In the middle market of aerospace and defense, value is often attributed to inanimate things like machinery, intellectual property, and backlog. An overlooked, but an increasingly decisive asset, is people, particularly skilled employees like machinists, engineers, and technical sales staff. For aerospace companies, these employees are not easily replaceable, and in today’s labor market, they are becoming more scarce by the year.
Experienced aerospace employees capable of holding tight tolerances, working with complex concepts and materials, and operating within rigorous aerospace quality systems are in short supply. Years of underinvestment in vocational training, an aging workforce, and rising demand across defense and commercial aerospace programs have created a structural labor imbalance. Buyers recognize this reality and increasingly underwrite workforce depth with the same scrutiny applied to customer concentration or margin durability.
During sale processes today, buyers are focusing more and more on your skilled workforce. Buyers look beyond headcount to assess tenure, certification levels, and reliance on a small number of critical individuals. Businesses where critical knowledge or customer relationships reside with a handful of employees are flagged for key-person risk, often resulting in increased perceived risk and lower valuations.
Post-transaction, skilled employees are essential to continuity. They support on-time delivery, quality compliance, and successful integration, particularly when new owners seek to scale production or pursue new programs. Without a stable and trained workforce, growth plans quickly become far more challenging in today’s tight market for aerospace & defense skilled labor.
For sellers, the implication is clear: due to current market conditions, buyers are highly focused on assessing your workforce during due diligence. Proactive retention strategies and incentive alignment preserve leverage and protect value. If you are considering selling within the next 2-3 years, you should carefully evaluate your workforce and the tools available to you to continually train and retain your best people.
Have a great day!
Troy Medeiros
Vice President
