Attrition: Paying The Going Rate

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February 13, 2010:  The U.S. Army is offering reenlistment bonuses of up to $150,000 for Special Forces veterans who agree to stay. Other soldiers eligible for bonuses of $100,000 or more include those who can crack codes in Arabic or Iranian (Farsi), manage large power plants (the army needs a lot more juice these days), operate and maintain satellite communications, carry out psychological operatives, supervise civil affairs programs and take care of EOD (Explosives Ordnance Disposal). The big bucks go to senior NCOs who can not only do the work, but train and supervise others to do their technical jobs. A lot more troops used to get reenlistment bonuses, but things have changed.

Last year, the U.S. Army, overwhelmed with new recruits, and existing troops wanting to stay in, eliminated nearly all re-enlistment bonuses. About a year ago, the army sharply cut back on its enlistment, and re-enlistment bonus program, mainly because the economic recession reduced the competition recruiters get from civilian employers. In general, the bonuses are quickly sliding back to their pre-Iraq levels ($300 million a year), versus the billion plus dollars spent in 2008.

But in one area, there will be no cuts. In the last few years, the U.S. Department of Defense has paid over $100 million in retention bonuses to nearly 2,000 experienced Special Operations operators. Most of those getting the bonuses were Special Forces and SEAL personnel who were eligible for retirement, and being offered high paying civilian security jobs, or simply the prospect of relaxing. Appeals to patriotism, and bonuses of up to $150,000, persuaded most of those operators to stay in uniform. This was a bargain for the government, as well as for troops in question.

It would cost millions of dollars, and nearly a decade of effort, to replace each of those twenty year vets. Bonuses of under $100,000 worked for troops not yet eligible for the half-pay pension. Most of the billions in bonus money goes to a small number of specialists, like Special Forces, SEALs, explosives disposal (they deal with roadside bombs), intelligence and electronics specialists.

The bonus program has been around for decades, but as been used more aggressively in the last decade, as the civilian economy boomed, and increasingly saw highly skilled military personnel as potential hires. Recruiters, while not admitting it, look forward to an occasional recession, to take the heat off.