Changing markets – and the necessary adjustments in personnel
You will remember the headlines at the close of last year: “How much defence does Europe need?” or “Can Germany afford to weaken its defence industry?”.
The media speculated vigorously on the subject, and fears were widely peddled. Right on cue at the turn of the year, the tone changed; the new headlines read, for example: “German Armed Forces Association calls for armed drones to protect soldiers”.
Changing markets
The fact is: the defence technology industry is in a period of massive upheaval. The key developments of the recent past in particular have major implications for the future of the entire sector: smaller budgets, a marked decline in publicly funded research and development projects, increasing internationalisation of markets and changing threat scenarios for the armed forces. These are just some of the factors confronting the industry with ever new challenges.
Home markets will certainly remain attractive for the Western European defence industry. The industry’s real growth, however, is taking place outside these markets – above all in the Middle East, South America and Asia.
What is certain is that the global security situation will remain tense in the coming years and that the number of armed conflicts will continue to rise. It is also very certain that Western European armed forces will increasingly have to adapt to asymmetric threats and to the growing shift of operational theatres into urban environments. Likewise, cyber-warfare scenarios and causes of conflict such as the struggle for (rare) raw materials, water and food are moving further into the foreground. Ultimately this means new demands on the defence products used by the armed forces as well as on the ways in which they are used.
The technological and know-how lead of the Western European defence industry over countries such as Russia, South Korea, China, Brazil, India or Turkey will probably persist for years to come, but it also depends on the continued participation of European defence companies in multinational contracts. Indeed, many companies active in armaments and defence even expect rising revenues over the next ten years, a large share of which will in future be generated abroad.
Necessary adjustments
In our experience, many companies in the defence industry are not yet prepared – above all in the area of personnel – for the changes needed to increase competitiveness. The decisive challenge will, to an ever greater extent, be the targeted search for and recruitment of the “right” people. Consequently, recruitment processes must be made even more effective and efficient so that the availability of qualified staff is permanently secured for the future. Preserving and expanding the company’s “human capital” remains, like its technological know-how, a decisive strategic competitive factor.
Companies that include strategic cooperation with an executive search firm in their recruitment portfolio, and are thus able to fill even difficult vacancies, enjoy a clear competitive advantage. With increasing dynamism in the labour market, innovative personnel strategies are needed that support fast, well-founded decision-making. Placing job advertisements is often no longer effective; at this point we recommend the direct approach – (discreetly) approaching candidates, addressing and motivating them even if they are not currently interested in the open job market. Furthermore, selection procedures that involve great organisational effort cannot be deployed as promptly and flexibly as, for instance, a structured interview combined with aptitude-diagnostic methods – both provide a similarly valid basis for personnel selection.
Thorsten Schneider
Talk to us. connect@focus-defence.de · +49 30 5444 5899