As less Defence contracts are up for offer and money pours into overseas acquisition, Australian primes and small to medium enterprises (SMEs) alike have had to reconsider their focus on a defence-based workforce.
The issue of national security has become a critical focus in Australia’s increasingly precarious strategic circumstances, yet 2023 brought a substantial fall in both Defence turnover and the workforce.
Previously ADM discussed the decline in Defence tenders due to the impact of the Defence Strategic Review. By looking at the turnover for this year, gathered through the ADM Top 40 Defence Contractors survey, it is evident that there are indeed fewer opportunities to share around Australia’s defence industry, and therefore fewer fulfilling positions in the workforce.
In 2023, total turnover decreased by 10.5 per cent – a drop after many years of continuous growth (with the exception of 2019), especially the 18 percent jump in total revenue from 2021 to 2022 (one of the largest ADM has ever recorded).
By comparing the Defence workforce to turnover it can be seen that this decrease impacted around 7,000 employees in defence industry, and considering several major companies declined to participate in the Top 40 survey last year, that number is likely higher. From a survey approaching 38,000 employees in 2022, that represents an 18 per cent decrease.
Although a drop in turnover necessitates a drop in workforce, the 2023 change is far steeper in the workforce. So where are all of these skilled employees going?
By mapping the Defence and non-Defence workforce percentages, the makeup of the defence industry workforce can be compared.
In 2023, there is a drop of approximately 6 per cent in the Defence workforce numbers, and only a 3 per cent rise in non-Defence, evidence suggesting that for every employee being reabsorbed into a non-Defence role, one is exiting defence industry altogether.
One of the top priorities over the past year has been centred around the creation and sustainment of a skilled workforce, considering some of the upcoming plans Defence has in place, including the AUKUS agreement.
However, the evidence of retention issues in the Defence workforce is not encouraging for people starting their careers and begs the question; is the defence industry no longer an employer of choice?
Note: The data shown is gathered from ADM’s Top 40 Defence Contractor submissions over the past seven years. Due to small changes in which companies are submitting data each year, there are likely to be some inconsistencies and this survey does not represent the entirety of the defence industry workforce.