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Private-Sector Benefit Offerings in the Competition for High-Skill Recruits
December 1, 2001
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.
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Long-Run Costs and Performance Effects of Competitive Sourcing Program: Profiles of 16 Competitions
September 1, 2001
The purpose of this study is to review the realism, and sustainability of estimated savings under the competitive sourcing program and examine whether the expected level of savings can be achieved and maintained over the long run without affecting the quality of services provided. To look at these cost and performance issues, CNA examined 16 competitions completed between 1988 and 1996. For the 16 competitions included in our analysis, we collected actual costs and all available performance information from the time of competition through FY 1999. We calculated the expected level of savings for each competition (based on the difference between the pre-competition costs and the winning bid) and compared these savings estimates with the post-competition costs.
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Benefit and Incentive Pay Provision In Large, Private-Sector Firms
January 1, 2001
As the longest economic expansion in history continues, the competition between the private sector and the military for able personnel intensifies. This competition has prompted renewed interest in the benefit and incentive pay programs that large, private-sector firms offer. As part of the Navy's FY 2000 Manpower and Personnel Integrated Warfare Architecture (IWAR), the Director of the Assessment Division (N81) has asked CNA to examine the provision of various benefit and incentive pay programs in the civilian sector. Of particular interest is the provision of such programs among large, private-sector firms that are considered strong competition in the market for skilled labor. This annotated briefing provides some context for the discussion by describing the current recruiting and retention difficulties of both the military and large, private-sector firms, and explains our choice of research methodology for assessing benefit and incentive programs currently offered to workers in large, private-sector firms.
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Bidding Behavior in DoD's Commercial Activities Competitions
January 1, 1998
In a previous study, CNA analysts used data from past DoD A-76 competitions to construct a model of savings and projected the potential savings from additional DoD Commercial Activities (CA) competitions. In this paper, we use an alternative approach for estimating savings from future Dod CA competitions. We estimate two separate bidding equations - one for the in-house team bid and another for the minimum contractor bids - along with an equation for baseline cost. Based on these estimated equations, one could then indirectly project future savings in the A-76 inventory as the difference between predicted baseline cost and the predicted winning bid. Using the new approach, we project an annual savings of $6 billion if the entire 1995 DoD CA inventory were competed under A-76 rules.
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Creating a 'Revolution in Business Affairs' in DOD
December 1, 1997
Given the lack of an immediate threat by a superpower, the pressures to fund nondefense programs, and the desire to shrink the deficit, the military's budget, in real terms, is unlikely to increase. Yet, we must fund modernization efforts and new initiatives, such as 'the Revolution in Military Affairs.' The only source for these funds appears to be the current military infrastructure accounts. Therefore, this paper calls for a 'Revolution in Business Affairs' (RBA) to provide an efficient and flexible infrastructure that supports changing military requirements at a price that does not overwhelm modernization efforts. The RBA will achieve this by changing fundamental DoD business process to those that have worked in the private sector.
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Korea in the 21st Century
February 1, 1996
The Commander, Seventh Fleet, asked CNA to assess the security environment of the Asia-Pacific Region between now and 2010. This research memorandum focuses on the most probable evolutionary trends for Korea during this period. For Korea the development of an Asian nation-state system comes at a time of historic power relative to anything of the past century. The problem for the Korean people, historically, was that Korea was a weak state surrounded by strong empires in China, Russia, and Japan. The economic development of Korea over the past 30 years is a remarkable success story, although this development took place in a peaceful stable environment. The problem facing Korea is whether it can successfully continue its economic progress in a world that is more competitive, more wary of exploitative economic practices, any more dominated by large countries who have in the past been enemies.
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America's Health: Recent Trends in Health Care
November 1, 1995
The health care system in the United States has changed substantially in recent decades. We have increased our spending on health care, both in absolute terms and as a relative share of total spending. The methods of delivery of health care, technological capabilities, demographics, and the sources of payment for health care expenditures have also changed a great deal. This research memorandum examines recent trends in three sectors of our health care system: the private insurance sector, Medicare, and Medicaid. The creation of Medicare and Medicaid in 1965 has had a strong influence on our health care system, and the private insurance market for health care coverage has changed considerably as well, To date, efforts to slow the rate of growth of health care costs have focused on cost containment methods to limit utilization, and have not addressed the implications of structural changes in society and our health care market.
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Expanding Public-Private Sector Competition for Navy Shore Activities
December 1, 1993
Some activities performed by government employees are similar to those performed in the private sector. Government policy -- outlined in Office of Management Budget circular A-76 -- is to allow private sector companies to compete with government organizations for this work. The goal is to use competition to encourage efficiency -- whether the function is contracted out or not. The Navy's Commercial Activities (CA) program is responsible for implementing this competition program within the Navy. Over the last decade, the Navy has studied about 1,000 activities -- covering about 29,000 billets (both civilian and military). Due to changes in legislation, the Navy is not doing any CA studies at this time. In this research memorandum, we examine: (a) the savings achieved as a result of CA studies; (b) whether the initial savings diminished over time; and (c) the prospect for future studies. Full documentation of this work appears in CRM 92-226.10, 'Analysis of the Navy's Commercial Activities Program.'
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Analysis of the Navy's Commercial Activities Program
July 1, 1993
Some activities performed by government employees are similar to those performed in the private sector. Government policy -- outlined in Office of Management Budget circular A-76 -- is to allow private sector companies to compete with government organizations for this work. The goal is to use competition to encourage efficiency -- whether the function is contracted out or not. The Navy's Commercial Activities (CA) program is responsible for implementing this competition program within the Navy. Over the last decade, the Navy has studied about 1,000 activities -- covering about 29,000 billets (both civilian and military). Due to changes in legislation, the Navy is not doing any CA studies at this time. In this research memorandum, we examine: (a) the savings achieved as a result of CA studies; (b) whether the initial savings diminished over time; and (c) the prospect for future studies.
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Russian Commercial Shipping in the Year 2002
May 1, 1993
Russian military specialists have argued that Russia will need a strong blue-water naval capability to protect her large merchant fleet, among other reasons. In this paper, we conclude that, in a decade, Russia will likely have a merchant fleet one-third to one-half of the size of the Soviet 1991 merchant fleet. Without a significant increase in capital investment, rapidly aging ships and market-based operational expenses promise to greatly reduce Russia's share of the once large Soviet merchant fleet. This information memorandum is one of a series of analyses produced in response to a request by the Director of Naval Intelligence that would define the probable character of the future Soviet or Russian Navy.
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