The defense contracting sector is grappling with a workforce shift unlike any it has faced before. As Generation Z those born between 1997 and 2012 enters the job market in growing numbers, companies relying on security-cleared STEM professionals must rethink how they attract and retain talent. Few industry figures have addressed this challenge as deliberately as Margarita Howard, sole owner, CEO, and president of HX5, a service-disabled veteran and women-owned defense contractor headquartered in Florida.

A Company Built on Specialized Work

HX5 operates across 34 states and 90 government locations, employing more than 1,000 people who provide STEM-focused support services to NASA and the Department of Defense. That scale means Howard must continuously fill highly specialized roles requiring rare combinations of technical expertise, government agency experience, and willingness to complete lengthy security clearance processes.

Security clearance timelines put defense contractors at a structural disadvantage against commercial technology companies, which can hire qualified engineers quickly and often at higher salaries. The World Economic Forum found that 38% of Gen Z workers said they were likely to leave their jobs within a year. Howard has not ignored that statistic. Magarita Howard has worked to reshape HX5’s tools and culture to address what this generation wants while holding firm on the mission-driven standards that government work demands.

Adapting Without Compromising

Howard has introduced hybrid work models where security protocols allow it and modernized internal communications with instant messaging platforms and interactive project management tools. She is clear that flexibility has limits in her industry: security standards are non-negotiable and the deliberate pace of government contracting does not bend to expectations shaped by commercial software firms. Her pitch to prospective hires emphasizes the genuine excitement of supporting NASA programs and Department of Defense operations. Howard regularly tells recruits they should get up energized by the specific program they are supporting. That message, paired with meaningful modernization, has produced results. Some HX5 employees have stayed with the company for 15 years, a notable achievement in any generation. Refer to this article, for related information.

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Many government contractors starting out in the competitive federal market focus on looking the part: premium office space in the D.C. area, polished lobbies, high-end conference rooms. Margarita Howard rejected that logic when she founded HX5 in 2004. Her investment priorities went to operational systems specifically, a government-approved accounting platform purpose-built for contractors who work with federal agencies.

Prioritizing What Partners Actually Need

The calculus behind Margarita Howard’s choice had everything to do with what large prime contractors and government agencies actually look for in a teaming partner. Impressive offices do not pass billing audits. They do not demonstrate familiarity with government procurement documentation or compliance requirements. A government-reviewed accounting system does. “It was more important for us that we invest in things like a high-end accounting system that was built and developed specifically for companies who work with the government, and was government reviewed and approved,” Howard explained.

The investment paid dividends quickly. Large businesses evaluating HX5 as a potential subcontractor discovered that despite the company’s small size, it already operated with the same billing infrastructure those large firms used. That consistency eliminated a common objection to working with newer, smaller contractors. “That was one aspect that made HX5 very attractive to large businesses who were looking to partner with small businesses to meet their small business goals,” Howard noted, describing how the accounting investment worked as an indirect business development tool.

A Risk That Paid Off

Howard acknowledged the decision carried genuine risk. The SBA recommends investments like this to small contractors, but provides no guarantee they will generate returns. “It was a risk that we took and it highly paid off,” she said. For Margarita Howard and HX5, that risk produced a company now employing more than 1,000 professionals across 34 states and 90 government locations, supporting NASA, the Army, Navy, Air Force, and the General Services Administration. See related link for more information.

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