Attrition: Bonuses Bounce Back

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June 23, 2017: The U.S. military is seeking more money for recruiting bonuses because they have been ordered to halt the personnel reductions of the last eight years and increase recruiting. Bonuses had to be used to get existing troops to remain in uniform as well as to attract qualified candidates to expand the force more than ten percent.

The bonuses are more effective than ever because between 2008 and 2010 there were major changes in recruiting methods, and the use of bonuses, because fewer personnel were needed and it was expensive to keep the people you needed the most and attract qualified new recruits. Moreover the unemployment is lower now and that means it is not as easy to get or keep the people you need.

Bonuses work. In 2010 the U.S. military adopted a new bonus system for scarce medical and other technical specialists. The new program enabled the military to pay market rates for specialties like brain surgery and Internet security. In the past, the bonus program was not directly linked to the market salaries for needed specialists, who would not join and work for existing pay levels linked to rank and time in the service. In many cases, where specialists were needed for a short time, qualified civilians were hired. This specialist shortage has been a growing problem, including for purely military specialists. Currently, the military spends about half a billion dollars a year for bonuses, although during the height of the Iraq war, it was over a billion dollars a year.

In wartime, with an all-volunteer force, bonuses were paid just to get recruits for all sorts of jobs. But after 2008 the army (which paid most of these bonuses) sharply cut back on its enlistment, and re-enlistment bonus program, mainly because the economic recession reduced the competition recruiters get from civilian employers. The bonuses quickly slid back to their pre-Iraq (2003) levels.

But in some areas, there were no cuts. After 2005, the U.S. Department of Defense has paid over $100 million in retention bonuses to nearly 2,000 experienced Special Operations personnel. Most of those getting the bonuses were Special Forces and SEAL personnel who were eligible for retirement. Many were being offered high paying civilian security jobs or wanted to retire simply because it would be an opportunity to relax. 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 has been used more aggressively after 2001, 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.

The recession fueled boom in enlistments has allowed the army to raise its recruiting standards again. In 2008, recruiting standards had been lowered and screening methods improved. Before the fighting in Iraq got bloody (2004-7), less than ten percent of army recruits had been high school dropouts. But during that period, that has grown to 24 percent, with no noticeable decline in the quality of troops. Same thing with those receiving "moral waivers" (for having a police record). That has gone from 4.6 percent six years ago, to 6.2 percent in 2007. Since 2010 all those standards returned to the pre-2003 levels and some have been increased.

But as the army raises the bar for new recruits, and existing troops to stay in, they again encounter an ancient problem; whether to hang on to combat proven veterans who are troublesome in peacetime. It's long been known that some soldiers, who appear to have attitude and discipline problems in peacetime, turn out to be exceptional performers in combat. Commanders can take the easy way out, and discharge these guys at the first sign of trouble. Or, mindful of how valuable these wild men are in combat, go the extra mile to hang on to them. The army and marines don't like to even admit people like this exist. But combat veterans, especially those who make a career of the military, know the problem, or opportunity, is real.

And then there was another oddity. During 2004-7, the army has had the most problems recruiting troops for non-combat jobs. Patriotism, low casualties, and a sense of adventure brings in plenty of recruits for the infantry. But with support jobs, the army is competing with the civilian economy. And this is where the new bonuses come in. As the military adds more technology faster, there is a need for more skilled people to maintain, and even operate (as in large computer networks) the stuff. If the military doesn't pay market rate, it doesn't get the people it needs to win on the battlefield.

 


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