A significant increase in investment but a continued skills shortage: What does it mean for UK defence?

In early 2025, the UK Government announced the most significant and sustained increase in defence spending since the Cold War. This strategic boost aims to raise defence investment from 2.3% to 2.5% of GDP by 2027, with aspirations of reaching 3% in the next parliamentary term. While this investment is set to transform the nation’s defence capabilities, it also brings a critical challenge into sharper focus: the ongoing shortage of skilled talent in the sector.

For the defence industry, the uptick in funding means a surge in ambitious projects, modernisation efforts, and innovation in critical technologies such as cyber defence, AI, and autonomous systems. However, none of this can happen without the right people. We caught up with Alicia Haddock, Lead Account Manager for Insignis and aerospace and defence market staffing expert. She believes that, “Talent acquisition has now become just as important as technological advancement for the industry.”

Companies like BAE Systems and Babcock are leading the charge, focused on expanding their workforces to meet this new demand. In 2025 alone, BAE plans to hire more than 2,400 early-careers professionals, including apprentices, undergraduates and graduates, while Babcock is investing in nearly 1,500 new roles at these levels. This focus on early-career recruitment is a smart long-term move, but it doesn’t address the immediate skill shortages at mid and senior levels.

• In 2023-24, defence spending by the UK Government supported over 430,000 jobs across the UK, the equivalent to 1 in every 60.
• This year’s defence budget alone saw a £3 billion increase on the previous financial year.
• The substantial investment announced will drive R&D and innovation across the UK, positively impacting AI and quantum technologies and space capabilities.
• The strategy aims to increase defence sector jobs across the UK and make the industry a cornerstone of the nation’s economic renewal.

According to Adam, there simply aren’t enough experienced engineers, project managers or technical specialists available to support the pace of current defence initiatives. “This is a structural issue,” he explains “It’s been brewing for years due to underinvestment in STEM education, an ageing workforce, and increasing global demand for technical skills.”

The result? A highly competitive labour market where defence employers are vying for talent not just with each other, but also with adjacent industries like aerospace, tech and energy. Salaries are rising, counteroffers are becoming more common, and employers are under pressure to strengthen their employee value propositions. This includes more than just pay; it’s about offering career development, flexible working models, and a sense of mission and purpose.

For businesses across the defence ecosystem, from primes to specialist consultancies, the message is clear: attracting and retaining talent is now mission-critical. Companies that fail to build effective workforce strategies risk falling behind, regardless of how much investment they have to deploy.

At the same time, this presents a tremendous opportunity for professionals. Candidates with transferable skills, particularly from industries like aviation, automotive and IT, are increasingly being welcomed into defence. With a broadening scope of roles and record-level investment, the sector is more open than ever to new entrants looking to make a difference.

In this climate, Adam has noted that the appreciation for expert recruiters has become more evident. “Attracting the right talent requires not only an understanding of the technical requirements of a role but also navigating the complex motivations of a candidate pool in high demand,” he explains.

“Whether you’re a hiring manager racing to build a new or stronger team or a candidate seeking purpose-driven work, navigating this fast-evolving landscape requires insight, agility and the right partner.”