Attrition: The Power of Cash

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January11, 2007: Last year, the U.S. Army got 80,000 new recruits, while 64,000 troops who had completed their service, re-enlisted. But to get that many troops to re-enlist, the army paid out $623 million in "retention bonuses." The army uses the bonuses to encourage troops in some job specialties (where there are shortages) to stay in. Sometimes, responding to, say, unfavorable media coverage, additional bonuses will be added. For example, the new, Democratic party controlled Congress just began its new term with a lot of criticism of the war. This is not good for the morale of the troops. So the army is offering an additional "signing bonus" (of up to $7,500) for any soldier getting out between now and the end of April, if they re-enlist before then. For example, an infantryman, with the rank of Specialist (E-4), finishing a four year enlistment, could increase his re-enlistment bonus from $10,000 to $17,500, by signing up for another four years. This would tempt the soldier to stay in for twenty years (to qualify for a half pay pension), because at the end of eight years he might be E-6, or even an officer (via Officer Candidate School).

The army has found that money does matter, and has become quite expert at avoiding shortages in key skill areas by adjusting the re-enlistment bonuses. It's cheaper to spend money on these bonuses, than it is to recruit a civilian, and go to all the time and expense to create a soldier of equal skill and experience. Moreover, keeping more soldiers in the military as a career provides more experienced NCOs and officers. That superior leadership makes all the difference when you are in combat.

 


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