The Geographic Talent Penalty and Why European Space Companies Need to Rethink Where Their People Work

European space investment grew by more than 600% in the first half of 2026. The talent pool did not grow with it, and location-based hiring policies are making it even smaller.

Why the European Space Industry Talent Shortage Is Getting Worse

Across Europe in H1 2026, €2.9 billion was raised across 33 funding rounds involving 30 companies. And many of those companies are looking for exactly the same talent. Systems Engineers. Product Assurance. AIT. RF. GNC. Flight Dynamics. Software. Cyber. Programme leadership. ESA alone has announced plans to recruit more than 500 new colleagues during 2026, across engineering, science, operations, IT and supporting functions. Programmes like IRIS² are creating demand across the entire supply chain.

When I work with companies on workforce strategy, these are some of the first questions I think we need to ask. Is the talent you need actually available in the country where you are hiring? If it is not, what is going to persuade someone to relocate? Do not just presume people will relocate when they can already work from their home country. Who else is competing for those skills? What does your employer value proposition look like against theirs?

And perhaps most importantly, does this person genuinely need to live near your office to perform the role successfully?

What Strategic Workforce Planning Means for Space Companies

This is where strategic workforce planning becomes increasingly important. It is not simply about filling today's vacancies. It is understanding the capabilities the business will need over the next two, three or five years, identifying where those skills exist, understanding where the gaps will emerge and designing a workforce model capable of accessing them.

I have spent more than 20 years recruiting across the global space industry and have also built and led international in-house Talent Acquisition functions. More recently, I have complemented that experience through the CIPD Strategic Workforce Planning Accredited Programme.

One thing I have learned is that recruitment problems are not always recruitment problems. Sometimes they are workforce design problems.

If you have just raised €50 million, €100 million or €300 million, the question is not simply "how many people do we need to recruit?" The questions should be far more specific. What capabilities will we need? When will we need them? Where does that talent exist? What will it cost? Which capabilities should we build internally? Which could be accessed through contractors, consultants, partners or an EOR? Which roles genuinely need to be onsite? And what needs to change in our employer proposition to attract the people our competitors are also trying to hire?

That is strategic workforce planning. And the organisations that start answering those questions before opening 50, 100 or 200 vacancies will put themselves in a considerably stronger position.

Why Remote and Hybrid Working Is Part of the Talent Solution for Space

I am not suggesting every role in the space industry can or should be remote. You cannot build, integrate and test a spacecraft from your kitchen table. There will always be roles where access to cleanrooms, laboratories, manufacturing facilities, hardware and test equipment makes onsite working essential.

But there are many others where we need to challenge whether location is genuinely a requirement or simply the way we have historically employed people. As I explored in remote hiring in the space industry, the most effective model is structured flexibility. Onsite where the work requires it. Hybrid where collaboration benefits from it. Remote where geography adds no meaningful value.

This is where I believe European space companies need to start thinking differently. Not remote-first. Talent-first.

How Employer of Record Models Are Changing Space Industry Recruitment

Remote's 2025 Global Workforce Report found that 55% of surveyed companies with international employees already use an Employer of Record, and 76% of leaders using EORs reported being satisfied with the model. An EOR allows an organisation to employ someone legally in another country without establishing its own legal entity there, while managing local employment contracts, payroll, tax, benefits and compliance. Europe's EOR market is forecast to grow from approximately $1.95 billion in 2026 to $3.33 billion by 2031.

Yet some European space companies are effectively still saying "our employees must live within commuting distance of our office."

What the Geographic Talent Penalty Looks Like in Practice

That location restriction creates what I call the Geographic Talent Penalty.

Imagine you need an experienced VP Sales with Earth observation experience who has sold into the European institutional space market. That is already a small European talent pool. Now add "must live within commuting distance of our office." How much smaller did that talent pool just become?

The workforce model should follow the capability the organisation needs rather than unnecessarily restricting capability because of where the organisation happens to have an office. EOR where the right person happens to live across a border. Relocation where there is a genuine business requirement for the person to be onsite.

How to Build a Workforce Strategy That Removes Geographic Barriers

The companies that navigate the next phase of European space growth successfully will be those that connect business strategy, workforce planning and talent acquisition. They are mapping capabilities against programme milestones, assessing which roles genuinely require physical presence, using EOR structures to access talent across borders, and building employer propositions that compete on mission and flexibility rather than proximity alone.

If you are a European space company that has recently raised capital, is preparing to scale for programmes such as IRIS², or knows significant hiring is coming but is not yet sure what talent you will need or how to access it, I would be very happy to have a conversation.

Because sometimes the answer is not to search harder. It is to make the talent pool bigger.

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