TABLE OF CONTENTS
Hardware is entering one of its most ambitious periods in decades. Investment is flowing into semiconductors, aerospace, robotics, energy, medical devices, advanced manufacturing, AI infrastructure, and other industries built around physical products. That’s amazing news.
But here’s the rub: all of those companies desperately need engineers.
The U.S. Bureau of Labor Statistics projects employment for computer hardware engineers to grow 9% from 2025 to 2035, three times the projected average for all occupations. Approximately 4,100 openings are expected each year. Likewise, employment for electrical and electronics engineers is projected to grow 8%, producing an estimated 16,300 annual openings.
The problem is that the supply of qualified engineers is not keeping pace with the specificity of that demand. Hardware companies are not simply looking for electrical, mechanical, or systems engineers. They increasingly want candidates with precise combinations of industry experience, technical specialization, software knowledge, manufacturing familiarity, and proficiency in particular tools.
And that creates a difficult cycle. Companies compete for the same small group of experienced specialists while investing less in the junior engineers who could become tomorrow’s specialists (which is a whole issue in itself). Searches take longer, compensation rises (it’s a good time to be a hardware engineer!), existing teams absorb more work, and retaining the people already inside the company becomes even more important.
The companies that build the strongest engineering organizations in 2027 will not necessarily be those with the largest recruiting budgets. They will most likely be the ones that rethink whom they hire, how they develop people, what kind of environment engineers work in, and how product knowledge is preserved when someone eventually moves on.
Key Takeaways
- Demand for hardware engineers is growing, but many employers are shrinking their own candidate pools by looking for exact-match specialists.
- Training, internships, university partnerships, and skills-based hiring can create stronger talent pipelines than repeatedly competing for the same senior candidates.
- Retention depends on more than salary. Management quality, realistic workloads, technical growth, meaningful work, and respectful culture all influence whether engineers stay.
- Some turnover is inevitable. Hardware companies need systems that preserve product decisions and engineering history when employees leave.
Why Talent Acquisition in Hardware Is Hard, and Getting Harder
More industries are competing for the same engineers
It’s a bonanza. Semiconductor companies, aerospace startups, defense contractors, automotive companies, robotics teams, medical-device manufacturers, energy businesses, and AI infrastructure providers all need bodies.
Take the semiconductor sector. McKinsey estimates that more than 160,000 U.S. semiconductor engineering and technician positions will need to be filled as the industry expands. Depending on how successful current workforce programs prove to be, the resulting talent gap could reach between 59,000 and 146,000 workers by 2029.
This tight competition extends beyond traditional engineering disciplines. Modern hardware development increasingly depends on embedded software, automation, simulation, cybersecurity, and connected manufacturing systems. As you might have guessed, that combination of skills is difficult to find. In Deloitte’s 2025 Smart Manufacturing Survey, between 69% and 72% of manufacturers reported moderate-to-significant difficulty hiring skilled workers across technology-focused areas.
In short, everyone needs a super senior engineer right now. Speaking of which…
Companies are looking for “unicorn” candidates
Rob Kukla, an experienced hardware engineer currently at HavocAI who has worked in both large organizations and startups, sees specialization as one of the central problems in hardware hiring. Duro was fortunate to speak with Kukla for this article.
“There are a lot of people that are looking,” Kukla said. “But finding the appropriate specialization for different needs” is much harder.
He recalled searches for electrical engineers who also needed RF experience, microcontroller programming, Python, and other specialized capabilities. Candidates with all of those qualifications exist, but only after following particular career paths. Requiring the entire combination immediately reduces a large applicant pool to a rare few.
“There seems to be less of an appetite to bring in young people and train them to be what is needed,” Kukla said. “There is more of an interest in simply paying for people to be that right now.”
That approach can make sense when a startup needs a critical capability immediately. It becomes less sustainable when nearly every company adopts it.
Likewise, Julia Mitchell, a systems engineering team lead at Australian space technology company QuantX Labs, said some openings at her organization attracted hundreds of applicants. Yet one particularly specialized role remained open for four or five months before the team identified a promising candidate. We were lucky enough to also speak with Mitchell for this article.
“It’s really hard to get people with the right knowledge and experience here,” Mitchell said.
Geography constrains the talent pool
Hardware also faces a limitation that many software companies can partially avoid: physical work still requires physical access.
Engineers may need to use a laboratory, handle prototypes, operate test equipment, visit suppliers, support a production line, or work inside a cleanroom. Even when design work can be performed remotely, successful development often depends on close interaction with the people building and testing the product. Boots on the ground means boots on the ground. For example, Mitchell said QuantX Labs has chosen to keep most of its team in the office because it values in-person collaboration.
In the US, engineering startups are concentrated in just a handful of cities. While the pool of talent may be overall larger, asking senior engineers to cross coasts can often be a nonstarter.
Salary matters, but it is not the only differentiator
Smaller hardware companies often compete against defense contractors, established semiconductor companies, and large technology organizations with much deeper compensation budgets.
Mitchell said QuantX Labs competes by emphasizing what makes its work unusual: optical physics, space technology, and the opportunity to contribute to products that few other organizations are building.
That distinction matters. Experienced engineers care about compensation, but many also care about technical ownership, meaningful problems, modern tools, autonomy, and the ability to see their work become a real product. But when it comes to competing for talent, money talks.
The early-career pipeline lacks depth
The industry’s demand for experienced talent would be less severe if more companies consistently developed junior engineers. And while internships and cooperative education programs should help fill that role, the quality and depth of these experiences vary considerably.
Kukla said he completed solid internships lasting approximately six months earlier in his career. More recently, he has seen interns spend just ten weeks rotating through several groups. Those programs may offer broad exposure, but they give students little time to understand a difficult problem, make a meaningful contribution, and experience the results of their decisions. That’s not a great way to foster a depth of talent and expertise.
Mitchell’s company takes a deliberately selective approach. It limits the number of interns it accepts so the team has enough time to provide a worthwhile experience.
“We want to be able to have the time to do a quality experience for somebody,” she said.
That is a useful standard. A strong internship is not measured by how many students cycle through the building. It gives an aspiring engineer a mentor, a bounded but meaningful problem, and enough continuity to learn how real hardware development works. Yet few companies, be it the lack of resources or will, have such robust internship programs in place.
Retaining Hardware Talent Is Just as Hard
Recruiting receives more visible attention because an empty role creates an obvious problem. Retention problems develop more quietly. Workloads increase, managers lose contact with their teams, development opportunities disappear, and valuable engineers gradually conclude that another organization would offer a better environment.
Experienced engineers have options
Engineers with knowledge spanning hardware, software, systems, testing, and manufacturing can move between several growing industries. A systems engineer working in aerospace may also be attractive to a robotics company. An electrical engineer with RF experience may find opportunities in telecommunications, defense, medical devices, or semiconductor equipment.
Now every hardware company is competing with every other company that can use similar technical abilities.
Salary remains important, particularly when inflation and competition increase market rates. But compensation alone rarely fixes an environment in which engineers feel overworked, poorly managed, or unable to grow.
Managers determine how engineers experience pressure
Kukla repeatedly returned to management when discussing why talented employees leave. He referenced the axiom that “people don’t leave companies; they leave managers.”
Engineering is stressful (news flash!). Products must launch, budgets are always lacking, and unexpected problems always seem to pop up at the worst times. The retention problem begins when managers treat every delay or technical dependency as an individual failure.
Kukla described seeing tasks accumulate when engineers were blocked by other people or systems. To combat this, he said the best managers recognized the constraint, rearranged priorities, and explained why timelines needed to move. Without that intervention, employees (particularly more junior ones) were more likely to leave.
This problem extends well beyond hardware. Gallup reported in 2026 that global employee engagement had declined for a second consecutive year, with much of the deterioration attributable to falling manager engagement. Because managers are the primary way many employees experience an organization, Gallup recommends prioritizing how managers are selected, trained, and supported.
If not, well, it all leads to…
Constant urgency becomes burnout
Hardware development is Murphy’s Law in practice. Components become unavailable. A prototype fails. Certification takes longer than expected. A supplier misses a date. A late discovery forces another design iteration.
If leadership builds a schedule that assumes every uncertain variable will go right, it’s the engineers who have to absorb the difference through overtime and stress.
Kukla described working extremely long hours while still loving the underlying engineering. The issue, as he framed it, was not necessarily the work itself. It was the stress of enduring constant changes in the product(s) and still being asked whether everything could be completed on time and on budget.
There will always be intense periods before a prototype build or product release. The danger is allowing emergency mode to become the company’s permanent operating model.
How to Find, Hire, and Retain Hardware Engineering Talent in 2027
The hardware talent shortage isn’t going to be resolved by a single recruiting breakthrough. To hire and retain talent in 2027 and beyond, companies need a connected strategy covering hiring criteria, education, management, culture, and knowledge continuity.
1. Stop hiring only for perfect matches
Start by separating the qualifications that are essential on day one from those that can be learned.
A highly regulated or technically specialized role may have legitimate non-negotiable requirements. But many job descriptions accumulate preferences until they describe a candidate who barely exists. When every qualification is treated as mandatory, adaptable engineers with strong adjacent experience never enter the process.
Evaluate candidates for technical fundamentals, judgment, curiosity, and evidence that they can learn. Look beyond identical job titles and consider people from neighboring industries with transferable experience.
McKinsey recommends that semiconductor companies expand beyond their traditional pipelines by considering talent from adjacent fields, veterans, workforce reentrants, immigrant communities, and other groups with relevant capabilities. Hardware companies outside the semiconductor industry can apply the same principle.
2. Test how candidates think
Traditional technical interviews often reward preparation for the interview itself, like having a shiny portfolio. Kukla is more interested in whether candidates can analyze unfamiliar information and produce a useful response. In real product development, he explained, someone may hand an engineer a rough idea and ask, “Can you make this happen?”
A practical interview should therefore give candidates a realistic but bounded problem. Ask what information they would need, which assumptions concern them, how they would test the idea, and what risks they would investigate first.
The goal is to reveal how the candidate thinks, moving from ambiguity toward understanding and a solution.
3. Build university relationships before positions open
QuantX Labs benefits from a close relationship with Adelaide University, where the company’s underlying technology originated and many employees studied. Students nearby are familiar with the company and can see a path from university work into a hardware career.
Other companies can build similar pipelines by sponsoring capstone projects, hosting laboratory tours, supporting student engineering teams, offering co-op placements, and sending working engineers to speak with students.
These relationships should exist before an urgent opening appears. A company that consistently engages with a university community becomes a familiar destination for graduates instead of another unfamiliar name on a job board.
4. Design internships for depth
Give each intern a mentor, a clearly scoped problem, and an outcome the student can own. If the program is short, avoid rotating the intern so frequently that every assignment ends during onboarding.
Longer co-op arrangements can be especially valuable in hardware because students have time to see a design move into prototyping, testing, or manufacturing. When longer programs are not possible, fewer high-quality internships may be more useful than a larger program without sufficient support.
5. Give engineers a specific reason to join
Compensation is a given, but it shouldn’t be the entire employer value proposition.
Explain what an engineer will actually own. Describe the product, the technical problems, the tools, and the decisions the person will influence. Show how closely engineering works with testing, manufacturing, customers, and leadership. Lay out the vision of what the company and product will do to impact the world.
The promise of interesting work helped Mitchell’s company compete against defense employers. Smaller hardware companies can often offer engineers more breadth and ownership than a much larger organization. Those advantages should always be front and center throughout the recruiting process.
6. Make hiring more human
Both Mitchell and Kukla emphasized the importance of personal effort and direct relationships.
Mitchell advised candidates to tailor their applications to the position and explain why they are interested in the company, particularly when attempting to move into a new discipline. A generic resume may list relevant capabilities without telling the hiring team why the candidate fits the actual role.
Kukla recommends building relationships with people inside the industry rather than relying exclusively on automated applications.
For companies, this means ensuring the AI software reading resumes doesn’t remove the human element from hiring. Employee referrals, university relationships, professional communities, and direct conversations can reveal candidates who do not rank well in an automated keyword screen but might thrive on the team.
7. Create visible paths for technical growth
Show employees how they can progress over the next several years. Offer senior individual-contributor positions as well as management opportunities. Provide time for training, mentorship, certifications, cross-functional work, and proficiency with new tools.
Engineers should be able to broaden their capabilities without leaving the company. That makes the organization more resilient while making each employee’s career more resilient too.
8. Define culture through behavior
“People are really respectful [at QuantX Labs],” Mitchell said. “We don’t raise voices. We don’t talk over each other.” Team members are encouraged to approach questions with curiosity instead of judgment and to work toward a shared goal.
“Culture” is often described through abstract words such as innovative, collaborative, or fast-paced. Engineers experience it more concretely. Can they question a technical assumption without being dismissed? Can they admit that a test failed? Will another department help solve the problem or look for someone to blame? Does leadership reward documentation and mentorship, or only last-minute heroics?
For companies that can’t offer the highest salary in the market, a respectful environment and compelling technical mission can become genuine competitive advantages.
Your Backup Retention Plan: Retain Product Knowledge
Despite it all, turnover is inevitable. People relocate, change careers, retire, or accept opportunities elsewhere. And if you can’t keep your people, make sure you can keep your knowledge.
Hardware knowledge is especially vulnerable because products can remain active for years. A departing engineer may be the only person who remembers why a component was selected, why an alternative failed testing, how a supplier exception was resolved, or what prompted a specification change.
If that context lives in inboxes, local files, spreadsheets, and memory, hiring a replacement does not restore it.
This is where product lifecycle management (PLM) becomes part of a broader talent-resilience strategy. A PLM system creates a shared record of product structures, revisions, change orders, approvals, documents, and the decisions surrounding them. Instead of reconstructing the past from scattered files, a new engineer can see what changed, who approved it, and why.
Duro centralizes that product information and connects it across the hardware lifecycle. While it can’t replace the expertise of an experienced employee, it can ensure that the work and knowledge the employee contributed remain available to the rest of the team.
The Talent Shortage Isn’t Going Away
Hardware companies can’t hire their way out of a systemic talent shortage while refusing to develop the next generation of engineers, and there are only so many unicorns out there to snag.
The strongest talent strategies will combine broader hiring criteria, meaningful internships, university partnerships, effective managers, sustainable workloads, technical growth, and a culture grounded in respect. They’ll also recognize that retaining knowledge is different from retaining every employee.
While the immediate goal is to fill an open position, the larger and more sustainable goal will be to build an engineering organization where talented people can grow, make good decisions, and eventually leave the product (and the company’s collective knowledge) stronger than they found it.
About the Author
Content Marketing & Product Marketing Lead
Robert Woo brings experience across content strategy, product marketing, SaaS, and technology startups. As Content Marketing & Product Marketing Lead at Duro, he develops content that makes complex hardware and software topics easier to understand for technical and business audiences.
Robert regularly works with engineering teams, customers, and subject-matter experts to turn technical conversations into practical, accessible content. His expertise spans B2B technology, SaaS, product marketing, content strategy, and startup marketing. Outside of work, he enjoys retro gaming and comedy.
Areas of expertise:
SaaS · Tech Startups · Product Marketing · Content Marketing · B2B Technology · Technical Content · Content Strategy
About the Author
