Navigating the Engineering Talent Shortage: Strategies for Employers in 2025

Is There a Shortage of Engineers?

For decades, there has been a steadily growing disparity between demand for skilled engineers and the talent pool, making filling these roles and retaining an experienced workforce difficult for businesses to manage.

That trend will continue in 2025. Even though engineering opportunity growth is not eye-watering at 4%, other factors have contributed to an engineering talent shortage. This stems from the number of engineers entering the workforce not outpacing retirees, the demand for specialized roles, and rapid changes in the industry. A 2023 study (by the National Association of Colleges and Employers (NACE)) concluded that 77% of employers had difficulty finding qualified engineering candidates.

The engineering talent shortage and talent mismatch are not limited to one particular type of engineering either. Fields such as software engineering, industrial engineering, civil engineering, and electrical engineering are particularly hard-hit, with many companies struggling to fill positions.

Key Factors Contributing to the Engineering Shortage

Supply and Demand: A 2023 study found that 25% or more of the engineering workforce plans on retiring within the next five years. This outpaces engineering graduates, which is at about 200,000 per year according to a 2022 report from the National Science Foundation.
Adopting New Technologies: With industries evolving and new technologies emerging there is a demand for new skills that are not covered in engineering curriculum. Businesses need engineers who can work with artificial intelligence, automation, and renewable energy but many are not specialized in these fields.

This creates a skills gap for engineers who, for example, need to be proficient in renewable energy and have energy-efficiency certifications but were not trained in environmental engineering.

Because of this, even with the demand for engineering jobs, there are a limited number of opportunities for new graduates. Many STEM graduates never pursue their careers because of the lack of entry-level opportunities and on-the-job training to fill the skill and knowledge gap.
Lack of training: Naturally with the increased number of retiring engineers and an evolving industry, it has put a strain on companies to provide proficient internal training and continued education for new hires and current team members.

Part of this is from pension payouts with big companies, where thousands of experienced engineers retire on short notice. This results in less expertise on their team to pass on knowledge, and opens opportunities for engineers from other companies to fill.

This lowers retention throughout the industry and puts more pressure on companies to fill the skill and experience gap when engineers retire or take a new job.
Geographic Disparities: Certain regions and industries have a greater demand for engineers, particularly in tech hubs like Silicon Valley or regions with strong manufacturing sectors. This geographic disparity can make it even harder to attract qualified talent because many engineers prefer to work in specific locations and are unwilling to relocate.
Competition with big tech: Tech giants can offer very appealing compensation plans, flexible work arrangements, give talented individuals the opportunity to work on cutting-edge projects, and provide professional notoriety. This enables them to attract the best talent in the country, and makes it hard for small businesses to attract specialized and highly skilled engineers.

How to Overcome the Engineering Talent Shortage

Despite the challenges, there are several strategies that employers can implement to overcome the engineering talent shortage and build strong engineering teams.

Strengthen your talent pipeline

There are many strategies you can utilize to attract highly qualified engineers to your team, including:

Ensuring HR and your hiring team understand engineering trends and skills team members need so they can be proactive and effective when looking for talent. You can also work with them to ensure onboarding is a smooth transition onto the team.
Join and participate in networking groups, associations, sponsorships, etc. to gain exposure and expand your professional network.
Attend, host, or sponsor engineering-related events like hackathons, coding challenges, tech expos, etc.
Returning to your alma mater and visiting technical or trade schools to guest speak, lecture, mentor students, or offer grants and scholarships is a great way to build relationships with the next generation of engineers.
You can also utilize their internship or coop programs to give students hands-on experience and an opportunity to evaluate their performance to potentially be hired when they graduate.
Leverage job boards, including LinkedIn or Indeed, or niche websites that cater to engineers looking for jobs.
Have an engaging career page on your website.
Create an employee referral program.

Reduce time to hire

One of the biggest contributing factors to a successful hire is how efficient and decisive you are in the interview process. Candidates expect the interview process to be 2-4 weeks before hearing a decision.

With the average interview process for technical roles like engineering being 30-40 or more days, making a hiring decision on the right candidate quickly increases your chances of them accepting an offer before going to a competitor.

This can be accomplished with many interviewing strategies, including:

Use an applicant tracking system (ATS) and automated skills tests to assess and qualify candidates for interviews efficiently.
Setting clear timelines and expectations with your hiring team and the candidate.
Phone and virtual interviews for initial screenings to streamline the interview process.
Host panel interviews to gain multiple perspectives in one meeting to avoid multiple one-on-one interviews.
Have fewer steps in the interview process.
Having a good talent pipeline so you can source and interview candidates within a tight time frame.
Schedule interviews in batches, with multiple on the same day if possible.
Provide a competitive and clear offer letter for faster candidate acceptance.

Consider changing job requirements

With the talent shortage, employers have been compromising their wants and needs to widen their options and find the right engineers for their team.

This includes considering remote or hybrid positions, which have become more popular in the engineering industry. In 2024, 56% of engineers were working from home, and 72% said they would consider taking a job if it was remote. Leveraging engineering professionals’ desires can be a great way to attract them to your team.

This can help not only find and retain local talent, but also connect with candidates around the country, which increases your chances of building and maintaining a strong engineering team.

Also, consider hiring talent from non-traditional educational institutions like boot camps or coding schools. These programs often provide highly skilled engineers in a shorter timeframe than traditional engineering degrees.

A recent study shows that 45% of LinkedIn jobs have removed the degree requirement, and 72% prioritize candidates’ skills and experience over degrees. That trend is expected to continue.

Have a solid retention plan

Invest in Internal Training and Development

Investing in the development of your current workforce is another effective strategy. Offering continuous training and upskilling programs will help your engineers keep pace with emerging technologies. This not only helps address the shortage of specific skills but also improves employee retention and satisfaction.

Cross-training employees from other departments (e.g., software engineers learning hardware skills) can create a more adaptable team and bridge skills gaps within the company as well.

Focus on Retention Strategies

Retaining your current employees is just as, if not more, important than hiring new engineers. The costs of recruitment, onboarding, and training typically cost more time and money than maintaining your existing workforce and should also be front of your mind as you think about managing and growing your team.

Things you could do to improve retention of your engineers include:

Offer competitive salaries and benefits
Offer flexible work arrangements
Provide career advancement opportunities
Give competitive raises and promotions
Facilitate a positive company culture

All of these points are crucial to retention. According to a 2024 TechRepublic survey, 83% of engineers are more likely to stay with a company that prioritizes their well-being and development.

Consider Alternative Talent Solutions

There are other engineering staffing solutions you could consider to supplement your internal recruiting efforts.

One could be hiring temporary contractors. This gives you the ability to address urgent hiring needs for projects or seasonal fluctuations without committing to permanent hires. Having contractors is also great for evaluating talent within a time period, where you can consider making a permanent position offer if a contractor does a great job.

You could also consider hiring a third-party recruiting agency to help you with talent acquisition and the recruiting process. Working with an engineering staffing agency does come with additional cost, but typically on the back end. Most staffing agencies work on a contingent basis, enabling you to have access to their talent pool and other resources without paying a dime unless an offer is accepted by your candidate.

The benefits of working with the right staffing agency who is specialized in your area of expertise usually outweigh the cost of services because they reduce turnover, cost to hire, training, and onboarding new hires, and increase retention.

Work with Hunter Recruiting

We know the engineering talent shortage presents unique challenges for businesses looking for engineering talent. Our talent pool of 1.2 million skilled candidates, short time to fill, and recruitment teams that work directly with engineers every day have enabled us to successfully fill engineering roles for Fortune 50 companies and small businesses throughout the United States.

If you want to learn more about how we can help you with recruiting and other staffing solutions, you can request talent or schedule a free consultation!