By Wes O’Donnell, Veteran U.S. Army and U.S. Air Force
This is the second article in our five-part series on solving the ongoing military recruiting crisis. In each article, I’ll explore a possible solution to the ongoing challenge. You can find part one here.
In the first part of this series on solving the ongoing military recruiting crisis, I looked at enhanced recruitment marketing as a possible solution. Let’s dive deeper and discuss military compensation and benefits.
Modernizing Compensation and Benefits
Modernizing compensation and benefits is a crucial step in addressing the military recruiting crisis. To attract and retain skilled recruits, armed forces must offer competitive and appealing packages that recognize the dedication and commitment required of military service.
Competitive Pay: Offering competitive salaries is essential for attracting talented individuals to military service. Pay scales should be commensurate with civilian counterparts, especially for specialized roles and technical expertise.
Competitive pay ensures that military service is financially rewarding and provides economic security for servicemembers and their families.
Of course, many of the benefits received while in the military are noncash and/or deferred compensation, like healthcare benefits, entertainment and gym access, and retirement pay. Recruiters already do a good job of communicating how these noncash benefits make military service as competitive as civilian sector jobs.
But pay increases more generally are always welcome and would go a long way in helping recruiters entice candidates away from the strong labor market.
Education and Training Benefits: Providing educational opportunities is a powerful incentive for potential recruits. Tuition assistance, scholarships, and grants for higher education can attract candidates seeking to further their academic and professional development while serving in the military. This benefit also helps transition veterans into high-paying civilian careers after their service.
Currently, Military Tuition Assistance (MilTA) funds up to $4,500 per year for courses leading to an undergraduate or graduate degree. The program pays up to 100% of the cost of tuition or expenses, up to a maximum of $250 per credit.
While this is a great start, active duty members must tap into their GI Bill (top-up) to cover high-cost courses or more expensive schools that regular MilTA doesn’t cover.
The DoD should boost the amount covered per semester hour. What’s more, in the Army, soldiers must have ten years of service to receive graduate-level TA if any portion of their undergraduate degree was paid through TA. Throw that rule out.
Retirement and Pension Plans: A robust retirement system with pension plans is essential to incentivize long-term commitment to military service. Offering retirement benefits after a certain number of years of service encourages retention and rewards dedication to the armed forces.
The current military retirement pay system is the Blended Retirement System (BRS). The BRS is available to service members who began their military service after January 1, 2018.
Under the BRS, service members receive 40% of their base pay after 20 years, plus a bonus of 2.5% of their annual base pay at 12 years. The BRS also enrolls service members in the Thrift Savings Plan, which includes automatic and matching Defense Department contributions.
The BRS uses the same retirement annuity formula as the previous system, but adjusts the 2.5% by half a percentage point, from 2.5 to 2%.
If you entered the military before September 1980, you are eligible for the Final Pay retirement system. Under this system, your retirement pay is your final base pay times 2.5% for every year of active duty.
But what about those servicemembers who only put in 10 years?
I propose offering servicemembers who leave after only 10 or 15 years a retirement also, albeit a lower percentage of their base pay. As it stands now, if you leave before twenty years, you’re on your own.
Of course, this may impact retention, but that’s what re-enlistment bonuses are for – to help mitigate mid-career individuals from jumping ship.
This policy forces servicemembers who may not actually want to stay in the military to “stick it out” and results in many “absentee” senior leaders.
Offering a pension for fewer years of service may increase recruiting. So, let’s say a servicemember who “retires” after 10 years of service gets 20% of her base pay and no matching contribution to the Thrift Savings Plan. Such a compromise may attract recruits and increase retention beyond the typical “first termers” who get out after their first contract expires.
Paid Time Off and Work-Life Balance: Providing adequate paid time off and promoting work-life balance is essential for ensuring the well-being and satisfaction of military personnel. Adequate leave and flexible work arrangements allow servicemembers to spend quality time with their families and recharge after demanding deployments or assignments.
The military already does a great job of providing 30 days of paid leave per year, which is well beyond most corporations in the civilian sector, which typically starts at two weeks.
Still, there is room for improvement.
Like their counterparts in the corporate world, servicemembers should not be charged leave on weekends or federal holidays.
Also, the military should allow servicemembers to sell back their unused leave annually if the servicemember wants or needs extra cash. As of right now, a servicemember can only sell back their terminal leave which is presently rated at 1/30 of your basic pay for each day of leave you sell back.
Incentive Programs: Incentive programs for specific roles or critical areas of expertise can attract talent to positions that require unique skill sets. This can include signing bonuses, retention bonuses, or other financial incentives.
In 2016, enlistment bonuses were as high as $40,000 for selected occupations. And while that’s great, the recruit actually sees only a portion of that after taxes.
The simple solution is to make enlistment bonuses tax-free.
It’s even been suggested that all active duty service, including stateside service, should be tax-free. Admittedly, that is an extreme step, but imagine the recruiting windfall! “If you join the Army, you won’t have to pay federal taxes for the next four years.”
Talk about incentivizing service!
Modernizing compensation and benefits is a key strategy to attract and retain skilled recruits in the military. By offering competitive pay, educational opportunities, comprehensive healthcare coverage, and family support programs, the armed forces can demonstrate their commitment to the well-being and professional development of their personnel.
Some people may ask how we would pay for this increased expenditure on personnel. The answer is simple: In 1972, approximately 40% of the military budget went to personnel. Today, that number is 24%. A single F-35A fighter costs $80 million – even more expensive for the Navy and Marine variants.
Shifting military funding to prioritize the recruiting crisis is essential.
Ultimately, modernizing compensation and benefits contributes to building a strong and capable military force ready to face the challenges of the future.
In the next part of our ongoing series, I’ll look at leveraging technology for recruitment outreach.