The Effects of Pay and Benefits on Recruiting and Retention in the United States Army

The last several years there has been a growing concern over the increasing gap between military and civilian pay. More recently, the relationship between retention and retirement benefits has been of increasing interest to Members of Congress and Military Personnel officials. Over the last 10 years, Military Pay and Retirement Benefits did not significantly influence recruiting, but they become significant factors in the retention of soldiers beyond the initial enlistment. This report argues that there is no pay gap as it is currently defined. Comparison of military and civilian compensation as it relates to pay growth is not a true measure of any gap. Analysis of the data indicates that as the pay gap has increased, there has been a slight increase in recruiting and retention. This trend, while it negates part of my thesis, does not truly explain the total relationship between pay and recruiting/retention. There are other factors, such as stop loss, which during the early 1990's prevented soldiers from leaving the service due to specialty shortages and the Gulf War; and the drawdown that have artificially inflated enlisted reenlistment rates and officer retention. Additionally, recruiting percentages are not an accurate reflection of the impact of pay on attracting today's young men and women. As Youth Attitudes Tracking Surveys (YATS) indicate, the dominant buying motives for the last eight years are training and education. Additional factors that outweigh the current pay gap debate and that need serious study are troop morale; health care; family care; housing, and other quality of life issues. These issues upon further study may indicate the true nature of the Army's retention problem and provide the answers we seek.