Not Cleared for Takeoff

With many countries pouring more into military budgets, it would seem to be a great time for defense companies. But there is just one hitch: security clearance.

Defense companies are facing a key talent crunch when it comes to “cleared workers,” or those with specified levels of security clearance for government work. Getting clearance for talent, where costs can run from $5,000 to more than $10,000 per employee, requires a “need to know” as defined by the government; the more classified the work, the more scrutiny is applied for clearance.

“The current system for the way the defense industry hires, trains, and develops cleared talent isn’t efficient,” says Jon Barney, a senior client partner with Korn Ferry’s Industrials practice who specializes in aerospace and defense. “Companies are bidding on projects and their only asset is people. So if you can’t get the qualified people you need, then you can’t bid on a program. Or, if you win a program, then you may fail to deliver.” Put another way, the clearing process isn’t keeping up with the workload. Low unemployment, more open positions than people to fill them, and other labor market conditions are further compounding the problem.

The cleared talent crunch comes as the United States and other countries have increased defense budgets in the face of rising global security issues, creating new growth opportunities for organizations. But the rigid workplace conditions required for a classified position, among them having smartphones and other personal mobile devices secured and inaccessible during the workday, is creating a recruitment and retention challenge. “It’s hard to tell younger talent they can’t bring their phones into the workplace,” says Chris McGee, a senior client partner with Korn Ferry in Washington, DC.

Untethering people from their devices is only one factor that is contributing to the cleared talent crunch. Another factor is the low pay of government work compared to commercial work. Still another is that much of the work is immobile, meaning working from home is not an option and working remotely from another location is rare. The government isn’t helping matters much either—there is currently a backlog of more than 650,000 workers waiting to be cleared.

What’s more, many large tech firms, including Amazon, are now in a pitched battle for government contracts too. All of which, Barney says, is only going to increase the difficulty in recruiting and retaining cleared talent, and it is bound to get worse. Defense companies and the government are also well aware of the challenge. Both sides have been taking steps to help remedy it, such as collaborating on training programs, partnering with colleges and other schools on STEM programs, offering bonuses to cleared talent to stay on projects longer, and more.

While these steps are more aligned with current market conditions, Barney says more needs to be done. “The question is if companies and the government can adjust the process fast enough to keep up with the workforce of today.”