The military can’t compete dollar-for-dollar against the lavish salaries that its private-sector competitors offer to military-trained personnel. Out of necessity, the Army has developed another retention strategy, one that depends upon the power of values, loyalty and long-term benefits rather than lavish salary offers. It’s a model that some companies in the private sector may want to emulate as an alternative to costly bidding wars to retain their talent.
Among the most valuable members of the military are the U.S. Army Special Operations Command’s soldiers. From capturing al-Qaida operatives to handing out humanitarian aid to Afghan villagers, they are the lead warriors in America's overseas military operations.
The 26,000-member command--which includes the 75th Ranger Regiment and the Army Special Forces, usually referred to as the Green Berets, in addition to aviation, civil affairs and psychological operations units--is in many ways similar to a top-performing private-sector company. It's staffed with the best-qualified, most extensively trained, highest-performing talent around.
Unfortunately for the Pentagon, the Special Operations Command bears another similarity to top companies. Competitors--in this case, private firms that contract to provide security services overseas--are eager to hire away the 26,000-soldier talent base that Special Operations has worked long and hard to develop.
The problem is partly one of the government's own making. The Pentagon’s strategy of sending a relatively small occupation force into Iraq--only about a third of the nearly half-million troops who were stationed in Vietnam at the height of that conflict--has led it to outsource many security functions that in the past might have been performed by soldiers. Baghdad’s international airport, for example, is guarded by a private security contractor rather than the U.S. military. According to a July 2005 report by the Government Accountability Office, Congress’ investigative arm, various U.S. government agencies paid private contractors $8.6 million last year for security in Iraq.
According to the GAO, companies are offering Special Forces personnel as much as $400,000 a year--more than five times the top salary they could earn in the military--to sign up for private security work in Iraq. A June 2005 Congressional Research Service report concluded that U.S. Army Special Forces units are operating below their authorized manpower at least partly as a result of personnel leaving for higher-paying jobs in the private sector.
"These guys can feel the insecurity of the market," says Ted Daywalt, a retired Navy captain who is president and CEO of Vetjobs.com, a Web site that helps companies find ex-service members to fill jobs. "They’re going to worry that the $200,000 offer isn’t going to be there forever. They can make as much money in a few years as they did in their entire military career. It’s hard to resist."
Retiring from the military and joining a private security contractor can provide an economic windfall for Special Forces soldiers, but it’s costly for the U.S. military. Even though the Army slightly exceeded its goal of recruiting 1,600 new Special Forces soldiers in 2004, the elite fighters aren’t easy to replace. Recruited mostly from other Army units, they undergo 18 to 24 months of language classes and other special training, two years of on-the-job learning, and six to eight years more to hone their specialized skills before they’re optimally prepared for high-stakes, high-risk missions.
The service has adopted a multipronged retention strategy that has parallels to the private sector.
Adjust your business strategy so that you don’t burn out your best talent. What the private sector calls productivity, the military calls "Optempo"--that is, the number of operations and hours in the field that military personnel must put in. Special Operations’ Optempo rose in 2002 and 2003 with the occupation of Afghanistan and the invasion of Iraq.
"Optempo really is a crucial factor," Daywalt says. "In the Army, they’re being deployed for a year, coming back for a few weeks, and then being deployed again. It’s just too much to put on the soldiers, especially now that most of them are older and have families."
To keep from wearing out its elite troops, the Pentagon changed its long-standing practice of having Special Operations units specialize in certain parts of the world. This increased the number of personnel able to rotate in and out of Iraq and Afghanistan.
As a result--and despite the continued fighting in both countries--Special Operations actually decreased the portion of its personnel on active deployment by 13 percent and stuck to three- and four-month active duty deployments, followed by rest and retraining, according to congressional testimony. Private-sector employers might adopt some variation of that formula by giving their top performers opportunities to recharge for a few months with less challenging duties before taking on another high-pressure assignment.
Instead of getting in a bidding war, beat your competition to the punch. The Army can’t hope to compete with the salaries offered by private contractors, and it hasn’t tried to. Instead, the Pentagon wisely has opted to sweeten the pot just enough that the discrepancy between private offers and Special Operations’ pay won’t seem so glaring.
In late 2004 the military began its Critical Skills Retention Bonus program, which offers 20-year special operations personnel in the Army, Navy and Air Force payments ranging from $8,000 for a one-year service extension to $150,000 for six years. If a service member is deployed in a combat zone when the bonus is paid, the money is tax-free.
In addition, midcareer personnel received an additional $375 a month in pay, and those with 25 years or more of experience received $750 a month more. In the private sector, a company might offer pre-emptive bonuses or pay raises to top performers in an effort to lock them in before they get a bigger offer from the competition.
Make your talented performers become even more valuable to other employers. As Command Sgt. Maj. Michael Hall explained to the House Armed Services Committee last year, Special Operations soldiers are most likely to quit the Army at 20 years’ service and jump at the first lucrative private offer if they’re worried that it’s a once-in-a-lifetime opportunity.
Paradoxically, Hall testified, the best way to keep them in uniform may be to convince them that their qualifications will give them equally as good or better private-sector opportunities further down the line. Providing educational opportunities within the service that will make a soldier an even more desirable job candidate down the line is one tactic. "If you have that degree in your pocket, you are not so worried, because it's like an insurance policy," Hall said.
Don’t discount the impact of loyalty to peers and to the mission. Lt. Gen. Michael Rochelle, head of the U.S. Army Recruiting Command, says that retention has been the strongest in military units--Special Forces included--who’ve seen duty in Iraq and Afghanistan. "You might think it’s counterintuitive, but retention is going gangbusters in those organizations," Rochelle says. "I think it’s the perspective of these soldiers that they are working together to make a difference."
That’s not surprising to Peter Weddle, a human resources consultant and author who served in the Army Rangers. He says that the Army’s most powerful tool for keeping Special Operations soldiers is what he calls "emotional handcuffs."
"The Army works hard to build up a sense of esprit de corps--an attachment to your peers in the organization," Weddle says. "And helping people feel pride in what they do and pride in their work--that’s really the key element. That’s all gone by the wayside in the corporate world."
A civilian company that’s able to instill a similar sense of purpose in its employees, Weddle says, may find that employees ignore lucrative offers from competitors to stay in the ranks.