Enabling talent in aerospace and defense

HR business leaders can improve your business operations

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The aerospace and defense (A&D) industry is adjusting to a new market reality. Domestic defense spending in the US is slowing, while new buyers have emerged seeking more sophisticated capabilities. As a result, companies in this US $500 billion industry are aggressively investing in opportunities to enter new markets — developing nations in the Middle East and other regions.

At the same time, increasing margin pressure is forcing A&D organizations to restructure operations to control costs and remain competitive. These conflicting forces represent a major challenge for A&D organizations.

To develop innovative products and services that will differentiate themselves in the marketplace, A&D companies need to maintain a highly skilled, talented and agile workforce. Yet developing this talent pool will require significant investments in people and technology, expenses that will face intense scrutiny in the current environment.

Making intelligent, targeted investments in talent

Chief human resources officers and their teams find themselves squarely in the middle of this dilemma. Clearly, Human Resources (HR) functions that can drive costs out of legacy business processes and help their companies make intelligent, targeted investments in talent will be positioning the organizations to seize a competitive edge.

To do this, however, they will need to partner with other functions, particularly Finance, as they build the business case for these investments. To gain insights into how the A&D industry is adapting to these developments, our People Advisory Services group administered a survey in the summer of 2015 to executives and leaders within HR, Finance and other organizational functions in the industry.

The survey sought to collect input about industry trends and diverse HR topics, including talent management, HR service delivery and compliance. Respondents identified key HR operations and people priorities and anticipated outlooks in the next three years.

Among the survey’s key findings: many respondents believe that an organization’s overall talent profile will be a key differentiator in coming years. HR organizations in A&D companies that make smart, targeted talent investments can position their organizations to achieve innovation objectives and seize a competitive edge.

The need to focus on improving HR operations

In addition to raising the talent profile, the survey suggests the need for a greater focus on improving HR operations that will support talent enablement, new product development, innovation and international expansion.

The survey also indicates that improving collaboration between HR and Finance could play a critical role in helping organizations make the right investments in talent and talent enablement. While HR and Finance agree on many areas according to our survey, they also differ significantly on what they consider to be the main challenges facing their organizations.

While HR and Finance respondents agreed that improving process inefficiencies should be a key initiative for company management, of HR respondents said that the management agenda also included improving the talent profile, while only 45% of Finance professionals agreed.

The right talent and talent enablement investments could be key differentiators for A&D organizations moving forward. HR functions must align with Finance to demonstrate the value of these investments and take tangible steps to realize this value.

42% of Finance respondents felt that HR had no significant influence over key finance objectives but hope that HR can play a greater role.

Key talent takeaways:

Making smart and targeted investment in talent programs can improve engagement. Below are several key takeaways that could help A&D organizations raise their talent profile.

  • Align and integrate succession planning strategy with other talent management programs to identify and develop a future leadership pipeline
  • Identify smart investment opportunities and a strategic approach to employee mobility to support their efforts to expand globally
  • Expand diversity initiatives — lack of diversity at different levels of the organization was also seen as a top challenge in the survey; integrating diversity considerations into talent management programs (recruiting, succession planning and others) is a tremendous opportunity to improve engagement, idea generation, collaboration and overall talent strategy
  • Evaluate how they can integrate employee engagement efforts into talent investments
  • Search for opportunities to identify unique methods to increase engagement

Valuable insights on how HR can improve its operations:

  • Invest in data and technology to improve the ability of the HR function to provide strategic, regulatory and talent insights to the organization
  • Monitor how best to deliver the critical services needed to enable the talent of the organization — this may require adjusting the service delivery approach as opportunities to operate more efficiently and effectively emerge within the organization and externally; many A&D organizations are decentralized, which creates inherent structural and cultural challenges in this space
  • Focus on improving compliance by incorporating it into all activities, with a particular focus on automation and tracking
  • Develop strategic insights that link HR elements to broader business insights

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