Defense industry. They need to be moved front and center immediately. Human capital in Aerospace and Defense needs to be approached comprehensively —not with piecemeal and random programs that offer too little follow-through. This means an integrated approach to solving four problems: talent, leadership, culture, and organizational challenges. The good news: The company that can claim this high ground of a comprehensive human capital strategy will be at a significant competitive advantage.