An estimated 82% of companies in the defense industrial base report difficulty finding qualified STEM workers, according to a report from the National Defense Magazine.
The Semiconductor Industry Association projects the United States will face a deficit of approximately 1.4 million technicians, computer scientists, and engineers by 2030.
Margarita Howard, CEO and president of government contractor HX5, sees these pressures daily. Her company employs over 1,000 professionals in over 20 states providing engineering, research and development, and information technology services to NASA and the Department of Defense. Finding people with the right skills has never been simple. Now it’s getting harder.
“Our focus is professional support services in research and development and in specialty areas, primarily the STEM fields of science, technology, engineering, and math,” Howard says. “So, across the DoD and NASA, those are the specialties that make up our primary workforce. They have to have advanced education.”
That educational requirement narrows the talent pool considerably. But defense contractors face additional constraints that commercial tech companies don’t: security clearances, government-specific experience, and competition from private sector firms offering higher compensation.
Defense Industry Employment Numbers
Defense industry employment currently sits at roughly 1.1 million workers, well below its mid-1980s peak of 3.2 million. The gap between current capacity and mission requirements keeps widening.
Research from ManpowerGroup indicates that 71% of U.S. employers struggle to find the skilled talent they need. Defense contractors experience this shortage more acutely because candidates often must obtain layers of security clearances—a process that can consume months. At the same time, commercial technology companies offer immediate employment, and may lure qualified employees with better pay packages.
Howard describes these recruiting difficulties frankly. The company looks for what she calls “purple unicorns”—professionals with hard-to-find combinations of skills and experiences. Candidates need technical expertise, appropriate clearances, and understanding of government operations.
Defense Work Versus Commercial Tech
HX5 emphasizes its mission and broader impact when recruiting. Howard says she tells potential hires: “You have to get up in the morning and be excited about the particular program you’re supporting. Let’s get to the moon, let’s accomplish this mission overseas.”
This approach has yielded results. Many HX5 employees have stayed with the company for over a decade. “Some of them have been with us 15 years,” Howard notes. The company celebrated its 20th anniversary in 2024.
Long tenure matters in government contracting. Experienced personnel understand procurement regulations, agency cultures, and technical requirements specific to defense work.
“We prefer to hire experienced individuals, so we look for people that have worked with, or supported, NASA or the Department of Defense, as this experience is always very helpful,” Howard explains. “Experience in their respective fields, while supporting these agencies’ respective programs and missions, is very different from experience gained working in the commercial world.”
That preference for experience creates a catch-22. How do you build experience when you can’t find people with it?
Universities Fill the Gap
Howard found an unexpected solution through academic partnerships. “One of our most valuable partnerships has been with academic institutions,” she says. “Collaborating with universities on supporting research initiatives has helped us stay ahead of the emerging technologies, and also foster a pipeline of talented graduates that may come to work for us or contribute on a short-term basis.”
The Pentagon has recognized the role of universities in defense workforce development. In 2024, the DoD awarded a $190 million cooperative agreement to the Research Triangle Institute and its consortium partners to deliver the Defense Science, Technology, Engineering, and Mathematics Education Consortium.
University partnerships offer HX5 advantages beyond immediate hiring. Research collaborations expose the company to emerging technologies before mainstream adoption. Graduate students and faculty working on short-term projects can bring fresh perspectives, and the relationships create pathways for talented graduates who might otherwise pursue commercial technology careers.
“Collaborating with the universities on supporting research initiatives has been very eye-opening and rewarding,” Howard says.
Adapting to Generational Shifts
Born between 1997 and 2012, Generation Z is projected to make up roughly one-third of the global workforce by 2030, according to projections from Johns Hopkins. Meanwhile, a 2025 report from the World Economic Forum found that 38% of Gen Z respondents indicate they might quit their jobs within a year.
Howard acknowledges these shifting dynamics. “We’re excited about Gen Z, and certainly we’ve tried to adapt as much as we can to their needs.”
HX5 has modernized internal systems to accommodate digital-native preferences. “We believe, and we’re seeing, that Gen Z thrives in digital-native environments,” Howard says. “And we’ve modernized some of our internal communication processes to include those platforms.”
The company has also implemented flexible work models where security standards allow. “Where it makes sense, we have implemented flexible work models, like hybrid work models, allowing some flexibility while maintaining very strict security standards in our environment,” Howard says. “We have to do that.”
The Compounding Challenge
Many analysts expect workforce pressures in government will intensify. The Aerospace Industries Association recently cited a McKinsey & Company report that found the retirement age and attrition rate in aerospace and defense run almost 10% higher than the national industry average. About one-third of all aerospace and defense manufacturing and engineering roles are filled by workers 55 or older.
When these experienced professionals retire, they take decades of specialized knowledge with them. Training replacements takes years, assuming contractors can find candidates to train.
Technological advancement compounds the problem. STEM occupations will experience the biggest impact from generative AI and automation, according to the McKinsey report. Engineers’ roles will need rethinking as AI capabilities expand. Nobody knows precisely what skills will matter most in five years.
Howard has positioned HX5 to adapt. “We try to stay ahead of changing technologies, AI, and cybersecurity,” she says. “I saw it was important to get started on it early and we have.”
Nevertheless, the defense contracting industry is confronting some tough workforce numbers: too few graduates entering STEM fields, too many experienced professionals retiring, too much competition from commercial firms, and too little time to close the gap.
Companies like HX5 are finding workarounds through university partnerships, retention programs, and mission-focused recruiting. Whether these measures prove sufficient depends on factors largely beyond individual contractors’ control: education policy for example, and whether enough young people choose careers supporting national defense over opportunities in commercial technology.
