Private-Sector Benefit Offerings in the Competition for High-Skill Recruits

Over the past several years, the military has faced mounting recruiting, reenlistment, and manning difficulties. One perceived reason for these difficulties is increased competition for skilled personnel from the private sector, particularly through its incentive pay and benefit offerings. Although the recent softening of the economy may help to ease some of these competitive pressures, other less cyclical trends -such as a smaller high-school graduate recruiting pool and lower propensity to enlist in the military-persist. These trends suggest that a careful survey of the private-sector incentive pay and benefits landscape is needed. In this paper, we compare and contrast the incentive pay and benefit offerings of large, private-sector firms to those of the military. In doing so, we assess whether these offerings differ significantly in their provision, scope, or structure. We also consider whether these offerings have played a role in the military's recent recruiting, reenlistment, and manning difficulties. Finally, we describe the offerings of several private-sector companies that are likely to compete with the military for skilled personnel. We find significant differences in military and private-sector incentive pay and benefit provision of incentive-based pay, health care and retirement benefits, education and training services, child care, workforce flexibility measures, and Morale, Welfare, and Recreation (MWR)/other quality-of-life programs. In most cases, military benefits are broader in scope, differ in structure, and involve less choice than those offered by the private-sector. Taken together, these trends suggest several recommendations that could help the military in its recruiting, retention, and manning efforts.