How can Defence plan for the workforce it needs tomorrow?

Rethinking Defence workforce strategy in an era of continuous disruption.  

In brief:

• Defence workforce challenges are increasingly being framed as a shortage of people, but the deeper issue may be that workforce systems designed for a more predictable era are struggling to keep pace with strategic, technological and workforce disruption. 
• Workforce can no longer be seen as an enabling consideration or capability input. It is increasingly the pacing element that determines how quickly Defence can realise capability, adapt to change and translate strategic ambition into operational outcomes.
• Future success will depend less on producing increasingly precise workforce forecasts and more on building adaptive workforce systems that can predict changing demand drivers, challenge assumptions, orchestrate capability, and adapt as conditions change.

As workforce becomes increasingly central to capability realisation, are existing workforce approaches still fit for purpose? 

Defence organisations across Australia and New Zealand are being asked to increase readiness, strengthen deterrence, introduce new technologies, expand sovereign industrial capability and respond to a deteriorating strategic environment. These demands are emerging at a pace and scale not experienced for several decades. Yet despite significant investment in workforce growth, recruitment reform and retention initiatives, workforce constraints continue to emerge as a recurring risk to capability delivery.

A useful way to understand the relationship between workforce and capability is through the framework of the Fundamental Inputs to Capability (FIC). Workforce is often viewed primarily through the Personnel FIC, yet its influence extends far beyond this. Workforce considerations shape organisational structures, determine how people are trained and developed, influence the sustainment of capability, affect the contribution of industry partners, and underpin how information is collected, analysed and exploited. Ultimately, they also influence how capability is generated and employed. Capability outcomes do not arise from any one FIC in isolation, but from the way the FICs interact as an integrated system. Workforce is a critical enabler of those interactions. It should therefore be understood not merely as another input to capability, but as one of the principal mechanisms through which Defence converts strategy, policy and investment into operationally realised capability.

Viewed through this lens, the workforce challenge becomes much broader than simply recruiting and retaining sufficient numbers of people. If workforce is a primary mechanism through which capability is realised, the more important question is whether existing workforce approaches are capable of supporting Defence's future capability requirements. Further, the challenge is often framed as a shortage of people. While workforce supply remains a critical constraint, this interpretation risks understating the real issue. The deeper problem is that many Defence organisations continue to rely upon workforce planning approaches designed for a more predictable era, one in which occupations remained relatively stable, technological change occurred gradually, workforce demand evolved incrementally, and future requirements could be forecast with reasonable confidence.

Those assumptions are becoming increasingly difficult to sustain. Artificial intelligence, autonomous systems, advanced manufacturing, cyber capabilities, digital engineering and new operating concepts are changing the nature of Defence work itself. Strategic priorities are shifting more rapidly than traditional workforce generation systems can respond and capability delivery increasingly depends upon connected networks of military personnel, civilian workforces, industry partners, education institutions and international allies. Critical skills are being sought simultaneously across Defence, government and industry, creating competition for the same limited pools of talent.

The consequence is that workforce can no longer be viewed as an enabling function or capability input, sitting downstream of strategy and capability decisions. Workforce is increasingly the pacing element that determines how quickly Defence can realise capability and deliver operational outcomes.

The question facing Defence leaders is therefore no longer simply how many people may be required in the future. It is whether existing workforce strategy is fit for purpose in an environment characterised by continuous technological, strategic and workforce disruption.

Australia and New Zealand face a distinctive workforce challenge

The workforce pressures confronting Defence organisations are not unique to Australia and New Zealand. Similar themes are emerging across the United Kingdom, Europe, North America and other allied nations. However, the expression of those pressures within our region is distinctive.

Unlike larger nations, Australia and New Zealand operate within relatively small labour markets. Both are attempting to expand capability, modernise and strengthen industrial capacity, while competing for talent within constrained national workforce systems.

Australia faces particularly significant challenges. Defence spending has increased substantially in response to an evolving strategic environment, with considerable investment directed towards major initiatives including AUKUS, sovereign industrial capability, long-range strike, integrated air and missile defence, cyber capability and enterprise-wide transformation programs.

The significance of these investments extends beyond the acquisition of platforms and technology.

Many of these initiatives require skills that are already scarce within Australia. Nuclear engineering, systems engineering, digital engineering, cyber operations, advanced manufacturing, program delivery, infrastructure development, commercial management and regulatory assurance capabilities must all expand simultaneously. At the same time, these skills are also being sought by Defence organisations, governments and industries across allied nations.

This creates a workforce planning challenge unlike many encountered previously. Defence is not simply competing for talent locally. It is increasingly participating in a global market for specialised skills critical to capability delivery.

New Zealand faces similar pressures at a different scale. Its Defence Capability Plan highlights the need to rebuild capability, strengthen readiness and modernise the force while managing workforce challenges within a comparatively small labour market. In both countries, workforce availability increasingly shapes the practical limits of what can be delivered.

The implication is significant. Workforce shortages are no longer solely an organisational issue. They are becoming a strategic constraint on national capability.

Why the challenge is fundamentally different

Many workforce discussions focus on scale. Recruitment targets are missed, vacancies increase, and attrition rises. The instinctive response is to increase recruitment, expand training and strengthen retention. While these interventions remain valid and necessary in some form, they assume the challenge is primarily numerical. Instead, the contemporary Defence workforce challenge is increasingly qualitative, systemic and dynamic.

Today, technology is evolving faster than many workforce systems can adapt. New capabilities emerge before workforce architectures, occupations, training pipelines, and planning methodologies can adjust. The challenge is no longer simply forecasting future workforce requirements. It is maintaining a workforce system capable of adapting as those requirements continue to change.

Many workforce planning methodologies assume future demand can be forecast with enough certainty to identify workforce gaps and develop corresponding interventions. Increasingly, however, those assumptions may become outdated before the plan itself has been implemented. Workforce planning remains valuable, but approaches designed for relatively stable environments are now being applied to conditions characterised by uncertainty and continuous change. 

Five limitations of traditional workforce planning

These observations should not be interpreted as criticisms of workforce practitioners. Most Defence organisations possess capable workforce planning functions and increasingly sophisticated analytical tools. The challenge is structural rather than individual. Traditional workforce planning often begins with the existing workforce establishment. Future workforce demand is estimated, workforce supply is projected and resulting gaps are translated into recruitment, retention or training actions.

This approach remains useful for budgeting, resource allocation and establishment management. However, it suffers from several limitations when applied to contemporary Defence challenges.