Defence Growth Stifled by Retirement and Workforce Growth

Defence Growth Stifled by Retirement and Workforce Growth

Against a backdrop of a wider lukewarm manufacturing sector, the UK’s Defence sector is seeing growth and significant investment:

• QinetiQ given a 5-year extension to LTPA with UK MoD, sustaining 1,200 jobs across 16 sites.
• Rolls-Royce awarded 5-year Typhoon engine support deal with UK MoD, 200 jobs and 2,400 jobs in supply chain.
• Rolls-Royce to advance smart shipping technology with Singapore Institute of Technology.
• In the North West, 700 highly skilled jobs to be created at MBDA site in missile system manufacturing technology in Bolton.

PLUS UK MoD collaboration with Germany new BOXER manufacturing facility in Stockport.

• In the Midlands, 400+ new jobs to be created at new Rheinmetall manufacturing facility in Telford, production to begin by 2027.
• BAE Systems explosives filling facility planned in South Wales.
• Rheinmetall to develop new UK HQ and collaboration centre in Bristol.

Unfortunately, the UK Defence manufacturing sector, like other manufacturing sectors in the country, is grappling with the significant challenges posed by an aging workforce and the impending retirement of experienced employees. However, the defence sector appears to be disproportionately affected by these demographic shifts and associated skills shortages.

The sector has a notably older workforce. According to recent analysis, the average age of workers in advanced manufacturing and defence sectors is higher than the UK workforce average. Defence is specifically identified as one of the sectors where the share of workers aged 50 or over is high, indicating a heightened vulnerability to skills shortages as experienced staff retire. The sector is described as being "disproportionately affected" by these skills shortages, which poses an unsustainable situation given the increasing global uncertainty.

It has seen positive growth in recent years, with increases in employment, recruitment, and revenue. However, despite this growth, the sector faces a "critical skills gap" and demand often outstrips capacity. The industry is working to address this by increasing investment in training and development, including apprenticeships and graduate programs.

Specific Challenges in Defence:

• High-Value Skills and Expertise: The defence sector relies heavily on specialised skills and expertise. The retirement of highly experienced personnel poses a greater risk to the defence sector's operational capabilities and innovation compared to some other manufacturing sectors.
• Wage Premium: Defence manufacturing jobs generally offer a significant wage premium compared to the average manufacturing salary. This suggests a demand for high-value skills and expertise, making the potential loss of experienced workers even more impactful.
• Security and Procurement: The unique nature of defence work, including security clearances and specific procurement processes, can create additional barriers to entry for new workers and make it harder to quickly replace retiring staff.

However, Defence, in collaboration with trade associations and unions, is actively pursuing strategies to secure its future workforce. This includes:

• Skills-sharing initiatives.
• Reform of the Apprenticeship Levy.
• Localised skills mapping.
• Promoting STEM outreach.

The sector is also emphasising long-term investment and sustainable funding models to support critical skills and manufacturing, recognizing the vital role these sectors play in national security and economic growth.

One thing that is for sure is that the sector in the UK is at a critical juncture and needs to accelerate its investment ins skills and workforce building as well as building knowledge transfer strategies.

Simon Owens, Director, Kaizen Talent Solutions simon@kaizen-ts.co.uk