Setting Military Compensation To Support Recruitment Retention And Performance

Drawing on a large body of research, this RAND Arroyo report, part of a series, provides an examination of the role of military compensation as a strategic human resource tool, how well it fulfills that role, and how it could be improved.

The National Defense Authorization Act for Fiscal Year 2020 directed the Secretary of Defense to report on food insecurity among service members and their dependents. RAND researchers examined this directive and recommended other topics for analysis.

Every four years, the U.S. Department of Defense (DoD) commissions a review of the military compensation system. Since the 9th such commission reporting in 2002, the benchmark for setting the level of military pay has been at about the 70th percentile of earnings for similar civilians given the unusual demands and arduous nature of military service. The 70th percentile benchmark was based on analysis from the 1990s indicating that pay at around this level had historically been necessary to enable the military to recruit and retain the quality and quantity of personnel required. In addition, by law, the annual increase in military basic pay is guided by changes in the Employment Cost Index (ECI), a measure of the growth in private-sector employment costs; research from the early 1990s suggested that an alternative to the ECI, the Defense Employment Cost Index (DECI), would be more relevant to military personnel. The authors of this report provide input on the setting of the level of military pay, the relevance of the 70th percentile, and the use of the DECI versus the ECI in setting the annual adjustment to military pay. They find that current military pay may be too high, since recruit quality today exceeds DoD's stated requirements, and, further, quality and retention both exceed the levels observed during the late 1980s and mid-1990s, when the 70th percentile was established. However, the 70th percentile may be too low a benchmark, because there are reasons to believe that the recruiting environment is more difficult than it was in earlier periods. Figures of around the 75th to 80th percentile for enlisted personnel and of around the 75th percentile for officers are likely to meet existing recruit quality objectives. Assessing the ECI versus the DECI, the authors conclude DoD should consider replacing or supplanting the former with the latter. The DECI has several advantages over the ECI, and most of the critiques of the DECI have been addressed by advances in data availability and computing power in recent decades.

The purpose of this study is to develop a unified model that will permit an analysis of all the various issues relating to the military compensation system. This report develops a theoretical framework that allows an evaluation of the militarv pay and retirement system. Our analysis aims at addressing the traditional macroeconomic questions and two additional microeconomic questions that have received little attention: Does the system motivate personnel to work hard and effectively? and Does the system promote the best person/job/rank matches?

Recruiting an all-volunteer military is a formidable task. To successfully enlist one eligible recruit, the Army must contact approximately 120 young people. The National Research Council explores the various factors that will determine whether the military can realistically expect to recruit an adequate fighting force-one that will meet its upcoming needs. It also assesses the military's expected manpower needs and projects the numbers of youth who are likely to be available over the next 20 years to meet these needs. With clearly written text and useful graphics, Attitudes, Aptitudes, and Aspirations of American Youth offers an overview of important issues for military recruiters, touching on a number of important topics including: sex and race, education and aptitude, physical and moral attributes, and military life and working conditions. In addition, the book looks at how a potential recruit would approach the decision to enlist, considering personal, family, and social values, and the options for other employment or college. Building on the need to increase young Americans' "propensity to enlist," this book offers useful recommendations for increasing educational opportunities while in the service and for developing advertising strategies that include concepts of patriotism and duty to country. Of primary value to military policymakers, recruitment officers, and analysts, Attitudes, Aptitudes, and Aspirations of American Youth will also interest social scientists and policy makers interested in youth trends.