Beth J. Asch

Language capability is provided in the intelligence community by military personnel, government civilians, and contractors. A key question is what is the best mix of these three types of personnel in terms of cost and effectiveness. This research draws on U.S. Department of Defense guidance and the economics and defense manpower literatures to provide a framework for broadly assessing the costs and benefits of different sources of personnel to provide a given capability, including language capabilities. The authors interviewed personnel at the National Security Agency/Central Security Service and conducted an exploratory quantitative analysis to identify the factors that may affect the best mix of language capability in the intelligence community. A key finding is that each category of personnel provides unique advantages and belongs in the IC language workforce but that a number of factors lead to civilians being a more cost-effective source of language capability than military personnel, even after accounting for the flow to the civil service of trained veterans with language capability. Policies that reduce language-training costs for military personnel and increase the flow of veterans to the civil service might help reduce this disparity.

This report describes two proposals for reforming the military compensation system, focusing on retirement compensation. Both proposals retain positive aspects of the current system while also providing cost savings, improving equity, potentially adding force management flexibility, and simplifying the Department of Defense disability compensation system.

This monograph provides an empirical analysis of the enlistment, attrition, and reenlistment effects of bonuses, applying statistical models that control for such other factors as recruiting resources, in the case of enlistment and deployments in the case of reenlistment, and demographics. Enlistment and attrition models are estimated for the Army and our reenlistment model approach is twofold. The Army has greatly increased its use of reenlistment bonuses since FY 2004, and we begin by providing an in-depth history of the many changes in its reenlistment bonus program during this decade. We follow this with two independent analyses of the effect of bonuses on Army reenlistment. As we show, the results from the models are consistent, lending credence to the robustness of the estimates. One approach is extended to the Navy, the Marine Corps, and the Air Force, to obtain estimates of the effect of bonuses on reenlistment for all services. We also estimate an enlistment model for the Navy. The estimated models are used to address questions about the cost-effectiveness of bonuses and their effects in offsetting other factors that might adversely affect recruiting and retention, such as changes in the civilian economy and frequent deployments.

The authors examine the prevalence and consequences of irregularities by military recruiters. Recruiter irregularities are uncommon -- using the services' data for tracking allegations between 2007-2009, the authors document about 1 allegation per 1,000 applicants. Between 1 to 3 percent of the recruiter workforce is involved in substantiated allegations in a given year, with concealment or falsification representing the most common form of irregularity. Exploring Army contract data, the authors compare the characteristics of those signing contracts at the end of the recruiting month -- when recruiters are under the greatest pressure to meet their monthly recruiting quotas -- with those signed earlier in the month. Recruiters appear less likely to carefully screen recruits and more likely to sign marginal applicants at the end of the contract month, leading to some negative outcomes among these enlistees. While undesirable behavior on the part of applicants and/or recruiters appears more prevalent at the end of the recruiting month, patterns in contracts across the course of the recruiting month also suggest the incidence of unreported irregularities is likely to be low.

Planners and policymakers must be able to assess how compensation policy, including pay freezes and unpaid furloughs, affects retention. This study begins to extend the dynamic retention model (DRM), a structural, stochastic, dynamic, discrete-choice model of individual behavior, to federal civil service employment. Models are developed and estimated,using 24 years of data, and then used to simulate the effects of pay freezes and unpaid furloughs. A permanent three-year pay freeze decreases the size of the retained General Service (GS) workforce with at least a baccalaureate degree by 7.3 percent in the steady state. A temporary pay freeze with pay immediately restored has virtually no impact on retention. When pay is restored after ten years, the retained GS workforce falls by 2.8 percent five years after the pay freeze and 3.5 percent ten years after it. An unpaid furlough, similar to the six-day federal furlough in 2013, has no discernible effect on retention. For all subgroups of GS employees for which the model is estimated, the model fit to the actual data is excellent, and all of the model parameter estimates are statistically significant. In future work, the DRM could be extended to provide empirically based simulations of the impact of other policies on retention; to estimate effects on other occupational areas, other pay systems, or specific demographic groups; or to create a "total force" model (military and civilian) of DoD retention dynamics and the effects of compensation on those dynamics.

A primary goal of military compensation is to enable the military to meet its manning objectives for force size, composition, and wartime capability. To attain these objectives, compensation must be appropriately structured to attract, retain, and motivate personnel at a reasonable cost, even when national security goals are changing. A key question facing military manpower and compensation managers is, How should military compensation be structured? Although past studies have narrowly focused on the relationship between compensation and retention, less attention has been paid to whether the military compensation system induces the best individuals to stay and seek advancements, and whether it motivates effective work. This highly technical report addresses the issue of how military compensation should be designed in light of these considerations. It presents research that aids us to develop a model of compensation in a large, hierarchical organization such as the military, a model that permits an analysis of the issues surrounding the design of military compensation. The report reaches four conclusions: (1) In a hierarchical system, pay spreads need to rise with rank to provide personnel with continuing incentives to work hard and seek promotion, and to induce the most able personnel to stay; (2) intragrade pay should be somewhat contingent upon performance and not be provided lockstep with seniority; (3) up-or-out rules are necessary to induce the separation of unpromotable personnel when pay is set administratively; and (4) retired pay may be offered for a number of reasons. The report also begins to evaluate the current military compensation system in light of the model, finding that the system appears more aimed at attracting and retaining personnel than at providing them with effective incentives to work hard and seek advancement.