Recruiting, Retention, and Future Levels of Military Personnel

Since the terrorist attacks of September 11, 2001, ongoing military operations—including Operation Iraqi Freedom, Operation Enduring Freedom, and Operation Noble Eagle—have required substantial increases in the number of military personnel deployed. As of July 31, 2006, about 180,000 active-duty service members and another 60,000 national guard and reserve members were deployed in support of those operations. The Army, sup-plying the bulk of the personnel, had about 110,000 active-duty troops and 50,000 Army National Guard and Army Reserve members deployed to the Iraq and Afghanistan theaters at that time.

The military’s ability to maintain the force levels required to continue conducting operations in Iraq and Afghanistan rests on its ability to recruit and retain service members. Some military analysts and policymakers have expressed concern that the ongoing operations could detrimentally affect both recruiting and retention. The pro-portion of youth who say that they may join the military increased after September 11, 2001, but according to the Department of Defense’s (DoD’s) surveys of parents and other adults who influence youths’ decisions, a majority in 2005 said that they were less likely to recommend military service because of the war in Iraq. In addition, some military services, including all of the Army components, faced recruiting shortfalls in 2005, although some components, including all of the Army ones, have had a turn-around in 2006, approaching or meeting their quantity goals, albeit sometimes at the expense of their goals for recruits’ qualifications. Furthermore, recent studies indicate that the current combat operations could negatively affect retention in some segments of the active-duty military.

In this analysis, the Congressional Budget Office (CBO) examines the recruiting and retention rates for enlisted personnel within each of the military components, the factors that may influence enlistment and reenlistment, and the implications of changes in each component’s success in recruiting and retaining service members. CBO presents a more in-depth discussion for the Army components—the active Army, the Army National Guard, and the Army Reserve—than it does for the other military components—the Marine Corps, the Navy, and the Air Force—because the Army components are deploying the largest numbers of personnel to the military operations in Iraq and Afghanistan and they have also all faced difficulties either maintaining or increasing their end strength (the number of service members in a component’s force at the end of the fiscal year) in accordance with the Congress’s authorization.

This study focuses on attaining end-strength goals as a measure of the military’s ability to sustain operations. In turn, there are two key determinants of future end-strength levels: yearly accessions and continuation rates. (CBO’s analysis focuses on enlisted personnel.) Accessions and continuation rates are related in a complex way. A trained service member who separates from the military must be replaced by more than one accession to account for recruits who separate during training or during their first few years of service.

On the basis of 2005 end strength, 2005 continuation rates for personnel in each year of service, and 2006 accession goals, CBO estimated the future end strength of each military component separately, compared those results to the levels authorized by the Congress, and calculated the effect of changes in end strength on the number of troops available for deployment. CBO also modeled other scenarios for end strength, varying assumptions about accessions and continuation rates.

Active Army

The active Army was the only active component that did not achieve its recruiting goal in 2005, falling short of 80,000 accessions by 6,600, or 8 percent. In addition, it drew from the participants in its Delayed Entry Program (DEP)—in effect, borrowing from future end strength—to reach the accession level that it did. In response to its recruiting difficulties, the Army substantially increased its recruiting resources during the year. In addition, law-makers increased the educational benefits provided to service members under the Montgomery GI Bill, among other things. For 2006, the Army again set its goal at 80,000 recruits.

CBO examined the effectiveness of various recruiting resources (the number of recruiters, advertising, enlistment bonuses, and educational benefits) to determine which of the Army’s options would be most effective in increasing enlistments and whether the Army’s actions to date should be sufficient for meeting its recruiting goals. According to CBO’s review of relevant analyses, placing more recruiters in the field has the largest effect on the number of enlistments. A 10 percent increase in the number of recruiters would boost enlistments by between 4 percent and 6 percent, while a 10 percent increase in the expenditures on advertising, enlistment bonuses, or educational benefits would increase enlistments by up to 1 percent.

By CBO’s calculations, a force of 6,400 experienced recruiters—reflecting an increase of between 800 and 1,100 over the average number in 2005—could eliminate the shortfall of 6,600 recruits that the active Army experienced in 2005; such a force would cost between $98 mil-lion and $147 million, CBO estimates. Alternatively, eliminating that shortfall using only advertising or only enlistment bonuses would cost between $137 million and $195 million and between $161 million and $429 mil-lion, respectively.

By the end of 2005, the active Army had increased its total number of recruiters to almost 6,500, which should have enabled it to meet its goal for 2006 if the recruiting environment did not deteriorate. Indeed, through August 2006, it had recruited 73,000 soldiers, or 88 percent of its annual goal. However, to meet that goal, the quality of the recruits (defined in terms of the percentage who were high school graduates and the percentage scoring above the median on a qualification test) declined substantially, potentially posing difficulties for retention and performance in the future.

In addition to recruiting problems, continuation rates in the active Army in 2004 and 2005 were at historical lows. In response to concerns about retention, in 2005 the Army began allowing individuals to reenlist up to two years early (increasing reenlistments temporarily, for 2005 and 2006), and it increased its expenditures on reenlistment bonuses almost fourfold, to $505 million. According to data from the Army, expenditures in 2006 may exceed $650 million.

Under the assumption that the Army will attain its 2006 recruiting goal (the data are due to be released later this month), along with the assumption that the Army will maintain its continuation rates at the 2005 levels for the next several years, the Army’s end strength would drop from about 492,700 soldiers in 2005 to 481,600 by 2010—implying that the 2005 continuation rates are insufficient to sustain the force. If the ratio of deployable to nondeployable troops remained at its current levels, the number of troops in deployable units would drop by between 6,800 and 7,400 soldiers. However, the Congress increased the Army’s authorized end strength to 512,400 active soldiers for 2006 and granted the Secretary of Defense the discretion to increase it to as many as 532,400 soldiers for the period 2007 through 2009.

For the Army to increase its force to about 500,000 in 2006 and to surpass its authorized end strength of 512,000 troops by 2008 and reach 524,000 personnel by 2010 would require sustained accession levels and continuation rates that have not been sustained for extended periods. But under that scenario, in 2010 the force would have 31,500 more personnel than it did in 2005 and between 19,500 and 21,100 more deployable troops. According to CBO’s estimates, as a rule of thumb, each increase of 1,000 annual accessions (maintained over a five-year period) would accumulate to boost end strength by more than 3,000 additional personnel by the end of the fifth year.

Army National Guard

The Army National Guard missed its recruiting goal each year from 2003 to 2005 by at least 13 percent. In 2005, with a somewhat higher-than-average goal of 63,000 recruits, it had its largest shortfall—of almost 13,000 recruits, or 20 percent. Consequently, the component’s end strength fell from over 350,000 troops in 2003 to 333,000 in 2005.

To partially compensate, the Army National Guard set a goal of 70,000 recruits in 2006, the highest level in this decade. By CBO’s calculations, the Guard’s increase in the number of full-time recruiters (from 3,915 at the end of 2004 to 4,955 by the end of 2005, or an average of 4,400 for those two years) alone would not have enabled it to meet the 2006 goal. However, more recruiters in combination with increases in other resources and incentives, increases in recruiters’ productivity, or improvements in the recruiting environment could have permitted the National Guard to attain that goal. Through August 2006, the National Guard recruited 63,000 soldiers, or 90 percent of its annual goal.

If the Guard achieved its 2006 accession goal and maintained continuation rates at the 2005 levels, it would reach an end strength of over 346,000 personnel in 2006, CBO estimates—fewer than 4,000 personnel short of its authorized end strength of 350,000. In that scenario, accessions of 63,500 for 2007 would enable it to reach its authorized end strength of 350,000 that year. Accessions of 61,000 thereafter would maintain end strength at that level through 2010. By CBO’s estimates, each increase of 1,000 in annual accessions would translate to a boost in end strength of almost 3,200 personnel. Under a different scenario, accessions of 70,000 for 2006 combined with a 0.9 percentage-point improvement over the 2005 continuation rates (which would be similar to those experienced in the first half of 2006) would allow the Guard to come within 1,000 personnel of its authorized end strength in 2006.

Army Reserve

For the Army Reserve, end strength dropped from 204,000 troops in 2004 to 189,000 in 2005, or 16,000 below its authorized level. End strength fell as recruiting difficulties materialized and continuation rates declined. Despite having set the lowest recruiting goal of the decade—28,485 accessions—the Reserve fell short by nearly 5,000 individuals, or 16 percent. A DEP that the Reserve started in 2004 and a related change in how it counts end strength account for another portion of the shortfall. Under those policy changes, about 3,500 recruits who had signed contracts but who did not have prior service were not deemed accessions and were not due to be counted toward end strength until they attended initial training.

In an effort to meet its goals for end strength, the Army Reserve has increased its recruiting resources by shifting its full-time recruiting support personnel into direct recruiting and by increasing enlistment and reenlistment bonuses, among other initiatives. By CBO’s calculations, the increase in the number of direct recruiters by year-end 2005 alone might not have been enough for the component to reach its goal of 36,000 recruits for 2006. Through August 2006, the Army Reserve recruited substantially more individuals, 31,300, than in did in 2005 but was still short (at 94 percent) of its year-to-date goal. And even if the Army Reserve was able to attain 36,000 recruits each year for the next several years, by CBO’s projections the size of the force in 2010 would be about the same as it was in 2005 (if continuation rates were held at their 2005 levels). To attain an end strength of 200,000 by 2010 (as outlined in DoD’s Future Years Defense Program, or FYDP), the Army Reserve would need to recruit 40,000 individuals each year, which is above the average numbers attained early in the decade. Each change of 1,000 in the number of annual accessions, CBO estimates, would accumulate to a change in end strength of 2,800 personnel by the end of five years.

Active Marine Corps

The active Marine Corps has met its recruiting and retention goals, and it has slightly exceeded its authorized levels of end strength every year this decade, even as those levels increased from 172,500 troops in 2000 to 178,000 in 2005. However, the recruiting environment in 2005 showed some contradictory signs. On the one hand, to meet its recruiting goal, the Marine Corps allowed its DEP pool at the end of 2005 to drop to 43 percent of its original 2006 goal for accessions, marking the first time in at least 10 years that that figure dropped below its tar-get of 50 percent. On the other hand, in 2005, the Marine Corps was able to keep the number of recruiters stable, while its expenditures for enlistment bonuses were at their lowest levels this decade.

The Marine Corps began the year with a goal of 32,880 recruits for 2006, a level just 200 above the average for 2000 through 2004. Having recruited 101 percent of its cumulative goal through August, the Marine Corps was on pace to meet its 2006 goal. If, for the next several years, the Corps could recruit at about that level while maintaining continuation rates at the 2005 levels (which were about 1 percentage point higher than the rates that existed before September 11, 2001), end strength would grow to 184,000 by 2010. That figure corresponds to the increased level that the Congress authorized, at the discretion of the Secretary of Defense, in the 2006 National Defense Authorization Act for the period spanning 2007 through 2009. If, instead, the Marine Corps recruited 31,700 soldiers annually, end strength would remain stable over the period at 180,000 Marines, the 2006 authorized level.

Marine Corps Reserve

The Marine Corps Reserve—the smallest component, with an end strength of 40,000 personnel in 2005—met its recruiting and retention goals for each year from 2000 through 2005. In that time span, the size of the force varied only slightly, from 39,600 to 41,100 (while authorized end strength was stipulated at about 39,600 for each of those years).

Continuation rates have increased substantially over this decade; to compensate, the Reserve dropped annual accession levels in recent years to about 8,000 recruits. (Despite lower accession goals, expenditures for enlistment bonuses are considerably higher than they were early in the decade.) If the Marine Corps Reserve maintained its continuation rates from 2005 and attained its 2006 recruiting goal (which was the lowest that it has been this decade), end strength would be 41,100 by 2010. That level corresponds closely to the one outlined in DoD’s 2007 FYDP. If, however, the number of recruits fell short of the 2006 goal by 500 each year, the size of the force would total about 39,400 personnel in 2010.

Active Navy

The Navy—both active and reserve components—is in the midst of a reduction in force. Authorized end-strength levels for the active Navy dropped from 372,000 personnel in 2000 to 352,700 in 2006. Further reductions to 331,300 by 2010 (as outlined in the FYDP) are planned. Consequently, the Navy has reduced its recruiting and retention goals considerably. At the beginning of the decade, the number of accessions was 55,100; in 2005, it was 37,700. Although some shortfalls for particular occupational specialties may have existed, the Navy does not appear to have had broad difficulties recruiting. It was able to meet its goals while decreasing the number of active-force recruiters and lowering the expenditures on enlistment bonuses. As of August 2006, the Navy looked as if it would meet is annual goal of 36,000 recruits.

The active Navy is facing the challenge of retaining the skilled personnel it needs while encouraging others to leave voluntarily. In 2005, the Navy did not meet its (lowered) retention goal. Presumably in response to that difficulty, the Navy increased its expenditures on Selective Recruitment Bonuses (SRBs) during the year. It also has crafted programs such as “Perform to Serve,” in which sailors are screened at their reenlistment point for their eligibility to reenlist. In that program, the Navy offers some sailors in overmanned occupations who might otherwise be separated a chance to retrain and reenlist in undermanned occupations.

By CBO’s estimates, if the Navy recruited 37,500 sailors (the 2006 goal) each year and maintained continuation rates at the 2005 levels (which were similar to the pre-September 11, 2001, levels), the Navy would reduce its end strength to 333,800 sailors by 2010—a number slightly higher than planned. A 1 percentage-point decline in continuation rates from their overall 2005 level of 86.2 percent (yielding a level similar to that in 2000) would reduce the force by 12,000 more sailors, to 321,700, by 2010. A force of that size would be almost 10,000 below the goal.

Navy Reserve

The Navy Reserve plans to cut its end strength from 76,500 personnel in 2005 to 68,100 by 2010. (The level had already dropped by about 6,000 personnel in 2004 and again by about that amount in 2005.) Although the Navy Reserve successfully achieved a declining goal for accessions from 2001 to 2004, it fell short of its goal by 1,700 in 2005, when it had only 9,800 recruits. Despite spending more on reenlistment bonuses in 2005, the continuation rates in that year followed a declining trend that had begun three years previously. For 2006, the Navy Reserve planned to recruit 11,200 sailors, an increase of 1,400 over the actual number in 2005. With 8,800 recruits through August 2006, or 86 percent of its cumulative goal, the service may not have attained its annual goal.

The Navy Reserve has embarked on several new initiatives in its attempt to reverse its decline in accessions. Those initiatives include increases in recruiting resources and tapping new segments of the recruiting market. In addition, the Navy Reserve anticipates that about 1,700 individuals who participate in the active Navy through the National Call to Service (NCS) will transfer to the Reserve in 2007 and that similar or larger numbers will do so thereafter. Those sailors represent an additional boost to the Navy Reserve if they would not have served in the Reserve in the absence of the program. If, however, some of them would have joined the Reserve without the program, accession goals above the 2006 level might be difficult to attain without additional resources.

According to CBO’s estimates, even if the Navy attained its 2006 accession goal and maintained the continuation rates that existed in 2005, the Reserve’s end strength would fall below planned levels, to 65,900 personnel, by 2010—a shortfall of 3 percent. If the Navy Reserve recruited at the 2005 level—almost 9,800 sailors—each year over the next five, end strength would fall to 62,300 by 2010, a shortfall of 9 percent. To reach the planned end-strength levels outlined in the FYDP, the Navy Reserve would require accessions of 8,750 for 2006, rising to 13,000 by 2010, while maintaining continuation rates at the 2005 levels. If the Reserve’s NCS program succeeds in tapping a new segment of the recruiting market and if enhanced bonuses are effective, the Navy Reserve may be able to achieve those accession and end-strength targets.

Active Air Force

The active and reserve components of the Air Force are also undergoing reductions. The Air Force’s end strength exceeded authorized levels from 2002 to 2004. Accordingly, accessions were reduced; for instance, between 2004 and 2005, they were almost halved, to only 19,000 recruits. After decreasing from 376,600 personnel in 2004 to 353,700 in 2005, or by 6 percent, to meet its authorized level of end strength, the active Air Force will further reduce its end strength to 316,500 by 2011, or by about 10.5 percent cumulatively. The accession goal for 2006 (about 31,000 recruits), while larger than the previous year’s, was lower than the average annual accession level for the decade; as of August 2006, the Air Force was on track to meet that goal. Reductions in recruiting resources like advertising and enlistment bonuses have accompanied the lower accession and end-strength levels. Continuation rates, too, have fallen during the past few years, possibly to reduce end strength to authorized levels.

According to CBO’s projections, if, in conjunction with its 2006 accession goal, the active Air Force maintained its continuation rates at the 2005 levels (which were among the lowest in the past 15 years), by 2010 its end strength would fall 11,300 below the level outlined in the FYDP, to 308,900 personnel. The Air Force could attain its planned end strength by that year by recruiting up to 32,500 new personnel annually combined with achieving substantially higher continuation rates for 2006 (similar to those for 2004) and continuation rates 1 percentage point higher than those, for 2007 and beyond (similar to those before September 11, 2001).

Air National Guard and Air Force Reserve

The Air National Guard plans to reduce its end strength by about 11 percent between 2005 and 2010 (from 106,400 to 94,200 personnel), while the Air Force Reserve plans to reduce its force size by about 9 percent during the same period (from 75,800 to 68,700). The reserve components have generally met their recruiting goals. The Air Force Reserve met its goals every year but 2000. However, the Air National Guard fell short in 2001, 2004, and 2005. As of August 2006, the Reserve was meeting its year-to-date goal, but the Guard was at 94 percent of its goal. After being interrupted by some-what sharp drops in 2003, continuation rates in 2005 for the two components nearly returned to their levels before September 11, 2001. By CBO’s projections, if the Air National Guard attained its 2006 accession goal (which was low by historical standards) and maintained its continuation rates at the 2005 levels through 2010, its end strength would exceed the planned level by about 9,000 in 2010. However, if the Air Force Reserve did the same, its end strength would fall to the levels outlined in its plan.