Europe’s aerospace and defence (A&D) sector is at a crossroads. As geopolitical tensions, economic shifts and rapid technological advances converge, HR leaders must navigate a landscape where pay, policy and talent strategy are being fundamentally redefined.
Drawing on the latest survey data, government reports and industry analyses, this article explores how compensation and workforce dynamics are evolving across the UK, France, Germany and Italy — and what this means for the future of the sector.
The European A&D industry is experiencing robust growth, turnover reached €343 billion in 2024, with 2025 estimated revenues up to €381 billion and projected to rise steadily through 2030. Germany, France, the UK and Italy together account for more than one-third of the region’s market value. The sector is being reshaped by:
Key takeaways:
UK A&D salaries are stabilizing after a period of high inflation, with pay progression steepest at senior levels. Entry-level professionals start at £36,000, rising to £130,000 for top experts; managers can earn up to £165,000 (Figure 1).
Regarding incentives and benefits, short-term incentives (STIs) and long-term incentives (LTIs) are increasingly important, especially for senior roles (Figure 2).
In the UK, there’s a renewed emphasis on future-proofing compensation programs and aligning rewards with strategic impact, especially as AI and automation reshape job roles.
French A&D salaries are stabilizing, with transparent pay practices (such as the Mandatory Gender Equality Index) and steady growth at management and professional levels. Group managers saw a 7% salary increase in 2025 (Figure 3).
Germany has overtaken the UK as the second-highest defence spender in NATO, with a 24% increase in defence expenditure in 2024. Salary growth is strongest at the start of the Management Career Band, alluding to a focus on early leadership. (Figure 4).
Italian A&D salaries are rising, especially for mid-level managers and professionals. The sector is seeing annual incentives growing steadily, especially at higher career levels (Figure 5).
AI is transforming every aspect of the A&D workforce — from operational efficiency and talent strategy to defence capabilities.
In the UK, AI-driven predictive maintenance and autonomous systems are reducing downtime and reshaping engineering roles. France and Italy are deploying AI in avionics and mission planning, creating demand for data scientists and algorithm specialists. Germany’s focus on AI-enabled smart manufacturing is redefining production workflows and requiring cross-disciplinary expertise.
For HR leaders, this means practical changes: Job descriptions must evolve to include digital competencies, pay structures need to reflect scarce AI skills, and learning programmes must prioritise continuous reskilling. AI assisted automated job levelling solutions are accelerating how organisations evaluate roles and maintain consistent, market aligned frameworks. AI is not just a technology shift — it’s a catalyst for redesigning workforce architecture and reward frameworks across Europe.
Europe’s A&D sector is navigating a period of profound change shaped by technological disruption, regulatory complexity and shifting geopolitical priorities.
In the UK, defence modernisation programmes are influencing pay structures, while France and Italy continue to inject funding into R&D to maintain global competitiveness. Germany’s focus on green technologies and digital transformation underscores the need for agile talent strategies.
For HR leaders, the challenge is to design compensation and workforce models that are competitive, resilient and future-focused. As AI, government policy and economic forces reshape the industry, those who adapt quickly will secure the ability to attract, retain and empower the next generation of talent across Europe.
Looking ahead, success will hinge on creating reward frameworks that balance innovation with compliance, while fostering a culture of adaptability. HR leaders must anticipate emerging skills gaps, embrace data-driven decision-making and align talent strategies with broader organisational objectives.
Collaboration across borders and sharing best practices will be critical to building a unified approach to workforce resilience. Ultimately, those who invest in agility today will define the competitive edge of tomorrow’s aerospace and defence industry.
