Defense Tech Talent Market Analysis (2025 Outlook)
1. Market Overview: Key Trends Driving Demand
The defense technology sector is experiencing surging talent demand driven by geopolitical and technological shifts. Great power competition – notably U.S. focus on China and the war in Ukraine – is spurring increased defense budgets and modernization efforts (Creating a modernized defense technology frontier | McKinsey) (The Defence Sector Faces a Shortage of Key Skills | Hays). Major powers like the U.S., UK, and Japan are rapidly investing in emerging tech (AI, cyber, space) to gain strategic advantages (Creating a modernized defense technology frontier | McKinsey). The U.S. Department of Defense committed $150+ billion to R&D in FY2024 (a 55% increase over five years) for innovation units and emerging capabilities (Creating a modernized defense technology frontier | McKinsey). Similarly, NATO launched a €1B Innovation Fund for defense tech startups (Creating a modernized defense technology frontier | McKinsey).
This infusion of capital has led to record growth in defense tech startups and innovation hubs, which in turn drives demand for skilled engineers and scientists. Global venture funding for defense-related tech companies jumped 33% year-over-year to $31B in 2024, with big investments in AI ($12B), autonomous systems, and advanced communications (Creating a modernized defense technology frontier | McKinsey). Meanwhile, traditional defense contractors are increasingly digitizing their platforms – for example, modern fighter programs relying on AI and networked systems – which requires new technical talent in software, AI, and networking (FARNBOROUGH NEWS: New Report Urges Defense Industry to Secure Software Talent). Overall, the defense sector is at a “critical junction” where public and private investment is creating a $250B opportunity to modernize, but success hinges on access to talent to scale these technologies (Creating a modernized defense technology frontier | McKinsey) (Creating a modernized defense technology frontier | McKinsey).
Another key trend is the shift from hardware to software-centric systems, creating an outsized need for software and data experts. The amount of code in defense platforms is doubling every four years, underscoring the growing software intensity of weapons and systems (FARNBOROUGH NEWS: New Report Urges Defense Industry to Secure Software Talent). As a result, defense organizations are hiring more software engineers than ever – the largest aerospace and defense firms now hire about two software engineers for every hardware engineer (FARNBOROUGH NEWS: New Report Urges Defense Industry to Secure Software Talent). They are also seeking talent in artificial intelligence, machine learning (AI/ML), and cybersecurity to harness technologies like autonomous drones, cyber defenses, and cloud-based command-and-control.
In summary, elevated military threats and rapid tech innovation are driving a fierce competition for skilled defense tech workers. Both government and industry recognize that a modernized force is impossible without the right talent. As McKinsey notes, rising global tensions and technology races have made talent a strategic priority: “Rising competition in technology is driving up defense budgets and mobilizing defense innovators across sectors” (Creating a modernized defense technology frontier | McKinsey). Over the next 12–24 months, hiring leaders should expect this demand to intensify, especially as new defense programs (in AI, cyber, space, and advanced manufacturing) come online.
2. Job Function Breakdown: Hiring Trends by Role
Defense tech hiring needs span multiple specialized functions. Below is an overview of key job functions and their demand trends:
Software Engineering: Software developers are the most in-demand talent in defense tech. As noted, defense firms are now hiring roughly 2× more software engineers than hardware engineers (FARNBOROUGH NEWS: New Report Urges Defense Industry to Secure Software Talent), reflecting software’s critical role in modern weapon systems. There is a significant shortfall – an estimated 50,000 software and tech positions in A&D remain unfilled (FARNBOROUGH NEWS: New Report Urges Defense Industry to Secure Software Talent) (Cogent | Blog | THE SOFTWARE TALENT GAP IN THE AEROSPACE AND DEFENSES) – due to both growth in needs and attrition. Defense startups and non-traditional entrants have intensified the battle for software talent, often luring engineers with higher pay and flexible cultures. Despite economic headwinds, demand remains strong; defense industry analysts report no slowdown in software hiring because modernization programs continue to require new code (FARNBOROUGH NEWS: New Report Urges Defense Industry to Secure Software Talent). Over the next 1–2 years, expect aggressive recruitment of software developers with skills in cloud, embedded systems, and agile development. Traditional defense contractors are also upskilling and competing with Silicon Valley for these engineers, emphasizing mission-focused work to attract candidates (FARNBOROUGH NEWS: New Report Urges Defense Industry to Secure Software Talent).
Artificial Intelligence / Machine Learning Specialists: AI/ML talent has become a strategic priority as militaries integrate autonomy and data analytics. From AI-enabled surveillance to autonomous drones, defense projects need experts in machine learning, computer vision, and data science. The U.S. government has even launched a dedicated AI talent portal to recruit AI engineers into federal roles (USAJOBS - Search), underscoring the urgent demand. Defense companies are hiring AI researchers, data scientists, and algorithm developers to work on projects like predictive maintenance, intelligence analysis, and human-machine teaming. These specialists are in short supply globally, and defense employers compete with big tech and academia for PhDs in AI. Many open roles are in innovation labs or classified R&D units, often requiring advanced degrees and (ideally) a security clearance. Over the next 24 months, hiring for AI/ML is expected to grow rapidly, given DoD’s plans to field AI across operations. Venture-backed defense AI startups (e.g. in autonomous vehicles or decision-support AI) will also add pressure by courting the same talent pool.
Cybersecurity Professionals: Cybersecurity is another critical and fast-growing job function in defense. With cyber threats from nation-states on the rise, both military and contractors are expanding cyber defense teams. However, the talent gap is severe: as of 2023 the U.S. had almost 700,000 cybersecurity job openings and only enough qualified workers to fill about 69% of them (U.S. Desperately Needs Cyber Talent, Congress Says) (U.S. Desperately Needs Cyber Talent, Congress Says). In other words, “we’re stepping onto the digital battlefield missing nearly a third of our army,” a witness told Congress (U.S. Desperately Needs Cyber Talent, Congress Says). This gap directly affects defense and national security agencies. Cybersecurity analyst and engineer roles (e.g. network security, threat intelligence, zero-trust architects) are staying vacant longer and commanding higher salaries due to the shortage (U.S. Desperately Needs Cyber Talent, Congress Says). The job outlook is extremely strong – U.S. information security analyst roles are projected to grow 33% from 2023 to 2033, much faster than average ( Information Security Analysts : Occupational Outlook Handbook: : U.S. Bureau of Labor Statistics). Defense organizations (military cyber commands, defense IT contractors, cybersecurity firms) will be hiring aggressively. Expect a focus on candidates with certifications (CISSP, Security+), ethical hacking skills, and those eligible for high-level clearances. Given the shortage, companies may increase cross-training of IT staff into cyber roles and partner with universities to bolster the pipeline.
Hardware and Engineering (Aerospace, Electrical, Mechanical): While software is ascendant, traditional hardware engineering roles remain fundamental in defense. There is steady demand for aerospace engineers, electrical engineers, mechanical engineers, and other hardware specialists to design and build ships, aircraft, vehicles, sensors, and weapons. Job growth in these areas is moderate (for example, aerospace engineering roles are projected to grow ~6% this decade (Aerospace Engineers | MyFuture Career)), but replacement needs (retirements) keep hiring active. Notably, systems are increasingly complex, blending hardware with software; thus, engineers who can work in interdisciplinary teams (e.g. integrating radar hardware with AI software) are especially valued. In the next 1–2 years, programs like hypersonic missiles, next-gen fighter jets, and space launch vehicles will drive specialized hiring – e.g. propulsion engineers, RF/electronics engineers, and materials scientists. The sector also needs microelectronics and semiconductor engineers, as secure supply of chips has become a defense priority. One challenge: many young engineers gravitate to commercial tech or space startups, so defense-focused firms are ramping up outreach (e.g., university partnerships and STEM scholarships) to attract fresh graduates into these hardware roles.
Systems Integration and Systems Engineering: Systems engineers who can integrate complex defense systems are in high demand. As military platforms become networks-of-systems (think: fighters, drones, satellites, ground stations all linked), the ability to connect and integrate hardware, software, and data across these platforms is critical. Defense employers are hiring systems integration engineers to work on interoperability (e.g., implementing open architectures like JADC2), interface legacy systems with new tech, and ensure different contractors’ components work together. The job function of systems engineering often requires a holistic skill set – understanding of multiple domains, project management, and risk management in addition to technical know-how. Job postings for “systems engineer” in defense number in the tens of thousands (Defense System Engineer Jobs, Employment - Indeed). These roles often require security clearances and experience in defense acquisition programs. Going forward, as DoD emphasizes joint all-domain command and control, integration talent will be pivotal. Companies are seeking people who can serve as the “digital glue” between software developers, hardware designers, and mission operators. This trend will stay strong into 2025, and many organizations are investing in training systems engineers internally (through rotational programs and certifications) to fill the gap.
Summary: All key tech functions – from coders to engineers to cyber analysts – are experiencing hiring growth in the defense sector, but software, AI/ML, and cybersecurity are especially booming. These roles align with the sector’s shift toward digital technologies and are seeing the fiercest competition. Employers should tailor their talent strategies by function: for example, emphasizing mission impact and upskilling opportunities to lure software and AI experts, and offering clear career paths and certification support to attract cybersecurity professionals.
3. Company Size Analysis: Talent Demand by Company Type
The demand for defense tech talent varies by company size and type, with distinct trends among large contractors, mid-sized firms, and startups:
Large Defense Contractors (Primes): The major defense contractors (Lockheed Martin, Northrop Grumman, Raytheon, Boeing, General Dynamics, etc.) collectively employ hundreds of thousands and are ramping up hiring in high-tech areas. These primes are investing in software, cybersecurity, and R&D talent to execute large programs that increasingly have digital components. For example, big aerospace/defense firms now maintain sizable software teams (hiring ~2 software engineers per hardware engineer) to meet project needs (FARNBOROUGH NEWS: New Report Urges Defense Industry to Secure Software Talent). Large firms also face the challenge of an aging workforce – a quarter of the A&D workforce has over 20 years of experience and is at or beyond retirement age (2025 Aerospace and Defense Industry Outlook | Deloitte Insights). This means primes must recruit early-career talent to replenish their ranks and retain critical knowledge. In 2023, member companies of the Aerospace Industries Association saw turnover (excluding retirements) rise to ~13%, much higher than the U.S. average of 3.8% (2025 Aerospace and Defense Industry Outlook | Deloitte Insights). Thus, even as primes hire for growth, they are also backfilling losses. These giants have the scale and contracts to hire en masse (Lockheed Martin’s job postings, for instance, jumped by 60% at one point in 2023) (Lockheed Martin's hiring activity highest since 2020, with 3,000 new ...), but they often struggle to compete on salary and culture with the tech sector. Over the next 12–24 months, expect large contractors to emphasize workforce development programs – e.g. expanding apprenticeship and STEM outreach (the number of apprentices in advanced manufacturing nearly tripled from 2021 to 2023 (2025 Aerospace and Defense Industry Outlook | Deloitte Insights)) – to build talent pipelines. They are also increasingly open to partnerships with startups and remote work options to access broader talent pools.
Mid-Sized Defense Firms and Suppliers: Mid-tier companies (e.g. specialized defense electronics firms, component manufacturers, or niche service providers) are also hungry for talent, but face a unique set of hurdles. They often compete for the same engineers and analysts as the primes but without the brand name or resources to offer extensive benefits. Many mid-sized firms supply critical parts or subsystems; as primes modernize products, these suppliers need tech-savvy workers (for example, a radar sub-contractor needing more software-defined radio engineers). However, uncertainty in defense budgeting and contracting hits mid-sized players hardest. According to industry surveys, smaller defense firms report that continuing resolutions and program delays lead to stop-work orders, which “negatively impact the hiring and retaining of workers with the right credentials and experience.” In other words, a pause or cut in a contract can cause a mid-sized firm to lose talent to other industries. Despite these challenges, mid-sized defense companies are trying creative approaches: some are partnering with local colleges to train technicians and engineers, and others are focusing on niche expertise (e.g. becoming the best at one technology) to attract talent passionate about that area. In the next two years, talent demand at mid-sized firms will be strong in areas like systems integration, cybersecurity compliance (e.g. CMMC), and advanced manufacturing, but these companies must navigate competitive pressures. They may increasingly turn to remote or hybrid roles for non-classified work to widen their hiring geography and leverage lower-cost regions.
Defense Tech Startups: In recent years, a wave of venture-backed defense tech startups has emerged, and they are aggressively hiring. Firms like Anduril, Shield AI, Palantir, SpaceX, and numerous smaller startups are developing cutting-edge defense solutions (AI software, autonomous drones, satellites, cybersecurity tools) and expanding their headcounts. These startups often have a talent edge because they can attract top engineers who might not consider traditional defense jobs. As one analysis noted, defense tech startups succeed in part due to “privileged access to software- and data science-oriented talent, and the ability to attract a new generation” of tech workers (FARNBOROUGH NEWS: New Report Urges Defense Industry to Secure Software Talent). Many skilled professionals leaving big tech are drawn to startups by the promise of equity, modern tech stacks, fast-paced innovation, and a sense of mission. In fact, there’s been a *“talent migration from the DoD to defense startups,” as startups can now hire some of the best engineers and even former military tech experts (Silicon Valley Meets The Department of Defense: Top Observations ...). Over the next 1–2 years, expect these startups to continue scaling up hiring if funding remains robust. They will particularly seek software engineers, AI/ML researchers, and product managers who can bridge military needs and commercial tech. A challenge for startups is navigating security clearance requirements as they grow – many begin with unclassified projects, but as they win defense contracts, they’ll need cleared talent, which could constrain growth. Nonetheless, their presence has undeniably increased overall talent demand. Startups also pressure larger companies to adapt their culture; we see primes trying to emulate startup environments (innovation incubators, flexible dev ops teams) to retain talent.
In summary, large primes maintain the highest volume of hiring, especially for cleared roles on existing programs, while startups drive a lot of net-new demand in emerging tech areas. Mid-sized firms are caught in between – needing talent but often getting outbid or facing pipeline issues. All three segments will need to refine their talent strategies: large companies leveraging stability and training, mids focusing on specialization and partnerships, and startups leveraging agility and modern appeal. For job seekers, this means a wide array of company types to choose from, each with different value propositions (e.g., a stable long-term career at a prime vs. a fast-growth, high-upside journey at a startup).
4. Challenges in Hiring: Key Obstacles and Their Severity
Despite high demand, defense employers face significant challenges in hiring and retaining tech talent. Data and surveys highlight several pressing issues that will likely persist or worsen in the next 12–24 months. Figure 1 ranks the most prominent hiring challenges in the defense tech sector, along with their anticipated severity:
Figure 1: Top Hiring Challenges in Defense Tech (Next 12–24 Months)
Challenge: Competition with Private Tech Sector
Severity: Very High 🚩
Impact: Defense firms struggle to compete with big tech on compensation, perks, and remote work. 80% of defense companies say it’s “somewhat or very difficult” to compete with non-defense firms for talen】. Software engineers in commercial sectors can earn nearly 2× the pay of those in defens (FARNBOROUGH NEWS: New Report Urges Defense Industry to Secure Software Talent)】, luring candidates away. This competition is expected to intensify as tech companies also pursue AI/cyber talent aggressively.
Security Clearance Constraints
Severity: Very High 🚩 Many defense roles require a U.S. security clearance, which shrinks the talent pool and slows hiring. Clearance processing times average ~4–8 months (138 days for Secret, 249 days for Top Secre (How Long Does It Take to Get a Security Clearance? Times Go Up ...)4】. This delay means candidates often wait long periods before starting, and some drop out for other offers. Additionally, clearance eligibility (U.S. citizenship, clean background) limits hiring of foreign-born talent – notable since **50% of advanced STEM degree holders in the defense workforce are foreign-born ([STEM Immigration Is Critical to American National Security
STEM Talent Shortages (Pipeline)
Severity: High There is an overall shortfall of qualified STEM workers entering defense fields. In a recent survey, **82% of defense companies reported difficulty finding qualified STEM workers ([STEM Immigration Is Critical to American National Security Retention & Retirement Wave High Keeping talent is as difficult as hiring new talent. Defense employers face high turnover, as mentioned (engineering turnover ~13% in 202 ([2025 Aerospace and Defense Industry Outlook
Bureaucratic Hiring Processes
Severity: Medium The defense sector’s hiring processes (both in government and industry) can be slow and rigid. Lengthy background checks, multi-round interviews, and legacy HR systems often mean long time-to-hire, during which candidates may accept other jobs. Additionally, government contractors sometimes cannot extend competitive offers until contracts are finalized, causing them to lose candidates. While efforts are underway to streamline hiring (DoD is piloting new hiring authorities and tech tools), this remains a moderate challenge. Over the next 1–2 years, streamlining hiring will be key to prevent talent from “dropping out” due to frustration or delays. Cultural and Work Environment Gaps Medium Today’s tech professionals often expect flexible, modern work environments – something defense orgs (with on-site work, strict security, older tech stacks) may struggle to provide. Millennials and Gen Z value remote work and open source collaborati ([Cogent
Source: NDIA Vital Signs 2023 & 2024 surveys; National Defense Magazine reports; ClearanceJobs data.
As shown above, competition with the commercial tech industry and security clearance hurdles rank as the top obstacles. The private sector draw is potent: defense firms report difficulty attracting talent when Silicon Valley offers higher pay and remote optio (FARNBOROUGH NEWS: New Report Urges Defense Industry to Secure Software Talent)1】. This challenge is expected to remain very high, especially for software and AI roles. Likewise, clearance requirements – while crucial for security – pose a very high barrier, slowing the hiring pipeline dramatically (several months wait) and limiting non-traditional candidates.
“Talent shortage” in general (lack of enough STEM grads/experts) underpins many other issues. Notably, 64% of defense companies also struggle to find skilled trade workers (manufacturing, technician1】, not just engineers – indicating gaps at multiple education levels. Workforce surveys consistently show talent/workforce issues among the top concerns for defense businesses (43% of industry respondents in 2024 flagged ()9】).
Implications: Hiring leaders should prepare to tackle these challenges through targeted strategies: e.g., improve compensation packages or mission incentives to compete with tech firms; actively manage the clearance process by hiring ahead for cleared positions or sponsoring clearances early; and invest in training programs to grow talent internally (mitigating pipeline shortages and enhancing retention). Over the next 12–24 months, those organizations that effectively address these pain points will have a competitive edge in securing the talent needed for their defense technology initiatives.
5. Salary Trends: Compensation Analysis for Key Roles
Salaries in the defense tech sector are rising as organizations compete for scarce talent, though gaps remain compared to private-sector tech. Below is an overview of salary trends by role:
General Trend: Upward pressure on salaries is evident for most technical roles due to high demand and low supply. In cybersecurity, for example, the talent shortage has “increased hiring costs and salaries” for qualified worke (U.S. Desperately Needs Cyber Talent, Congress Says)8】. Across defense tech, companies are offering sign-on bonuses, higher base pay, and retention bonuses for critical skill sets (AI, cyber, software). However, defense employers traditionally have had lower salary ranges than big tech firms, partly due to government contracting rates. This gap is still notable at senior levels – a cleared software engineer might average around $150k in defense, whereas a similar engineer in a large tech firm could make $200k–250k+ with stock. The cost of labor is rising for defense budgets, and leaders are trying to balance competitive pay with program cost constraints.
Software Engineers: Software developers in defense now command six-figure salaries, especially if they hold clearances. Recent compensation surveys show **cleared software engineers (TS/SCI clearance) average about $147,000 in total compensation (High Compensation for Cleared Engineering and IT Jobs – Special Report - ClearanceJobs)3】. This is higher than the overall cleared-worker average (~$115 (High Compensation for Cleared Engineering and IT Jobs – Special Report - ClearanceJobs)1】, reflecting the premium on software skills. Entry-level software engineers with a security clearance often start above $70k and can reach mid-$100k with a few years of experien (High Compensation for Cleared Engineering and IT Jobs – Special Report - ClearanceJobs) (High Compensation for Cleared Engineering and IT Jobs – Special Report - ClearanceJobs)7】. Still, compared to Silicon Valley, these figures lag – top tech companies can approach $200k for mid-level developers. The gap has forced defense firms to raise software pay; indeed, the average aerospace/defense software compensation has been approaching tech-sector norms, but with fewer equity perks. Over the next year, expect steady increases (perhaps 4-5% annually) in software engineer salaries in defense, targeting critical specialties like cloud architecture and AI programming.
AI/ML Specialists: AI and machine learning experts are among the highest-paid in defense tech, due to extreme scarcity. While specific figures in defense aren’t always published, an AI engineer with clearance can often fall in the upper range of software salaries (e.g. $150k–$180k). Niche AI roles (like a machine learning scientist working on computer vision for drones) might go higher, especially if the candidate has an advanced degree and experience – offers exceeding $200k are not unheard of for top talent, particularly at venture-backed firms or if the candidate has a polygraph clearance. Many defense organizations classify AI specialists under software or engineering pay bands, but are granting special salary incentives or retention pay to keep them. We also see new government pay initiatives for AI talent; for instance, the Defense Department can use excepted service hiring with more flexible salary ranges for AI experts. Overall, salary trend for AI/ML is sharply upward, likely outpacing other roles, as these skills are critical and rarer.
Cybersecurity Roles: Cybersecurity analysts and engineers in defense earn competitive salaries, and these have been rising ~4% year-over-year recent (Cyber Security Salary (Senior, Mid & Entry-Level Pay 2025)7】. The U.S. median wage for Information Security Analysts (across all industries) was about **$120,000 in 2023 ( Information Security Analysts : Occupational Outlook Handbook: : U.S. Bureau of Labor Statistics)9】. Defense and clearance roles tend to pay a bit higher: a cleared cybersecurity engineer often sees total compensation in the $120k–$140k range. For example, cleared IT security professionals with a TS/SCI clearance average ~$13 (High Compensation for Cleared Engineering and IT Jobs – Special Report - ClearanceJobs)3】. Managers and those with specialized expertise (cloud security, penetration testing with clearances) can get into the $150k+ range. There is also differentiation by location (cyber jobs around DC pay more due to labor market competition). Given the near-700k national openings, cyber salaries will continue to climb; even public-sector agencies are adjusting pay scales or offering special pay rates to attract talent. Companies should budget for higher wages or risk unfilled cyber positions.
Hardware & Engineering (Mechanical, Aerospace, Electrical): Traditional engineering roles in defense have had steady, if not spectacular, salary growth. Aerospace engineers earned a median of about **$130,700 in 2023 (What is Aerospace Engineering?)3】 nationwide. In defense-heavy regions, an aerospace or systems engineer with a few years’ experience might earn in the $100k–$120k range, with senior engineers (15+ years) exceeding $150k (especially if in technical fellow or management tracks). Electrical engineers and mechanical engineers in defense typically see similar ranges, often starting around $80k-$90k for entry-level and reaching low-to-mid six figures at senior levels or with clearances. Compared to software roles, the salary growth here is slower – partly because these disciplines have larger talent pools domestically and have been core to defense for decades. However, even in these roles, specialized skills (e.g., an RF engineer for radar systems or a missile guidance engineer) can command premium pay if they are in short supply. We also see more mixing of skill sets – an engineer with both hardware and software skills (e.g., experience in model-based systems engineering) might negotiate higher pay. Overall, expect modest salary increases (perhaps aligned with inflation 3-4%) for most core engineering roles, with higher jumps for the “hotter” sub-disciplines.
Systems Integration & Program Engineering: Systems engineers and integration specialists often fall between pure software and pure hardware roles in compensation. Many systems engineers in defense are mid-to-senior career and can earn roughly $110k on average (varies widely by region and clearance). Because these roles are vital and often require broad experience, companies are offering competitive mid-career salaries to attract systems engineering talent. For instance, a systems integration engineer with a Secret clearance could be in the ~$100k range, but with a TS/SCI and 10+ years, could earn $130k+. Some defense contractors classify these roles under engineering or program management job families, where bonuses and incentives come into play. The salary trend is gradually upward as well, especially if the demand for integration (making all the new tech work together) grows – employers may provide retention bonuses for systems engineers who can shepherd key programs.
Geo Salary Variations: It’s important to note regional salary differences. The Washington D.C./Northern Virginia area, being a hub for cleared professionals, offers some of the highest salaries (average total comp for cleared roles in Northern Virginia is ~$12 (The Top 10 States for Cleared Candidates: Where to Maximize Your Salary - ClearanceJobs)7】). Other high-paying regions include Colorado (growing Space Force hub, average $126k) and Maryland ($125 (The Top 10 States for Cleared Candidates: Where to Maximize Your Salary - ClearanceJobs)5】. California’s defense tech hubs (Silicon Valley, Los Angeles, San Diego) average around $116k for cleared rol (The Top 10 States for Cleared Candidates: Where to Maximize Your Salary - ClearanceJobs)9】, a bit lower, possibly due to mix of roles and some being lower-clearance. Regions like Alabama (Huntsville) and Florida (Space Coast/Tampa) also rank in top 10 states for defense pay, with averages in the low $110 (The Top 10 States for Cleared Candidates: Where to Maximize Your Salary - ClearanceJobs)0】. Generally, cleared defense tech professionals in major hubs earn comfortably above national medians, though one must factor cost of living. Companies in lower-cost regions sometimes leverage that by offering remote work or relocating jobs, but for now the highest salaries remain in traditional defense clusters.
In summary, the salary outlook is one of growth across the board. Defense tech employers should plan for higher compensation budgets, especially for software, AI, and cyber roles. While mission and benefits (e.g., stability, training, relocation packages) are key parts of the defense employee value proposition, competitive pay is increasingly non-negotiable to secure talent in this market. We may also see innovative comp approaches – for example, more frequent raises, project completion bonuses, or flexible benefits – as firms try to close the gap with private tech companies without entirely breaking the bank.
6. Hiring Demand and Workforce Availability: Forecasts & Regional Variations
Looking ahead 12–24 months, hiring demand in defense tech is expected to remain high, outpacing the available workforce in many areas. Here are key forecasts and regional insights regarding job growth and talent supply:
Continued Job Growth: All indications show that defense tech roles will grow faster than average. The U.S. Bureau of Labor Statistics projects strong growth rates for relevant occupations over the coming decade – e.g., **33% growth for cybersecurity analysts (2023–2033) ( Information Security Analysts : Occupational Outlook Handbook: : U.S. Bureau of Labor Statistics)9】 and around 25%+ for software developers (2021–2031). Even traditional defense engineering roles (mechanical, electrical) are forecasted to grow in the mid-single digits, which, while modest percentage-wise, translates to thousands of new jobs each year. Specific to defense, as governments implement multi-year modernization plans (in AI, space, nuclear modernization, etc.), new jobs will be created not only within defense companies but also in government organizations (the Pentagon, NASA, NSA, Space Force, etc.) for program managers and technical experts. We also expect hiring surges in emerging areas: for instance, the AUKUS pact (Australia, UK, US) will create demand for submarine and cybersecurity talent; NATO’s tech investments will stimulate hiring in Europe for AI and quantum specialists. Overall, defense tech hiring is somewhat insulated from general economic swings by government funding – even if there’s broader tech sector cooling, defense hiring often continues due to national security imperatives (indeed, conflicts and threats can accelerate hiring).
Workforce Availability & Supply Constraints: The supply of cleared and qualified talent will remain tight. Many defense employers will find that the skills gap persists. For instance, by some estimates the U.S. cybersecurity workforce gap is about 500,000–600,000 professionals (between positions needed vs. available worker (U.S. Desperately Needs Cyber Talent, Congress Says) (Employers Must Act as Cybersecurity Workforce Growth Stalls and Skills Gaps Widen)7】. Globally, the (ISC)² organization estimates a worldwide cyber talent gap of ~3.4 million roles in 2022, highlighting that this is not just a U.S. problem. In advanced technologies like AI, the “available” workforce is essentially whichever PhD graduates Big Tech doesn’t already hire – a very limited pool. Universities are ramping up STEM output, but it will take time to appreciably close the gap. There is also a clearance hurdle on supply: of all STEM graduates, only a fraction can meet defense hiring criteria (citizenship, willingness to go through background checks). If immigration rules for high-skilled workers remain stringent, the defense sector can’t easily tap global talent to fill roles, which could exacerbate shortages. One bright spot: as some commercial tech firms slowed hiring in late 2023, a number of software engineers and tech workers showed new interest in defense/government jobs, drawn by mission or stability. This “talent realignment” could modestly improve availability, but likely not enough to satisfy demand fully.
Regional Variations: Geographically, defense tech talent is concentrated in a few key regions, which affects hiring and availability. The Washington D.C.-Maryland-Virginia (DMV) region is the largest hub, boasting the highest number of cleared professionals (over 480,000 active cleared workers in the U.S., many are in this regi (Employers Must Act as Cybersecurity Workforce Growth Stalls and Skills Gaps Widen)7】) and defense tech companies. Here, workforce availability is relatively high in volume, but so is demand – competition in the DC area is fierce, and many openings go unfilled due to clearance or skill mismatches. Other U.S. regions with notable defense tech clusters include: Southern California (LA, San Diego – aerospace and Navy tech), Colorado (Denver/Colorado Springs – space and cyber), Alabama (Huntsville – missile defense and space), Massachusetts (Boston area – robotics, biotech defense), Texas (Dallas, San Antonio – aviation and cyber), and the Pacific Northwest (Seattle – aerospace software). In these locales, a strong local talent base exists, often with nearby military bases or labs, but companies may still need to recruit nationally to fill specialized roles. For example, Huntsville’s growth has meant recruiting engineers from across the country to relocate.
Global Workforce Considerations: Internationally, U.S. allies are also expanding their defense tech workforces. Europe faces a similar crunch – a European report noted defense industries “struggling to find workers with needed skill ('Skilled workers wanted': The EU's defence industry struggles to find ...)8】. The UK’s defense sector grew significantly in the last decade but cites “a lack of people and skills” as the biggest threat to future grow (The Defence Sector Faces a Shortage of Key Skills | Hays)9】. Countries like Australia (embarking on major programs via AUKUS) have a limited domestic talent pool, prompting initiatives to train more engineers and potentially bring in expertise from the U.S./UK. Canada and NATO nations are ramping up cyber and AI units but often lose talent to higher-paying U.S. or European companies. On the other side, China and Russia are producing large numbers of STEM graduates; while Western defense firms generally cannot hire from those talent pools for security reasons, it underscores the competitive talent landscape. The net effect is a global competition for defense tech talent among allies. We may see more collaborative training programs (e.g., joint scholarship programs, talent exchanges between nations) to increase the collective workforce.
Forecasted Talent Shortfalls and Initiatives: If current trends hold, the next two years will see persistent talent shortfalls in key roles. By 2025, the gap in software and cyber roles could even widen if not enough new entrants come in. Recognizing this, governments and industry are launching initiatives: the DoD’s Chief Talent Management Officer is reforming hiring practices to attract Gen Z civilian tale (DOD Talent Chief Aims to Reform Hiring to Attract Gen Z)9】; new public-private partnerships are funding STEM education (e.g., the Defense STEM Education Consortium) to inspire future worke (STEM Immigration Is Critical to American National Security | Institute for Progress)7】. Some defense companies are increasing their presence near universities or opening R&D centers in talent-rich cities (for example, opening a software hub in Austin or Boston) to tap into local tech graduates. Reskilling programs are also on the rise – transitioning veterans or workers from declining industries into defense tech via bootcamps and certificates. These efforts can incrementally improve workforce availability, but likely won’t fully bridge the 12–24 month gap. Hiring leaders should thus plan for a competitive hiring climate and consider strategies like remote hiring for roles that can be unclassified (to draw talent from regions with more availability) and mentoring junior hires to productivity faster.
In terms of numbers, the defense tech sector is poised for net job growth. The Aerospace & Defense Workforce is still below its pre-pandemic peak in some areas (due to retirements and attritio (SPECIAL REPORT: Defense Companies Face Post-Pandemic Workforce Shortages)2】, so refilling those roles is part of the equation. According to an AIA study, more than half of defense companies only plan workforce needs 18 months o (SPECIAL REPORT: Defense Companies Face Post-Pandemic Workforce Shortages)7】 – meaning many are just now accounting for 2024–2025 needs, which appear substantial. We can expect tens of thousands of open positions across engineering, IT, and manufacturing in the DIB (Defense Industrial Base) each year. Regionally, the DMV will have the highest share of openings, especially for cyber and intel-related work, whereas regions like the Midwest (with fewer defense firms) may see relatively fewer openings but also have fewer available specialized workers.
Takeaway
The next 12–24 months will likely see robust hiring demand outstripping supply in the defense tech arena. Companies and agencies should anticipate tough competition for talent and uneven regional supply – abundant in some hubs, sparse elsewhere. To succeed, strategic workforce planning is essential: engage in early recruiting (internships, campus hires), leverage remote work to access untapped talent markets where possible, and double down on retention of the current workforce to avoid exacerbating the gap. The defense mission needs are mounting, and having the right people in place will be as critical as the technologies themselves.
Sources
This analysis is based on industry reports, including NDIA’s Vital Signs surve ()9】, aerospace & defense workforce studi (SPECIAL REPORT: Defense Companies Face Post-Pandemic Workforce Shortages) (SPECIAL REPORT: Defense Companies Face Post-Pandemic Workforce Shortages)7】, McKinsey and Deloitte insigh (Creating a modernized defense technology frontier | McKinsey) (2025 Aerospace and Defense Industry Outlook | Deloitte Insights)6】, National Defense Magazine reporti (FARNBOROUGH NEWS: New Report Urges Defense Industry to Secure Software Talent) (U.S. Desperately Needs Cyber Talent, Congress Says)7】, and compensation data from ClearanceJobs and B (High Compensation for Cleared Engineering and IT Jobs – Special Report - ClearanceJobs) ( Information Security Analysts : Occupational Outlook Handbook: : U.S. Bureau of Labor Statistics)9】. All data is recent (2022–2025) and reflects the current trajectory of the defense tech talent market. Hiring leaders can use these insights to prepare proactive talent strategies in anticipation of the continuing shifts in this critical sector.
