Military Personnel: DOD Needs Action Plan to Address Enlisted	 
Personnel Recruitment and Retention Challenges (17-NOV-05,	 
GAO-06-134).							 
                                                                 
The Department of Defense (DOD) must recruit and retain hundreds 
of thousands of servicemembers each year to carry out its	 
missions, including providing support in connection with events  
such as Hurricanes Katrina and Rita. In addition to meeting	 
legislatively mandated aggregate personnel levels, each military 
component must also meet its authorized personnel requirements	 
for each occupational specialty. DOD reports that over half of	 
today's youth cannot meet the military's entry standards for	 
education, aptitude, health, moral character, or other		 
requirements, making recruiting a significant challenge. GAO,	 
under the Comptroller General's authority (1) assessed the extent
to which DOD's active, reserve, and National Guard components met
their enlisted aggregate recruiting and retention goals; (2)	 
assessed the extent to which the components met their authorized 
personnel levels for enlisted occupational specialties; and (3)  
analyzed the steps DOD has taken to address recruiting and	 
retention challenges.						 
-------------------------Indexing Terms------------------------- 
REPORTNUM:   GAO-06-134 					        
    ACCNO:   A41737						        
  TITLE:     Military Personnel: DOD Needs Action Plan to Address     
Enlisted Personnel Recruitment and Retention Challenges 	 
     DATE:   11/17/2005 
  SUBJECT:   Armed forces reserves				 
	     Employee retention 				 
	     Enlisted personnel 				 
	     Military enlistment				 
	     Military forces					 
	     Military personnel 				 
	     Military recruiting				 
	     Military reserve personnel 			 
	     National Guard					 
	     Performance measures				 
	     Personnel recruiting				 
	     Policy evaluation					 
	     Strategic planning 				 
	     Program goals or objectives			 
	     Military occupational specialties			 

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GAO-06-134

     

     * Report to Congressional Committees
          * November 2005
     * Military Personnel
          * DOD Needs Action Plan to Address Enlisted Personnel Recruitment
            and Retention Challenges
     * Contents
          * Results in Brief
          * Background
          * DOD's Components Met Most Aggregate Recruiting and Retention
            Goals in the Past 6 Fiscal Years, but Recent Trends Prompt
            Concerns
               * Components Generally Met Aggregate Recruiting Goals in Past
                 6 Fiscal Years, but Five Components Experienced Recruiting
                 Difficulties in Fiscal Year 2005
               * Components Met Aggregate Retention Goals in Past 6 Fiscal
                 Years, but the Navy Experienced Retention Difficulties in
                 Fiscal Year 2005
               * Several Factors Suggest Recruiting and Retention
                 Difficulties Are Likely to Continue
                    * Delayed Entry Program
                    * Stop Loss
                    * Individual Ready Reserve
          * Components Have Exceeded Authorized Personnel Levels for Some
            Occupational Specialties and Experienced Shortages in Others
               * Certain Occupational Specialties Have Been Consistently
                 Over- or Underfilled Compared to Their Authorized Personnel
                 Levels
               * DOD Lacks Information on Recruiting and Retention Challenges
                 for All Over- and Underfilled Occupational Specialties
          * DOD Has Taken Steps to Enhance Recruiting and Retention Efforts,
            but Limited Information Makes It Difficult to Determine Financial
            Incentives' Effectiveness
               * Recruiting Programs, Advertising, and Financial Incentive
                 Budgets Have Fluctuated
               * Five Components Have Increased Number of Recruiters
               * Some Components Have Made Adjustments to Their Advertising
                 Programs
               * Some DOD Components Have Increased Financial Incentives to
                 Recruits and Servicemembers
               * Components Provide Limited Justifications to DOD on
                 Financial Incentives Given to Servicemembers in Overfilled
                 Occupational Specialties
          * Conclusions
          * Recommendations for Executive Action
          * Agency Comments and Our Evaluation
     * Scope and Methodology
     * Enlisted Aggregate Recruiting Goals and Achievements for Fiscal Years
       2000 through 2005
     * Active Duty Enlisted Aggregate Retention Goals and Achievements for
       Fiscal Years 2000 through 2005
     * Active, Reserve, and National Guard Components' Consistently Over- and
       Underfilled Occupational Specialties
     * Comments from the Department of Defense
     * GAO Contact and Staff Acknowledgments

Report to Congressional Committees

November 2005

MILITARY PERSONNEL

DOD Needs Action Plan to Address Enlisted Personnel Recruitment and
Retention Challenges

Contents

Tables

Figures

November 17, 2005Letter

Congressional Committees

The Department of Defense (DOD) faces a significant challenge in
recruiting and retaining hundreds of thousands of new servicemembers each
year, not only to meet annual legislatively mandated aggregate personnel
levels, but also to meet authorized personnel requirements within its
hundreds of occupational specialties. To further complicate an already
challenging recruiting environment, DOD reports that over half of today's
youth between the ages of 16 and 21 are not qualified to serve in the
military because they fail to meet the military's entry standards for
education, aptitude, health, moral character, or other requirements.1
Furthermore, parents, teachers, and other influencers are less inclined to
encourage young people to join the military. In fiscal year 2005 alone,
DOD had goals to recruit almost 170,000 personnel into its active duty
forces and about 131,000 personnel into its reserve and National Guard
components.2 Additionally, in 2005, DOD had to retain tens of thousands of
personnel to sustain its force of about 2.7 million military
servicemembers.3 Today's immediate military recruiting and retention
challenge centers on the continuing deployment of over 180,000 ground
forces from the active, reserve, and National Guard components to the war
zone in Iraq. Military officials have testified that fiscal year 2005
proved to be a difficult recruiting year and believe the recruiting
environment will become even more challenging in fiscal year 2006.4

The key to managing the force to meet operational demands is for DOD's
components to balance accessions and losses within the confines of their
legislatively mandated personnel levels. However, simply meeting these
mandated aggregate personnel levels could present a misleading picture of
recruiting and retention challenges. Detailed information concerning
whether the components have met their authorized personnel levels for
occupational specialties, the reasons why certain occupational specialties
may be over- or underfilled, and justifications for the use of incentives
provided to servicemembers are important elements of an effective
recruiting and retention plan.

Given the extraordinary scope of the current military overseas operational
commitments, many members of Congress have expressed considerable interest
in DOD's ability to recruit and retain sufficient numbers of
servicemembers with the required skills and experience to accomplish its
multiple missions. In response to this broad congressional interest, we
undertook a review, under the authority of the Comptroller General, of
military recruiting and retention. In March 2005, we submitted a statement
for the record to the Subcommittee on Military Personnel, Committee on
Armed Services, House of Representatives, which outlined our preliminary
observations on DOD's enlisted personnel recruiting and retention issues.5
This report, which updates that statement, addresses enlisted
servicemembers only. Specifically, for this report we: (1) assessed the
extent to which DOD's active, reserve, and National Guard components met
their enlisted aggregate recruiting and retention goals; (2) assessed the
extent to which the components met their authorized personnel levels for
enlisted occupational specialties; and (3) analyzed the steps DOD has
taken to address recruiting and retention challenges.

To address these objectives, we examined DOD policies, regulations, and
directives related to recruiting and retention of military servicemembers.
We also reviewed recruiting and retention reports and briefings issued by
GAO, DOD, the military services, the Congressional Research Service, the
Congressional Budget Office, and research organizations such as RAND.
Additionally, we visited and interviewed officials within the Office of
the Under Secretary of Defense for Personnel and Readiness and DOD's 10
components, including the active duty, reserve, and National Guard
components' headquarters and their recruiting commands to obtain insights
into recruiting and retention challenges. We also analyzed individual
component databases containing recruiting and retention data on active,
reserve, and Guard servicemembers. We relied primarily on data covering
fiscal years 2000 through June 30, 2005, the last fiscal quarter for which
data were complete, but in certain cases, we were able to update the data
with more current information. We also determined that the data used in
this report were sufficiently reliable for our purposes. We conducted our
work from January 2005 through October 2005 in accordance with generally
accepted government auditing standards. Additional information on our
scope and methodology is presented in appendix I.

Results in Brief

While DOD's 10 components generally met their aggregate recruiting and
retention goals for enlisted servicemembers in fiscal years 2000 through
2004, they faced greater recruiting difficulties in fiscal year 2005, and
several factors suggest they will continue to be challenged in meeting
future recruiting and retention goals. With respect to recruiting, most
components met their aggregate recruiting goals for fiscal years 2000
through 2004. However, in fiscal year 2005, 5 of the 10 components-the
Army, Army Reserve, Army National Guard, Air National Guard, and Navy
Reserve-missed their recruiting goals by a range of 8 to 20 percent. Most
of the components met their aggregate retention goals for fiscal years
2000 through 2004, but the Navy experienced aggregate shortages by up to 8
percent in fiscal year 2005. However, several factors suggest that the
components may have difficulty meeting future recruiting and retention
goals. For example, all the active components experienced shortfalls in
the number of new recruits in their delayed entry programs, which suggest
that they will likely experience difficulties in meeting their aggregate
recruiting and retention goals in the future.6 The active components
prefer to enter each fiscal year with 35 to 65 percent of the coming
year's recruiting goals already filled by recruits in the delayed entry
program. Current data show, however, that the components are not meeting
these targets. Also, through its continued use of the "stop loss" program,
the Army prevented over 15,000 soldiers, or less than one-tenth of a
percent of DOD's total military force-Army, Army Reserve, and Army
National Guard-from leaving active duty in June 2005, even though these
soldiers had completed their

military obligations.7 Moreover, since fiscal year 2002, the Army Reserve
has called to active duty about 7,000 members of the Individual Ready
Reserve to help alleviate personnel shortages in the Army, Army Reserve,
and Army National Guard.8 As of August 2005, over 4,000 of these soldiers
were still on active duty, serving a maximum of 2 years.

All components exceeded authorized personnel levels for some occupational
specialties and did not meet others. Specifically, we found that 19
percent of DOD's 1,484 occupational specialties were overfilled and 41
percent were underfilled in at least 5 years from fiscal years 2000
through 2005. Component officials provided several reasons why
occupational specialties were over- or underfilled, including high demand
occupational specialties that are critical to meet mission, overall force
structure changes, and extensive training or qualification requirements.
Additionally, officials in some components told us that they assign new
recruits to occupational specialties that are overfilled, at times, to
meet end-of-year aggregate personnel levels mandated by Congress. We
believe that consistently over- and underfilled occupational specialties
are a systemic problem for DOD that raises two critical questions. First,
what is the cost to the taxpayer to retain thousands more personnel than
necessary in consistently overfilled occupational specialties? Second, how
can DOD components continue to effectively execute their mission with
consistently underfilled occupational specialties? In fiscal year 2005,
almost 31,000 more servicemembers than authorized served in occupational
specialties that have been consistently overfilled. We determined that it
cost the federal government about $103,000 annually, on average, to
compensate each enlisted active duty servicemember in fiscal year 2004. In
contrast, DOD was unable to fill over 112,000 positions in consistently
underfilled occupational specialties, raising concerns about the validity
of authorized personnel levels. DOD, specifically the Office of the Under
Secretary of Defense (OUSD), began requiring the active components to
report information on those occupational specialties the components
determine to be critical for recruiting in fiscal year 2004, and
information on those occupational specialties the components determine to
be critical for retention, beginning in fiscal year 2005. Collectively,
the critical occupational specialties (such as Army Infantrymen and Marine
Corps Counter Intelligence Specialists) that the active components report
on represent at most 16 percent of DOD's 625 active duty occupational
specialties. Consequently, DOD is currently not in a position to monitor
and evaluate at least 84 percent of active component occupational
specialties because it does not require the active duty components to
report on "noncritical" occupational specialties. Moreover, DOD does not
require the reserve or National Guard components to report on any of their
859 occupational specialties. In July 2005, DOD issued Directive 1304.20
that requires the components to meet aggregate and occupational
specialty-specific authorized personnel levels. However, until all
components report on all over- and underfilled occupational specialties,
including information as to the reasons why these occupational specialties
are over- and underfilled, and DOD determines if the new directive is
having its desired effect, the department cannot develop an effective plan
to assist the components in addressing the root causes of recruiting and
retention challenges. Moreover, DOD will be unable to address the critical
questions we raised concerning the economic impact on the taxpayer of
having thousands more personnel than necessary in consistently overfilled
occupational specialties and how the department's components can
effectively execute their mission with consistently underfilled
occupational specialties.

DOD and the components have taken several steps, such as adjusting their
recruiting, advertising, and financial incentives programs, to address
their recruiting and retention difficulties; however, DOD lacks
information on financial incentives provided for certain occupational
specialties, which makes it difficult for the department to determine
whether the financial incentives are being targeted most effectively. From
fiscal years 2000 through 2006, DOD's collective recruiting program
budgets ranged from approximately $631.6 million to $800.7 million; its
advertising budgets ranged from approximately $506.6 million to $663.0
million; and its budgets for financial incentives, such as enlistment or
selective reenlistment bonuses, ranged from approximately $149.3 million
to $551.6 million. As in previous years, several components used these
programs to address recruiting and retention needs in fiscal year 2005.
Five components, for example, increased the number of recruiters, three
components made adjustments to their advertising programs, and several
components increased the financial incentives they offer to servicemembers
serving in specific occupational specialties. While DOD requires the
active components to report the rationale for the incentives they provide
to servicemembers in critical occupational specialties, it does not
require the components to provide fully transparent rationales for the
incentives provided to servicemembers in the remaining noncritical
occupational specialties (about 84 percent). In some instances, we found
that DOD's active components were paying financial incentives to
servicemembers in selected occupational specialties that have been
consistently overfilled in the last 5 or 6 years. Officials explained that
components target incentives to underfilled pay grades within occupational
specialties that may be overfilled as a whole. Additionally, an official
also stated that the requirement to meet legislatively mandated aggregate
personnel levels result in, at times, offering bonuses to servicemembers
who will serve in overfilled specialties, simply to meet their mandated
aggregate personnel levels. Because DOD only requires the components to
provide minimal justification on their use of financial incentives paid to
servicemembers in all occupational specialties, it lacks the information
needed to ensure funding spent on recruiting and retention is
appropriately and effectively targeted to occupational specialties for
which the components have the greatest need and to determine if other
types of corrective action are needed.

We are making recommendations that would require the 10 active, reserve,
and National Guard components to report all of their over- and underfilled
occupational specialties, including reasons why the occupational
specialties are over- and underfilled, and to justify their use of
financial incentives provided to servicemembers in occupational
specialties that have more personnel than authorized. Based on this
information, we also recommend that DOD develop a management plan to
address recruiting and retention challenges.

In written comments on a draft of this report, DOD partially concurred
with our recommendations. DOD's comments are included in this report as
appendix V.

Background

Conditions today present some of the most difficult recruiting and
retention challenges DOD has experienced in recent history. Since the
September 11, 2001, terrorist attacks on the United States, DOD has
launched three major military operations requiring significant numbers of
military servicemembers: Operation Noble Eagle, which covers military
operations related to homeland security; Operation Enduring Freedom, which
includes ongoing military operations in Afghanistan and certain other
countries; and Operation Iraqi Freedom, which includes ongoing military
operations in Iraq. These military operations have greatly increased
personnel tempo, especially in the Army, Marine Corps, Army National
Guard, and Army Reserve, which have provided the bulk of the military
servicemembers for operations in Iraq. Additionally, when Hurricanes
Katrina and Rita hit the Gulf Coast in August and September 2005,
respectively, resulting in possibly the largest natural disaster relief
and recovery operations in U.S. history, DOD was called upon to provide
extensive search and rescue, evacuation, and medical support.

DOD relies on four active components-the Army, Navy, Marine Corps, and Air
Force-and four reserve and two National Guard components-the Army National
Guard, Army Reserve, Navy Reserve, Marine Corps Reserve, Air National
Guard, and Air Force Reserve-to meet its mission.9 Each year, Congress
authorizes an annual year-end authorized personnel level for each
component. In fiscal year 2005, the authorized personnel levels for the
four active, four reserve, and two National Guard components totaled
approximately 2.3 million military servicemembers.10 In order to meet
legislatively mandated authorized personnel levels, DOD must balance
accessions and losses. Meeting this authorization requirement is a
function of recruiting and retention.

The term recruiting refers to the military components' ability to bring
new members into the military to carry out mission-essential tasks in the
near term and to begin creating a sufficient pool of entry-level
servicemembers to develop into future midlevel and upper-level military
leaders. To accomplish this task, active, reserve, and National Guard
components set goals for accessions, or new recruits, who will enter basic
training each year, and strive to meet their annual goals through their
recruiting programs; advertising; and, where needed, financial incentives.
The term retention refers to the military services' ability to retain
servicemembers with the necessary skills and experience. Again, the
components rely on financial incentives, where needed, to meet their
retention goals.

The components further delineate their force structure through
occupational specialties. These occupational specialties, totaling about
1,500 across DOD in the active, reserve, and National Guard components,
represent the jobs that are necessary for the components to meet their
specific missions. These occupational specialties cover a variety of jobs,
such as infantrymen, dental technicians, personnel clerks, journalists,
and air traffic controllers.

DOD's Components Met Most Aggregate Recruiting and Retention Goals in the
Past 6 Fiscal Years, but Recent Trends Prompt Concerns

While DOD's active, reserve, and National Guard components met most of
their aggregate recruiting and retention goals in the past 6 fiscal years,
they faced greater recruiting difficulties in fiscal year 2005. With
respect to recruiting, most components met overall goals from fiscal years
2000 through 2004, but 5 of the 10 components experienced recruiting
difficulties in fiscal year 2005. Most components also met their aggregate
retention goals in the past 6 fiscal years, but the Navy experienced
retention shortages in fiscal year 2005. We note, however, that the
components have taken certain actions that suggest they may be challenged
to meet future recruiting and retention goals.

Components Generally Met Aggregate Recruiting Goals in Past 6 Fiscal
Years, but Five Components Experienced Recruiting Difficulties in Fiscal
Year 2005

Table 1: Percentage of Active Duty Enlisted Aggregate Recruiting Goals Met
for Fiscal Years 2000 through 2005

      Fiscal            Army        Navy        Marine Corps        Air Force 
                                                             
       year                                                  
2000                  100         100                 100              102 
2001                  100         100                 100              102 
2002                  100         100                 101              102 
2003                  100         100                 100              100 
2004                  101         101                 100              101 
2005                   92         100                 100              102 

Source: DOD.

2: Percentage of Reserve Component Enlisted Aggregate Recruiting Goals Met
for Fiscal Years 2000 through 2005

            National       Army       Navy      Marine         Air  Air Force 
               Guard    Reserve    Reserve       Corps    National    Reserve 
                                               Reserve       Guard 
                                        81         101         106         80 
2001          103        102        101         102          87        110 
2002          105        107        102         103         106        114 
2003           82        102        106         101         148        101 
2004           87        101        111         102          94        111 
2005           80         84         88         102          86        113 

Fiscal Years, but the Navy Experienced Retention Difficulties in Fiscal
Year 2005

As with recruiting, the active, reserve, and National Guard components
generally met or surpassed their enlisted aggregate retention goals during
the past 6 fiscal years, but in fiscal year 2005, 1 of the 10 components
experienced retention shortages. DOD's active components track retention
by years of service and first, second, or subsequent enlistments.11 Table
3 shows that from fiscal years 2000 through 2004, the Army met all of its
retention goals and that the 3 remaining active components missed some of
their retention goals in 1 or 2 years during that period by at most 8
percent. For example, the Air Force did not meet its goal for second term
reenlistments by up to 8 percent during this period. In fact, the Air
Force did not meet this goal in 4 of the past 6 fiscal years and missed
its goal for career third-term reenlistments in 2000, 2001, and 2002. The
Navy did not meet its goal for reenlistments among enlisted servicemembers
who have served from 10 to 14 years in 3 of the past 5 fiscal years, and
the Marine Corps did not meet its goal for subsequent reenlistments in
fiscal year 2003 only.

In fiscal year 2005, retention data again show most active components
generally met their enlisted aggregate retention goals, with the exception
of the Navy. The Navy did not meet its end-of-year retention goals for
servicemembers with less than 6 years of service by about 2 percent, and
for servicemembers with 6 to 10 years of service by about 8 percent.
Appendix III contains more detailed information on active components'
retention goals and achievements.

Table 3: Percentage of Active Duty Enlisted Aggregate Retention Goals Met
for Fiscal Years 2000 through 2005

                                        

Component  Percentage Percentage Percentage Percentage Percentage Percentage 
                 of goal    of goal    of goal    of goal    of goal    of goal 
              met (2000) met (2001) met (2002) met (2003) met (2004) met (2005) 
Army                                                              
Initial         107.0      101.3      101.7      110.2      108.3      103.3 
Mid-career      101.8      101.6      101.6      105.9      104.1      102.7 
Career          106.1      101.7      104.7      100.4      109.2      128.5 
Navy                                                              
Zone A            N/A       99.8      104.8      110.4       96.6       97.7 
Zone B            N/A       98.8      102.1      105.1      100.3       91.6 
Zone C            N/A       95.5       97.1      102.2      102.2       99.8 
Marine                                                            
Corps                                                             
First term      100.9      100.0      102.5       99.6      100.6      103.4 
Subsequent        N/A        N/A      125.5       94.2      137.3      137.6 
Air Forcea                                                        
First term       96.5      102.0      131.1      110.0      114.5      107.7 
Second           92.9       91.9      104.4       92.3       93.3      115.9 
term                                                              
Career           95.6       94.9       99.6      100.2      102.1      105.9 

Source: DOD.

Note: N/A indicates that data were not available or incomplete.

aThe Air Force introduced new metrics-Average Career Length and Cumulative
Continuation Rates-in July 2005 to more accurately measure enlisted
retention patterns.

DOD tracks reserve and National Guard components' retention through
attrition rates, a measure of the ratio of people who leave those
components in a given year compared to the components' total authorized
personnel levels. These components establish attrition goals, which
represent the maximum percentage of the force that they can lose each year
and still meet authorized personnel levels. Annual attrition ceilings were
originally established in fiscal year 2000 and have remained unchanged for
each of the components.  Table 4 shows that the reserve and National Guard
components were generally at or below their attrition thresholds, thereby
meeting their retention goals. Only three components, the Army National
Guard, Army Reserve, and Air National Guard exceeded their attrition
thresholds during fiscal years 2000 through 2003, and these thresholds
were exceeded by about 1 percentage point or less.

Table 4: Percentage of Reserve and National Guard Enlisted Aggregate
Attrition Goals and Achievements for Fiscal Years 2000 through 2005

                                        

Component      Goal Fiscal Fiscal Fiscal Fiscal Fiscal Fiscal Fiscal Fiscal 
             (ceiling)   year   year   year   year   year   year   year   year 
                         2000   2001   2002   2003   2004   2000   2004   2005 
                       actual actual actual actual actual actual actual actual 
                                                            year   year   year 
                                                              to     to     to 
                                                            date   date   date 
                                                          (June) (June) (June) 
Army           19.5   18.0   20.0   20.6   18.1   18.6   14.4   14.1   15.6 
National                                                             
Guard                                                                
Army           28.6   29.4   27.4   24.6   22.1   22.6   21.6   15.6   17.2 
Reserve                                                              
Navy           36.0   27.1   27.6   26.5   26.5   28.2   21.7   21.8   23.9 
Reserve                                                              
Marine         30.0   28.5   26.4   26.0   21.4   26.3   22.1   21.0   16.0 
Corps                                                                
Reserve                                                              
Air            12.0   11.0    9.6    7.2   12.7   11.5    8.8    9.0    7.8 
National                                                             
Guard                                                                
Air Force      18.0   13.9   13.4    8.7   17.0   13.6   12.0   10.3   11.1 
Reserve                                                              

Source: DOD.

Several Factors Suggest Recruiting and Retention Difficulties Are Likely
to Continue

Several factors suggest the components are likely to continue experiencing
difficulties in meeting their aggregate recruiting and retention goals in
the future. DOD previously reported that over half of today's youth
between the ages of 16 and 21 are not qualified to serve in the military
because they fail to meet the military's entry standards.12 In addition,
all active components are experiencing reduced numbers of applicants in
their delayed entry programs. Also, each of the components initiated a
stop loss program at various times in the past 6 fiscal years that
prevented servicemembers from leaving active duty after they completed
their obligations, although the Army, Army National Guard, and Army
Reserve are the only components still employing stop loss. Furthermore,
the Army Reserve has recalled members of the Individual Ready Reserve.

Delayed Entry Program

All of the active components are experiencing shrinking numbers of new
recruits in their delayed entry programs.13 According to a DOD official
from the Office of the Secretary of Defense, the delayed entry program is
viewed as a depository for future soldiers, sailors, and airmen.  When
prospects sign their contracts, they enter into the pool of applicants
awaiting the date that they report to basic training. While in the delayed
entry program, the applicants are the responsibility of the recruiter and,
as such, are taught basic military protocols and procedures, such as
saluting and rank recognition. Applicants generally spend no more than a
year in the delayed entry program and no less than 10 days. Before being
released from the delayed entry program, applicants are medically
qualified, take an initial oath of enlistment, and perform other personal
business prior to reporting to basic training. According to the same DOD
official, a healthy delayed entry program is imperative to a successful
recruiting year. If the active components come in at or near their delayed
entry program goals for the year, they can be relatively sure they will
achieve their annual recruiting goals. If they fall short of their delayed
entry program goals, the components try to make up the shortfalls by
sending individuals to basic training as early as the same month in which
they sign enlistment papers.

Typically, the active components prefer to enter a fiscal year with 35
percent to 65 percent of their coming year's accession goals, depending on
the component, already filled by recruits in the delayed entry program.
Figure 1 shows the percentage of new recruits in the delayed entry
programs compared to the components' goals for fiscal years 2003 through
2006. For example, the Army's goal is to enter each fiscal year with 35
percent of its upcoming annual accession goal already in the delayed entry
program. The Army exceeded this goal when it entered fiscal year 2004 with
46 percent of its annual accession goal already in the program. However,
it entered fiscal year 2005 with only 25 percent of its accession goal in
the program and, as of August 2005, is projected to enter fiscal year 2006
with 4 percent of its accession goal in the program. The Navy, with an
annual goal of 65 percent for its delayed entry program, is projected to
enter fiscal year 2006 with almost 36 percent of its accession goal in the
program. The Marine Corps, with an annual delayed entry program goal of 43
percent, entered fiscal year 2004 well above this goal, with 71 percent of
its accession goal in the program, 54 percent in 2005, and a projected 26
percent in fiscal year 2006. Similarly, the Air Force, with a delayed
entry program goal of 43 percent, projected to enter fiscal year 2006 with
almost 22 percent of its accession goal in the program. The fact that all
the active duty components entered fiscal year 2006 with at least 40
percent fewer recruits in their delayed entry programs than desired
suggests that the active duty components will likely face recruiting
difficulties in fiscal year 2006.

Figure 1: Percentage of New Recruits in Delayed Entry Programs Compared to
the Components' Goals for Fiscal Years 2003 through 2006

Notes: Data on the Marine Corps's 2003 delayed entry program were not
available. All 2006 data cover through the end of July.

Stop Loss

Although some components have employed stop loss over the past several
years, the Army, Army Reserve, and Army National Guard are the only
components currently using it. The stop loss program, according to several
Army officials, is used primarily for units that are deployed and is
intended to maintain unit cohesion. A DOD official told us that in June
2005, the Army stop loss program affected over 15,000 soldiers, or less
than one-tenth of a percent of DOD's total military force-9,044 active
component soldiers, 3,762 reserve soldiers, and 2,480 National Guard
soldiers.  The active Army and Army Reserve stop loss program takes effect
90 days prior to unit deployment or with official deployment order
notification, and remains in effect through the date of redeployment to
permanent duty stations, plus a maximum of 90 days.  Army headquarters'
officials said that several Army initiatives, such as restructuring and
rebalancing the active and reserve component mix, will, over time,
eliminate the need for stop loss.  Congress has expressed concern that the
use of stop loss to meet overall personnel requirements may have a
negative impact on recruiting and retention and the public's perception of
the military. Another Army official told us that the attention this
program has received in the media may have created some of the negative
implications on the public's perception of military service. Additionally,
an Army Reserve official we spoke with stated that when active duty units
are affected by stop loss, servicemembers who have not completed their
military obligations in those units may be delayed in transitioning from
active duty into the reserve or National Guard components, potentially
creating more difficulties for these components to meet their recruiting
and retention goals.

Individual Ready Reserve

The Army Reserve has also recalled members of the Individual Ready
Reserve-which, according to an Army Reserve official, is used to fill
personnel shortfalls in active, reserve, and National Guard units-to
address recruiting and retention difficulties. All soldiers, whether in an
active, reserve, or National Guard component, agree to at least an 8-year
service commitment in their initial enlistment contracts. This obligation
exists regardless of how much time is to be served in the active, reserve,
or National Guard component, or some combination of the active and reserve
or National Guard components under the enlistment contract. If the soldier
is separated from the active duty Army, reserve, or National Guard
component before the 8-year commitment has been completed, the soldier may
elect to remain in active duty Army, affiliate with the reserves, or be
assigned to the Individual Ready Reserve. In the latter case,
servicemembers are subject to recall, if needed. Almost 7,000 soldiers,
including about 600 servicemembers who volunteered to serve and about
6,400 others under contractual obligation, have been deployed from the

Individual Ready Reserve since 2002. As of August 2005, over 4,000 of
these soldiers were still on active duty, serving a maximum of 2 years.14

Components Have Exceeded Authorized Personnel Levels for Some Occupational
Specialties and Experienced Shortages in Others

All components exceeded authorized personnel levels for some occupational
specialties and did not meet others. Specifically, we found certain
occupational specialties have been consistently over- or underfilled when
compared to their actual personnel authorizations.15 We believe these
consistently overfilled and underfilled occupational specialties raise
critical questions. First, what is the cost to the taxpayer to retain
thousands more personnel than necessary in consistently overfilled
occupational specialties? Second, how can DOD components continue to
effectively execute their mission with consistently underfilled
occupational specialties? However, because DOD lacks information from the
components on all over- and underfilled occupational specialties,
including reasons why these occupational specialties are over- and
underfilled, it cannot address these questions and develop a plan to
assist the components in addressing the root causes of its recruiting and
retention challenges.

Certain Occupational Specialties Have Been Consistently Over- or
Underfilled Compared to Their Authorized Personnel Levels

Of nearly 1,500 enlisted occupational specialties across DOD, about 19
percent were consistently overfilled and about 41 percent were
consistently underfilled from fiscal years 2000 through 2005, as shown in
figure 2.16 In fiscal year 2005 alone, within the occupational specialties
that consistently exceeded authorization, there were almost 31,000 more
servicemembers in these occupational specialties than authorized. At the
same time, DOD was not able to fill over 112,000 positions in consistently
underfilled occupational specialties.

Figure 2: Percentage of Enlisted Occupational Specialties That Were
Consistently Over- or Underfilled across DOD for Fiscal Years 2000 through
2005

Note: We defined consistently over- or underfilled as being over or under
the occupational specialty's authorized level for 5 or 6 fiscal years.

aAll other occupational specialties refers to those occupational
specialties that have not been consistently over- or underfilled from
fiscal years 2000 through 2005.

The percentage of consistently over- and underfilled occupational
specialties varies across the components. For example, from fiscal years
2000 through 2005, the percentage of consistently overfilled occupational
specialties ranged from 1 percent in the active Navy to 44 percent in the
Navy Reserve. Similarly, from fiscal years 2000 through 2005, the
percentage of consistently underfilled occupational specialties ranged
from 16 percent in the active Army to 65 percent in the active Navy. Table
5 provides information on consistently over- and underfilled occupational
specialties for each component.17 Appendix IV provides more detailed
information on the occupational specialties that were consistently over-
and underfilled for each component.

Table 5: Percentage of Consistently Overfilled and Underfilled Active and
Reserve Enlisted Occupational Specialties for Fiscal Years 2000 through
2005

                                        

Component Total number  Consistently Consistently 
                       of  overfilleda  underfilled  
             occupational     Number of   Percentage    Number of   Percentage 
              specialties  occupational           of occupational           of 
                   (2005)   specialties occupational  specialties occupational 
                                         specialties               specialties 
Army               182            33           18           29           16 
Navy               74b             1            1           48           65 
Marine             245            51           21           61           25 
Corps                                                          
Air Force          124            10            8           68           55 
Total              625            95           15          206           33 
active                                                         
duty                                                           
Army               188            27           14          114           61 
National                                                       
Guard                                                          
Army               174            45           26           72           41 
Reserve                                                        
Navy                62            27           44           12           19 
Reservec                                                       
Marine             218            38           17          108           50 
Corps                                                          
Reserve                                                        
Air                103             9            9           59           57 
National                                                       
Guard                                                          
Air Force          114            37           32           40           35 
Reserve                                                        
Total              859           183           21          405           47 
reserve                                                        
and                                                            
National                                                       
Guard                                                          
Total            1,484           278           19          611           41 
active                                                         
duty,                                                          
reserve                                                        
and                                                            
National                                                       
Guard                                                          

Source: GAO analysis of DOD data.

Note: Data for 2000 through 2004 are as of September 30. Data for 2005 are
as of June 30.

aWe defined consistently over- or underfilled as being over or under the
occupational specialty's authorized level for 5 or 6 fiscal years.

bNavy provided data for the occupational specialty rating level and not
the skill classification level.

cNavy Reserve did not provide data for 2000 and 2001; therefore we defined
consistently over- or underfilled for 4 years for the Navy Reserve.

Our analysis further shows the number of servicemembers that exceeded the
authorizations assigned to occupational specialties ranged from just 1
servicemember to almost 6,000 servicemembers. For example, the active Army
Reserve Technical Engineer occupational specialty was overfilled by 1
servicemember in fiscal year 2000, and the active Navy Seaman occupational
specialty was overfilled by almost 6,000 servicemembers in that same year.
Similarly, we found shortages in the number of servicemembers assigned to
occupational specialties ranged from just 1 servicemember to over 8,200
servicemembers. For example, the Marine Corps Reserve Parachute Rigger
occupational specialty was underfilled by 1 servicemember in fiscal year
2000 and the active Navy Hospital Corpsman occupational specialty was
underfilled by over 8,200 servicemembers in that same year.

Table 6 presents several reasons provided by component officials to
explain why certain occupational specialties have been consistently
overfilled. For example, an Air Force Reserve official told us that this
component recruited more Tactical Aircraft Avionics Systems personnel than
authorized because it is a high-demand, technical occupational specialty
that is critical to one of the Air Force Reserve's missions. As a result,
this occupational specialty has been consistently overfilled by about 160
to 240 individuals each year for the past 6 years. Furthermore, we found
that the Army's Cavalry Scout occupational specialty was overfilled by
over 200 to almost 1,000 individuals in the past 5 years and an Army
official stated that this occupational specialty was anticipated to
increase its personnel authorization levels. According to Army
projections, the current strength is still 1,700 short of the fiscal year
2007 target. Moreover, several component officials told us that some of
their occupational specialties have consistently been overfilled because
their components needed to meet legislatively mandated aggregate personnel
levels, and to do so, they assigned personnel to occupational specialties
that did not necessarily need additional personnel.

Table 6 also presents several reasons provided by component officials to
explain why certain occupational specialties have been consistently
underfilled. For example, component officials told us that extensive
training requirements have led the Army's Special Forces Medical Sergeant,
the Army National Guard's Power-Generation Equipment Repairer, and the
Marine Corps's Counterintelligence Specialist occupational specialties to
be consistently underfilled for the last 5 or 6 years. Furthermore, an
official in the Army National Guard stated that the occupational
specialty, Motor Transport Operator, was consistently underfilled by at
least 1,800 to about 4,800 individuals in the past 6 years because the
entire nation is short of truck drivers, which poses a recruiting
challenge.

Table 6: Examples of Reasons for Consistently Over- or Underfilled
Occupational Specialties as Reported by Component Officials

                                        

    Reason an occupational specialty    Example of occupational specialties   
       was consistently overfilled     
Significant decrease in             Avenger Crewmember (Army)              
authorizations over several years                                          
                                       Combat Engineer (Army)                 
                                                                              
                                       Personnel Clerk (Marine Corps Reserve) 
                                                                              
                                       Ground Radar Systems (Air Force)       
Critical technical skill; high      Tactical Aircraft Avionics Systems     
demand                              (Air Force Reserve)                    
Heavily utilized and deployed; high Security Forces (Air Force Reserve)    
turnover                            
Overall force structure             Cavalry Scout (Army)                   
changes-current strength is still                                          
short of future target              Infantryman (Army)                     
Variations in attrition behavior    Patient Administration Specialist      
significantly influence low-density (Army)                                 
occupational specialties                                                   
                                       Mortuary Affairs Specialist (Army      
                                       National Guard)                        
Meet personnel requirements         Supply (Air Force Reserve)             
                                                                              
                                       Personnel (Air Force Reserve)          
Entry level occupational            Automotive Organizational Mechanic     
specialty-need overage to grow to   (Marine Corps Reserve)                 
intermediate level                                                         
                                       Meteorological and Oceanographic       
                                       Observer (Marine Corps)                
Reason an occupational specialty    Example of occupational specialties    
was consistently underfilled        
High demand and high probability of Infantryman (Army National Guard)      
deployment                          
Extensive training or qualification Special Forces Medical Sergeant (Army) 
requirements                                                               
                                       Power-Generation Equipment Repairer    
                                       (Army National Guard)                  
                                                                              
                                       Maintenance (Air Force Reserve)        
                                                                              
                                       Special Investigations (Air Force      
                                       Reserve)                               
                                                                              
                                       Counterintelligence Specialist (Marine 
                                       Corps)                                 
                                                                              
                                       Reconnaissance Man (Marine Corps       
                                       Reserve)                               
Clearance requirements and highly   Signal Collection/Identification       
technical skills                    Analyst (Army)                         
                                                                              
                                       Counterintelligence Specialist (Marine 
                                       Corps)                                 
Training pipeline delays            Dental Technician (Navy)               
Market shortage                     Motor Transport Operator (Army         
                                       National Guard)                        
Overall force structure             Field Artillery Automated Tactical     
changes-increase in authorizations  Data System Specialist (Army)          
                                                                              
                                       Combat Control (Air Force)             
                                                                              
                                       Intelligence Applications (Air Force)  
                                                                              
                                       Master at Arms (Navy Reserve)          

Source: DOD.

We believe that consistently over- and underfilled occupational
specialties are a systemic problem for DOD that raises questions about the
validity of occupational specialty authorizations. The fact that DOD has
consistently experienced almost 280 overfilled occupational specialties
raises particular questions about affordability. We determined that it
cost the federal government about $103,000 annually, on average, to
compensate each enlisted active duty servicemember in fiscal year 2004.
Accordingly, compensating the almost 31,000 servicemembers who served in
occupational specialties that exceeded authorized personnel levels for
fiscal year 2005 was costly. Similarly, the consistently underfilled
occupational specialties raise the question about the components' ability
to continue to achieve their mission. The fact that over 112,000 positions
in consistently underfilled occupational specialties were vacant in fiscal
year 2005 raises concerns about whether the authorized personnel levels
for these occupational specialties are based on valid requirements.

DOD Lacks Information on Recruiting and Retention Challenges for All Over-
and Underfilled Occupational Specialties

While the active components have started reporting information to DOD on
certain occupational specialties, the department currently lacks
information on all occupational specialties, which prevents a complete
understanding of the components' recruiting and retention challenges. The
Office of the Under Secretary of Defense (OUSD) for Personnel and
Readiness directed the active components to report their critical
occupational specialties for recruiting, beginning in 2004, in OUSD's
personnel and readiness report-an update provided to the Secretary of
Defense each quarter. Table 7 provides the OUSD-defined criteria for
occupational specialties that are critical for recruiting. An occupational
specialty must meet at least one criterion to be considered critical; the
fact that an occupational specialty is underfilled is only one of the
criteria. Accordingly, the active components identify and report to OUSD
about 10 percent of their occupational specialties that they deem critical
for recruiting. For example, in OUSD's third quarter fiscal year 2005
personnel and readiness report to the Secretary of Defense, the active
components reported accessions information on 67 occupational specialties.
In addition, the active components reported the reason why the
occupational specialties reported were deemed critical, the accession goal
for these occupational specialties, and year-to-date accessions achieved.
Beginning in 2005, OUSD further directed the active components to report
critical occupational specialties for retention as well. Table 7 also
provides the OUSD-defined criteria for occupational specialties that are
critical for retention. In fiscal year 2005, each of the active components
reported 10 occupational specialties, for a total of 40 occupational
specialties, which they deemed critical for retention. Again, the active
components reported the reason why the occupational specialties reported
were deemed critical; the retention goal; number of personnel retained to
date; and the number of servicemembers authorized and assigned, or the
fill rate, for each occupational specialty reported. These 40 occupational
specialties, however, represent only 6 percent of the 625 total active
duty occupational specialties. Collectively, the critical occupational
specialties (such as Army Infantrymen and Marine Corps Counter
Intelligence Specialists) that the active components report on represent
at most 16 percent of the 625 active duty occupational specialties.18
Therefore, OUSD is not receiving information on at least 84 percent of
active duty occupational specialties. Furthermore, the reserve and
National Guard components are not required to report to OUSD any
information on their combined 859 occupational specialties. This means
that OUSD receives fill rate information on less than 3 percent of all
occupational specialties.

Table 7: OUSD's Criteria for Determining Occupational Specialties That Are
Critical for Recruiting and Retention

                                        

Critical for recruiting          (1) Crucial to combat readiness           
                                                                              
                                      (2) Undermanned in the force            
                                                                              
                                        (3) Unfilled class seats              
                                                                              
                                        (4) High volume required              
                                                                              
                                      (5) High entrance standards             
                                                                              
                                         (6) Undesireable duty                
Critical for retention  (1) Must have a history of being or must be        
                           projected to be underfilled                        
                                                                              
                           (2) Must be mission critical, which is defined as  
                                                                              
                           (a) technical skills requiring high training       
                           costs, replacement costs, or both;                 
                                                                              
                           (b) skills in high demand in the civilian sector;  
                                                                              
                           (c) challenging to recruit into;                   
                                                                              
                           (d) crucial to combat readiness; or                
                                                                              
                           (e) low-density/high-demand skill                  

Source: DOD.

Note: An occupational specialty must meet one criterion to be considered
critical for recruiting or for retention.

In July 2005, DOD issued Directive 1304.20 that requires the components to
meet aggregate and occupational-specialty-specific authorized personnel
levels. However, this directive does not include any reporting
requirements and therefore does not specifically require the components to
report on over- and underfilled occupational specialties. Until all
components are required to provide complete information on all over- and
underfilled occupational specialties, including reasons why these
occupational specialties are over- and underfilled, and DOD determines if
the new directive is having its desired effect, the department cannot
develop an effective plan to assist the components in addressing the root
causes of recruiting and retention challenges. Moreover, DOD is not in the
position to assess the economic impact on the taxpayer of thousands of
consistently overfilled occupational specialties or determine whether it
can continue to effectively execute the mission requirements with
consistently underfilled occupational specialties.

DOD Has Taken Steps to Enhance Recruiting and Retention Efforts, but
Limited Information Makes It Difficult to Determine Financial Incentives'
Effectiveness

DOD's components spend hundreds of millions of dollars each year on
programs to enhance their recruiting and retention efforts; however, the
department lacks the information needed to determine whether financial
incentives are targeted most effectively. Budgets for these
programs-recruiting, advertising, and financial incentives-have fluctuated
over the last 6 fiscal years.19 Specifically, in fiscal year 2005, five
components increased their recruiter forces and three components revised
their advertising programs. Additionally, various components increased
enlistment and reenlistment bonuses to enhance recruiting and retention
for specific occupational specialties. However, because OUSD does not
require the components to fully justify the financial incentives paid to
servicemembers in all occupational specialties, DOD lacks the information
needed to ensure that funding spent on recruiting and retention is
appropriately and effectively targeted to occupational specialties for
which the components have the greatest need or to determine if other types
of corrective action are needed. In fact, our analysis shows that
components offered some of these incentives to servicemembers in
consistently overfilled occupational specialties.

Recruiting Programs, Advertising, and Financial Incentive Budgets Have
Fluctuated

Budget data for fiscal years 2000 through 2006 show that DOD's recruiting
programs, advertising, and financial incentive budgets fluctuated from
$1.7 billion to $2.1 billion during those years, and that DOD spent a
total of $9.9 billion on these programs over the first 5 years.20 Fiscal
years 2005 and 2006 budget estimates for these programs total $1.7 billion
and $1.8 billion, respectively.

DOD's overall annual expenditures for recruiting programs fluctuated from
approximately $631.6 million to $800.7 million from fiscal years 2000 to
2004, and budgeted estimates of recruiting expenditures for fiscal year
2005 were $639.5 million, and for fiscal year 2006, $726.2 million. These
recruiting expenditures cover essential items for recruiting commands and
stations throughout the United States, including meals, lodging, and
travel of applicants; recruiter expenses;21 vehicle operation and
maintenance; office spaces; and other incidental expenses. Figure 3 shows
actual recruiting expenditures for fiscal years 2000 through 2004 and
budgeted recruiting expenditures for fiscal years 2005 and 2006.

Figure 3: Total DOD Recruiting Program Budget for Fiscal Years 2000
through 2006

Note: The data from 2000 through 2004 are actual expenditures. The 2005
and 2006 data are the amounts budgeted for those years.

DOD's annual advertising expenditures fluctuated from approximately $506.6
million to $663.0 million from fiscal years 2000 to 2004, and budgeted
advertising expenditures for fiscal year 2005 were $570.7 million, and for
fiscal year 2006, $543.9 million-a decrease of almost $27 million. Figure
4 shows actual advertising expenditures for fiscal years 2000 through 2004
and budgeted advertising expenditures for fiscal years 2005 and 2006.

Figure 4: Total DOD Advertising Budget for Fiscal Years 2000 through 2006

Note: The data from 2000 through 2004 are actual expenditures. The 2005
and 2006 data are the amounts budgeted for those years.

DOD's annual expenditures for enlistment bonuses-targeted to new
recruits-fluctuated from approximately $162.1 million to $301.2 million
from fiscal years 2000 to 2004, and budgeted enlistment bonus expenditures
for fiscal year 2005 were $149.3 million, and for fiscal year 2006, $175.0
million. Figure 5 shows actual enlistment bonus expenditures for fiscal
years 2000 through 2004 and budgeted enlistment bonus expenditures for
fiscal years 2005 and 2006.

Figure 5: Total DOD Enlistment Bonus Program Budget for Fiscal Years 2000
through 2006

Note: The data from 2000 through 2004 are actual expenditures. The 2005
and 2006 data are the amounts budgeted for those years.

DOD's total expenditures for selective reenlistment bonuses-targeted to
servicemembers already in the military who reenlist for an additional
number of years-fluctuated from approximately $420.5 million to $551.6
million from fiscal years 2000 to 2004,22 and budgeted reenlistment bonus
expenditures for fiscal years 2005 and 2006 were $346.1 million and $387.7
million, respectively. Our analysis of actual expenditures for
reenlistment bonuses in fiscal year 2005 for the active Navy, Marine
Corps, and Air Force officials, show their expenditures to be within $13.5
million, $4.8 million, and $11.0 million of their budgeted amounts,
respectively.23 However, it is significant to note that the active Army
component spent approximately $426.0 million on reenlistment bonuses in
fiscal year 2005, or almost eight times more than its budgeted amount of
$54.3 million, to meet its retention goals. Figure 6 shows actual
selective reenlistment bonus expenditures for fiscal years 2000 through
2004 and budgeted selective reenlistment bonus expenditures for fiscal
years 2005 and 2006.

Figure 6: Total DOD Selective Reenlistment Bonus Program Budget for Fiscal
Years 2000 through 2006

Note: The data from 2000 through 2004 are actual expenditures. The 2005
and 2006 data are the amounts budgeted for those years.

Five Components Have Increased Number of Recruiters

While the actual number of recruiters fluctuated for all components from
fiscal year 2000 through fiscal year 2005, five components-the Army, Army
Reserve, Air Force, Air National Guard, and Army National Guard-increased
their numbers of recruiters between fiscal years 2004 and 2005. Table 8
shows that the Army added almost 1,300 recruiters for a total of 6,262
recruiters, and the Army Reserve added over 450 recruiters for a total of
1,296 recruiters from September 2004 through June 2005. The Air Force and
Air National Guard also increased their number of recruiters, from 1,480
to 1,487, and from 373 to 376, respectively. Of all the components, the
Army National Guard has shown the greatest increase in its recruiter
force-increasing the total number of recruiters from 2,702 in fiscal year
2004 to 4,448 in fiscal year 2005.

Table 8: Number of Recruiters by Component

                                        

         Components           2000     2001     2002     2003    2004   2005a 
Army                      6,257    6,116    6,552    5,503   4,965   6,262 
Navy                      5,000    5,000    5,000    4,470   4,370   4,200 
Marine Corpsb             2,947    3,038    3,215    3,353   3,330   3,031 
Air Force                 1,238    1,452    1,590    1,572   1,480   1,487 
Army National Guard       2,650    2,664    2,622    2,580   2,702   4,448 
Army Reserve              1,259    1,100    1,034      905     841   1,296 
Navy Reserve                N/A      N/A      733      733     733     733 
Air National Guard          347      353      371      373     373     376 
Air Force Reserve           229      237      263      264     258     245 

Source: DOD components.

Note: N/A indicates that data were not available or incomplete.

aThe 2005 data cover October 2004 through June 2005.

bMarine Corps Reserve recruiters are included in the Marine Corps numbers.

Some Components Have Made Adjustments to Their Advertising Programs

In fiscal year 2005, the Army, Army Reserve, and Army National Guard made
specific adjustments to their advertising programs.24 A primary focus of
their recent advertising efforts has shifted to the "influencers," those
individuals who play a pivotal role in a potential recruit's decision to
join the military, including parents, teachers, coaches, other school
officials, and extended family members. For example, the Army focused
efforts on using its recruiting Web site as a vehicle to provide video
testimonials of soldiers explaining, in their own words, what it means to
be a soldier and why others should enlist. The Army and Army Reserve
increased support to local recruiters through more public affairs efforts
and by encouraging command support of their Special Recruiter Assistance
Program. This program offers soldiers who have served in Operation Iraqi
Freedom or Operation Enduring Freedom the opportunity to return to their
hometowns and assist the local recruiters in gaining high school graduate
leads and enlistments.

Army officials stated that this program not only improves the number of
contacts it makes, but it also provides interested individuals with a
different perspective on operations overseas, which can assist in
counteracting some of the negative information potential recruits receive
from the media or influencers. The Army National Guard refocused its
advertising by standardizing the appearance of its storefront recruiting
offices to increase recognition and opening career centers in locations
that provided it greater market exposure and access to the target
populations. Additionally, the Army National Guard initiated a new
"American Soldier" campaign that refines its message since September 11,
2001, and reflects the new realities of a prolonged recruiting and
retention environment.

Some DOD Components Have Increased Financial Incentives to Recruits and
Servicemembers

DOD components also made adjustments to their financial incentives-the
most costly of the three tools-to improve their ability to recruit and
retain servicemembers. Over the last fiscal year, DOD made changes to
existing financial incentives and introduced new financial incentives. For
example, DOD expanded the pool of servicemembers who are eligible to
receive a selective reenlistment bonus. Selective reenlistment bonuses are
designed to provide a financial incentive for an adequate number of
qualified mid-career enlisted members to reenlist in designated "critical"
occupational specialties where retention levels are insufficient to
sustain current or projected levels necessary for a component to
accomplish its mission. The statutory authority for this bonus was amended
in the Fiscal Year 2004 Authorization Act to allow the Secretary of
Defense to waive the critical skill25 requirement for members who reenlist
or extend an enlistment while serving in Afghanistan, Iraq, or Kuwait in
support of Operations Enduring Freedom and Iraqi Freedom.26

In addition, in February 2005, DOD announced a new retention bonus for
Special Operations Forces servicemembers (Army Special Forces, Navy SEALs,
Air Force pararescue, plus a few other occupational specialties) who
decide to remain in the military beyond 19 years of service. The largest
bonus, $150,000, may be provided to eligible servicemembers who sign up
for an additional 6 years of service. Eligible servicemembers who sign up
for shorter extensions may qualify for smaller bonuses; servicemembers who
extend for 1 additional year, for example, receive $8,000.

Individual components also implemented changes over the last fiscal year.
Specifically, to address recruiting, the active Army component implemented
a minimum $5,000 bonus for all qualified recruits-generally based on
graduation from high school and their scores on the Armed Forces
Qualification Test-who enlist for 3 or more years in any military
occupational specialty. Additionally, qualified recruits with bachelor's
degrees who enlist for 2 or more years in any occupational specialty may
now receive bonuses up to $8,000; previously there were no bonuses for
recruits with those educational qualifications. The Army also increased
its maximum enlistment bonus amount, from $10,000 up to $14,000, for
applicants who enlist for 3 or more years into certain occupational
specialties, such as Cannon Crewmember, Cavalry Scout, and Crypto-Linguist
Analyst.

To address retention, the active Army, Navy, and Air Force components
implemented the Critical Skills Retention Bonus program and the Assignment
Incentive Pay program. The Critical Skills Retention Bonus program allows
the components to target reenlistment bonuses at certain occupational
specialties that have been identified as critical. The bonus is adjusted
to meet current operational needs. For example, in fiscal year 2004, the
Army offered the Critical Skills Retention Bonus to soldiers who were
serving in special operations occupational specialties. In fiscal year
2005, the Army granted eligibility to 11 additional occupational
specialties. These occupational specialties included recruiters, unmanned
aerial vehicle operators, psychological operations specialists, and
explosive ordnance disposal specialists. The Assignment Incentive Pay
program, which provides up to $1,500 a month for enlisted servicemembers,
was approved by the Under Secretary of Defense for implementation by the
Navy, Air Force, and Army in early 2005.27 Assignment Incentive Pay is
used to encourage servicemembers to volunteer for difficult-to-fill
occupational specialties or assignments in less desirable locations. For
example, for personnel in special operations occupational specialties to
qualify for this pay, servicemembers must have more than 25 years of
service, be designated by the Special Operations Command combatant
commander as "operators," and remain on active duty for an additional
minimum of 12 months.

The Army also implemented a Life Cycle Unit Bonus program designed to
encourage servicemembers to commit to hard-to-fill occupational
specialties in targeted units in fiscal year 2005. Army officials stated
that this may help them address shortages of soldiers assigned to units at
certain locations. When the program began, soldiers received up to $15,000
if they reenlisted and agreed to serve in certain units stationed at Fort
Campbell, Kentucky; Fort Bliss and Fort Hood, Texas; and Fort Lewis,
Washington.

During fiscal year 2005, the Army Reserve and Army National Guard also
increased some of their incentives to address recruiting and retention
efforts. In fiscal year 2005, the Army allowed the reserve and National
Guard components to increase their prior service enlistment bonus from
$8,000 up to $15,000. Additionally, the bonus amount for a new recruit
with no prior military experience increased from $8,000 to $10,000.

Components Provide Limited Justifications to DOD on Financial Incentives
Given to Servicemembers in Overfilled Occupational Specialties

Although we found that the components regularly offered financial
incentives to servicemembers in consistently underfilled occupational
specialties, we also found that each of the active duty components
provided enlistment bonuses, selective reenlistment bonuses, or both to
servicemembers in consistently overfilled occupational specialties.28 DOD
only requires the components to provide general justifications for their
financial incentives in their budget documents and does not require the
components to specifically provide justifications for these incentives for
noncritical occupational specialties, which make up at least 84 percent of
all occupational specialties. Table 9 shows the number of consistently
overfilled active component occupational specialties in which
servicemembers received enlistment bonuses, selective reenlistment
bonuses, or both, from fiscal years 2000 through 2005.

Table 9: Number of Consistently Overfilled Occupational Specialties for
Which Active Duty Servicemembers Received Enlistment Bonuses, Selective
Reenlistment Bonuses, or Both for 5 or 6 Years from 2000 through 2005

                                        

Active duty Total number of           Number of     Number of 
    component     occupational        consistently  consistently 
                   specialties          overfilled    overfilled 
                        (2005)        occupational  occupational 
                                       specialties   specialties 
                                                      Enlistment    Selective 
                                                           bonus reenlistment 
                                                                        bonus 
Army                    182                  33            12            1 
Navy                     74                   1             1            0 
Marine                  245                  51            29           22 
Corps                                                         
Air Force               124                  10             1            1 
Total                   625                  95            43           24 

Source: GAO analysis of DOD data.

The number of consistently overfilled occupational specialties in which
servicemembers received enlistment bonuses, selective reenlistment
bonuses, or both for 5 or 6 years is relatively low when compared to the
total number of occupational specialties. However, the number of
overfilled occupational specialties for which bonuses were authorized in a
particular year can be considerably higher.

Table 10 shows the number of all overfilled occupational specialties in
which servicemembers received either an enlistment or selective
reenlistment bonus for fiscal years 2000 through 2005. For example, in
2003, 278 out of all 625 active duty occupational specialties, or 44
percent, were overfilled, and servicemembers in these occupational
specialties received enlistment or selective reenlistment bonuses.

Table 10: Number of Overfilled Occupational Specialties for Which Active
Duty Servicemembers Received Bonuses from 2000 through 2005

                                        

     Active duty component       2000    2001    2002    2003    2004    2005 
Army                            54      67      84      86      79      64 
Navy                             2       2       1      42      18      22 
Marine Corps                    77      92      98     121      82     106 
Air Force                       15       8      14      29      27       9 
Total                          148     169     197     278     206     201 

Source: GAO analysis of DOD data.

Component officials provided reasons why they offered enlistment and
selective reenlistment bonuses to servicemembers in overfilled
occupational specialties. Specifically, an Army official explained that
they will target their bonuses to servicemembers at specific pay grades
that are actually underfilled, even if the occupational specialty as a
whole may be overfilled. Additionally, an official we spoke with stated
that the requirement to meet legislatively mandated aggregate personnel
levels results in, at times, offering bonuses to servicemembers who will
serve in overfilled specialties, simply to meet their overall mandated
personnel levels.

Because enlistment and selective reenlistment bonuses generally range from
a few thousand dollars up to $60,000, providing these bonuses to
servicemembers in overfilled occupational specialties can be quite
costly.29 While OUSD requires components to report incentives given to
servicemembers in critical occupational specialties, it does not require
the components to provide fully transparent rationales for incentives it
provides to servicemembers in noncritical occupational specialties, which
as we have stated, make up at least 84 percent of the components' total
occupational specialties. Some of these noncritical occupational
specialties have been consistently overfilled in the past 6 fiscal years.
By not requiring the components to fully justify their rationale for
providing incentives to servicemembers in the consistently over- and
underfilled occupational specialties, OUSD lacks the information needed to
provide assurance to the Secretary of Defense and Congress that the amount
of funding spent on recruiting and retention efforts is appropriately and
effectively targeted to occupational specialties for which the components
have the greatest need.

Conclusions

Although DOD has reported that the components have generally met overall
recruiting and retention goals for the past several years, meeting these
goals in the aggregate can disguise the true challenges behind the
components' ability to recruit and retain servicemembers in the
occupational specialities needed to fulfill their mission requirements.
The fact that several occupational specialties have been consistently
overfilled raises critical questions about affordability and whether the
department is using its recruiting and retention resources most
effectively. Similarly, DOD's consistently underfilled occupational
specialties raise concerns as to how the department can meet operational
demands with what appear to be chronic shortages in certain occupational
specialties. This latter issue is particularly relevant given the stresses
on the force from prolonged operations in Iraq; the Global War on
Terrorism; and most recently, significant disaster relief efforts in the
Gulf Coast region. DOD is not in a position to develop a comprehensive
recruiting and retention plan to address these and other issues because it
lacks complete information from the 10 components on the occupational
specialties that are over- or underfilled and the reasons why these
conditions exist. Moreover, without this information, the department is
not in a position to effectively communicate its true recruiting and
retention challenges to Congress.

Recently, Congress has provided increasing amounts of funding to assist
DOD's recruiting and retention efforts. While some components have used
this funding to increase financial incentives to address both aggregate
and occupational-specialty-specific recruiting and retention challenges,
these increases in incentives are costly. Given the fiscally constrained
environment we are facing now and in years to come, DOD can no longer
afford to take a "business as usual" approach to managing its force. In
some cases, DOD's components have provided financial incentives to
servicemembers in occupational specialties that are overfilled. While
there may be valid reasons for providing these incentives to some
servicemembers in these occupational specialities, DOD does not require
the components to fully justify their decisions on financial incentives,
which restricts the department's ability to provide assurance to the
Secretary of Defense, Congress, and the taxpayer that the increasing
funding spent on recruiting and retention is appropriately and effectively
targeted to occupational specialties for which components have the
greatest need.

Recommendations for Executive Action

To provide greater understanding of the recruiting and retention issues
and improve the department's oversight for these issues, we recommend that
the Secretary of Defense direct the Under Secretary of Defense for
Personnel and Readiness, in concert with the Assistant Secretary of
Defense for Reserve Affairs, to take the following two actions:

o Require the 10 components to

o report annually on all (not just critical) over- and underfilled
occupational specialties,

o provide an analysis of why occupational specialties are over- and
underfilled, and

o report annually on and justify their use of enlistment and reenlistment
bonuses provided to servicemembers in occupational specialties that exceed
their authorized personnel levels.

o Develop a management action plan that will help the components to
identify and address the root causes of their recruiting and retention
challenges.

Agency Comments and Our Evaluation

In written comments on a draft of this report, DOD partially concurred
with our two recommendations. DOD's comments are included in this report
as appendix V.

DOD partially concurred with our first recommendation to require the ten
components to report annually to the Office of the Under Secretary of
Defense for Personnel and Readiness on all over- and underfilled
occupational specialties; provide an analysis of why specific occupational
specialties are over- and underfilled; and report annually on and justify
their use of enlistment and reenlistment bonuses provided to
servicemembers in occupational specialties that exceed their authorized
personnel levels. DOD stated that it already has visibility over
occupational specialties deemed most critical for retention, which it
captures through the Balanced Scorecard process. However, as we note in
this report, the occupational specialties that the components report as
critical for recruitment or retention account for only a small percentage
of the total number of occupational specialties-at most only 16 percent of
all occupational specialties are reported as critical. Therefore, the
department does not have visibility over at least 84 percent of its
occupational specialties. DOD asserted that our definition of over- and
underfilled occupational specialties (those that were over- or under their
authorized levels by one or more individuals) is unreasonably strict.
However, as we note in this report, we established this definition because
we found that DOD lacks common criteria that define thresholds for over-
and underfilled occupational specialties. In prior work, we determined
that it costs the federal government about $103,000 annually, on average,
to compensate each enlisted active duty servicemember in fiscal year 2004;
thus we believe each individual serving in an occupational specialty that
is over the authorized personnel level represents a significant cost to
the government. For example, we found about 8,400 active duty
servicemembers serving in consistently overfilled occupational specialties
in 2005. If we apply the 2004 average compensation amount to the 8,400
servicemembers, the additional cost to the taxpayer would be about $870
million. In addition, the taxpayer bears the unnecessary costs of
supporting over 22,000 servicemembers in consistently overfilled
occupational specialties in the reserve and National Guard components. DOD
also provided in its response an example of an overfilled occupational
specialty, and its rationale that this occupational specialty was
overfilled as a function of ramping up to meet a future strength
requirement. Our report acknowledges this and other reasons the components
provided for over- and underfilled occupational specialties. We believe
that this example underscores the need for our recommendation that the
components provide an analysis of why occupational specialties are over-
or underfilled. Without this type of analysis, OSD is not in a position to
assess the extent to which all specialties are over- or underfilled,
determine if the overfilled and underfilled positions are justified, and
identify any needed corrective action. Also, DOD agreed with the need to
closely manage financial incentive programs. However, we believe that DOD
needs sufficient information from the components to determine if the
reasons for offering bonuses to individuals in consistently overfilled
occupational specialties are, indeed, justified. We continue to be
concerned that all financial incentives may not be justified. Currently,
the components are not required to provide fully transparent rationales
for bonuses they provide to servicemembers in noncritical occupational
specialties, which as we have stated earlier, make up at least 84 percent
of the components total occupational specialties. Without greater
transparency over the use of financial incentives, the department cannot
truly know if funding spent on recruiting and retention efforts is
appropriately and effectively targeted to occupational specialties for
which the components have the greatest need.

DOD partially concurred with our second recommendation to develop a
management action plan that will help the components to identify and
address the root causes of their recruiting and retention challenges. In
response, DOD noted that its Enlisted Personnel Management Plan (EPMP),
formally established by DOD Directive 1304.20 in July 2005, substantially
achieves this recommendation. We believe DOD is moving in the right
direction in addressing recruiting and retention challenges and, in this
report, we acknowledge that DOD issued directive 1304.20 that requires the
components to meet aggregate and occupational specialty specific
authorized personnel levels. However, this plan cited in DOD's comments
did not exist at the time we conducted our audit work and we believe DOD
needs to continue to move forward to establish this plan. DOD also stated
that it has already laid the framework for this type of plan through
monthly reviews of other reports and quarterly reviews of its Balanced
Scorecard reports. DOD claimed these omissions in our draft report result
in an incomplete description of management controls. We disagree since as
stated earlier, the EPMP did not exist at the time we conducted our audit
work and furthermore, we do acknowledge in this report that the department
receives quarterly updates of critical occupational specialties through
the Office of the Under Secretary of Defense's personnel and readiness
report. Nevertheless, we continue to believe that these updates do not
provide OSD with full transparency and oversight since these quarterly
updates do not include information on at least 84 percent of active duty
occupational specialties or any of the combined 859 occupational
specialties of the reserve and National Guard components.

We are sending copies of this report to interested congressional members;
the Secretaries of Defense, the Army, the Navy and the Air Force; the
Commandant of the Marine Corps; and the Chiefs of the National Guard
Bureau, the Army Reserve, the Army National Guard, the Air Force Reserve,
the Air National Guard, the Navy Reserve, and the Marine Corps Reserve. We
will also make copies available to others upon request. In addition, the
report will be available at no charge on GAO's Web site at
http://www.gao.gov.

Should you or your staff have any questions regarding this report, please
contact me at (202) 512-5559 or [email protected]. Contact points for our
Offices of Congressional Relations and Public Affairs may be found on the
last page of this report. GAO staff members who made key contributions to
this report are listed in appendix VI.

Derek B. Stewart, Director Defense Capabilities and Management

List of Congressional Committees

The Honorable John Warner Chairman The Honorable Carl Levin Ranking
Minority Member Committee on Armed Services United States Senate

The Honorable Lindsey Graham Chairman The Honorable Ben Nelson Ranking
Minority Member Subcommittee on Personnel Committee on Armed Services
United States Senate

The Honorable Duncan L. Hunter Chairman The Honorable Ike Skelton Ranking
Minority Member Committee on Armed Services House of Representatives

The Honorable John M. McHugh Chairman The Honorable Vic Snyder Ranking
Minority Member Subcommittee on Military Personnel Committee on Armed
Services House of Representatives

Scope and MethodologyAppendix I

To conduct this body of work, we examined Department of Defense (DOD)
policies, regulations, and directives related to recruiting and retention
of military servicemembers. We also reviewed recruiting and retention
reports and briefings issued by GAO, DOD, the military services, the
Congressional Research Service, the Congressional Budget Office, and
research organizations such as RAND. Furthermore, we analyzed individual
components' databases containing recruiting and retention data on active,
reserve, and National Guard servicemembers. In the course of our work, we
contacted and visited the organizations and offices listed in table 11.

Table 11: Organizations and Offices Contacted during Our Review

                                        

            Name of organization or office                   Location         
Headquarters U.S. Air Force, Deputy Chief of      Arlington, VA            
Staff, Personnel                                  
Headquarters, U.S. Air Force, Office of Air Force Rosslyn, VA              
Reserve                                           
Air Force Recruiting Service                      Randolph Air Force Base, 
                                                     TX                       
Air Force Personnel Center                        Randolph Air Force Base, 
                                                     TX                       
Air Force's 341st Recruiting Squadron and 369th   Lackland Air Force Base, 
Recruiting Group                                  TX                       
Air National Guard, Office of Recruiting and      Arlington, VA            
Retention, National Guard Bureau                  
Army National Guard, Retention/Attrition Branch   Arlington, VA            
and Accessions Branch, National Guard Bureau      
Headquarters, Department of the Army, Office of   Arlington, VA            
the Deputy Chief of Staff for Personnel           
U.S. Army Accessions Command                      Fort Monroe, VA          
U.S. Army Recruiting Command                      Fort Knox, KY            
U.S. Army Reserve Command                         Fort McPherson, GA       
Office of the Chief Army Reserve                  Arlington, VA            
Marine Corps Recruiting Command                   Quantico, VA             
Marine Corps Manpower & Reserve Affairs           Quantico, VA             
Marine Forces Reserve                             New Orleans, LA          
Navy Recruiting Command                           Millington, TN           
Navy Personnel Command                            Millington, TN           
Navy Reserve Forces Command                       New Orleans, LA          
Office of the Under Secretary of Defense for      Arlington, VA            
Personnel and Readiness                           

Source: GAO.

To determine the extent to which the active duty, reserve, and National
Guard components met their aggregate recruiting and retention goals, we
compared accession and reenlistment goals to their actual figures for
fiscal years 2000 through 2005. Additionally, through interviews with
agency officials, we obtained data on the extent to which the components
have instituted stop loss in some units, recalled members of the
Individual Ready Reserve, and recruited new enlistees into their delayed
entry programs.

To determine the extent to which the components have met their authorized
personnel levels for specific occupational specialties, we obtained data
from the components on the number of servicemembers authorized and
assigned for each occupational specialty as of September 30 for fiscal
years 2000 through 2004 and June 30 for fiscal year 2005. We calculated
the fill rate for each occupational specialty by dividing the number of
servicemembers assigned to the occupational specialty by the
authorization. We then counted the number of years that each occupational
specialty in each component was over- or underfilled. Because most of the
components have not identified acceptable thresholds for over- and
underfilled occupational specialties, we used the strictest interpretation
of these terms. In our analysis, if a component had one person more than
its authorization, we considered the occupational specialty to be
overfilled. Similiarly, if a component had one person less than its
authorization, we considered the occupational specialty to be underfilled.
If an occupational specialty was overfilled for at least 5 of the 6 years,
we considered the occupational specialty "consistently" overfilled.
Similarly, if an occupational specialty was underfilled for at least 5 of
the 6 years, we considered the occupational specialty "consistently"
underfilled. Some occupational specialties have changed over the 6-year
period of our analyses. In these cases, we combined the original and new
occupational specialties. For example, in the Army, the occupational
specialty for Divers changed the identifier from 00B to 21D in 2004. We
combined these two occupational specialties by summing the entries for
each year and retaining it in our data set as one entry. In those cases
where we could not determine how to merge occupational specialties, we
retained the original data in our data set.

To analyze the steps DOD and the components have taken to address their
recruiting and retention difficulties, we interviewed key DOD officials
from each component, including headquarters and recruiting commands, to
obtain an understanding of recruiter, advertising, and incentive programs
as well as overall recruiting and retention difficulties. We determined,
through a review of DOD budget justifications for fiscal years 2000
through 2006, the associated costs of these programs. We also interviewed
Office of the Secretary of Defense officials to understand overall DOD
policies and future direction for reviewing recruiting and retention
goals. We obtained and reviewed various accession plans, incentive
programs, and marketing initiatives. To determine the extent to which
personnel in consistently overfilled occupational specialties received
bonuses, we obtained data from the active components on the occupational
specialties for which servicemembers were qualified to receive enlistment
or reenlistment bonuses in fiscal years 2000 through 2004 and for fiscal
year 2005 as of June 30. We compared the occupational specialties for
which servicemembers received bonuses to those occupational specialties
that we found to be consistently overfilled, as well as those that were
overfilled in any year. We limited our analysis to the active components
because the reserve components tend to provide enlistment and reenlistment
bonuses geographically. All dollar amounts were adjusted for inflation
using the gross domestic product price index published by the Bureau of
Economic Analysis.

To determine the reliability of data obtained for this report, we
interviewed personnel from each component knowledgeable about the data
sources we used, inquiring about their methods for ensuring that the data
were accurate. We reviewed available data for inconsistencies and, when
applicable, followed up with personnel to assess data validity and
reliability. We determined that the data were sufficiently reliable to
answer our objectives.

We conducted our work from January 2005 through October 2005 in accordance
with generally accepted government auditing standards.

Enlisted Aggregate Recruiting Goals and Achievements for Fiscal Years 2000
through 2005Appendix II

Tables 12 and 13 show the active, Reserve, and National Guard components'
recruiting achievements for fiscal years 2000 through 2005.

Table 12: Active Components' Enlisted Aggregate Recruiting Goals and
Achievements for Fiscal Years 2000 through 2005

                                        

Fiscal         Army                     Navy             Marine  Air   
year                                                     Corps  Force  
         Goal Actual Percentage   Goal Actual Percentage   Goal Actual Percentage   Goal Actual Percentage 
                        of goal                  of goal                  of goal                  of goal 
                            met                      met                      met                      met 
2000   80,000 80,113        100 55,000 55,147        100 32,417 32,440        100 34,600 35,217        102 
2001   75,800 75,855        100 53,520 53,690        100 31,404 31,429        100 34,600 35,381        102 
2002   79,500 79,585        100 46,150 46,155        100 32,593 32,767        101 37,283 37,967        102 
2003   73,800 74,132        100 41,065 41,076        100 32,501 32,530        100 37,000 37,141        100 
2004   77,000 77,586        101 39,620 39,871        101 30,608 30,618        100 34,080 34,361        101 
2005   80,000 73,373         92 37,635 37,703        100 32,917 32,961        100 18,900 19,222        102 

Source: DOD.

Table 13: Reserve and National Guard Components' Enlisted Aggregate
Recruiting Goals and Achievements for Fiscal Years 2000 through 2005

                                        

         Army     Army      Navy    
       National Reserve   Reserve   
        Guard                       
Fiscal     Goal   Actual Percentage   Goal Actual Percentage   Goal Actual Percentage 
Year                        of goal                  of goal                  of goal 
                                met                      met                      met 
2000     54,034   61,260        113 48,461 48,596        100 18,410 14,911         81 
2001     60,252   61,956        103 34,910 35,522        102 15,250 15,344        101 
2002     60,504   63,251        105 38,251 41,385        107 15,000 15,355        102 
2003     66,000   54,202         82 40,900 41,851        102 12,000 12,772        106 
2004     56,002   48,793         87 32,275 32,710        101 10,101 11,246        111 
2005     63,002   50,219         80 28,485 23,859         84 11,141  9,788         88 
        Marine    Air    Air Force  
        Corps   National  Reserve   
       Reserve   Guard              
Fiscal     Goal   Actual Percentage   Goal Actual Percentage   Goal Actual Percentage 
Year                        of goal                  of goal                  of goal 
                                met                      met                      met 
2000      9,341    9,465        101 10,080 10,730        106  9,624  7,740         80 
2001      8,945    9,117        102 11,808 10,258         87  8,051  8,826        110 
2002      9,835   10,090        103  9,570 10,122        106  6,080  6,926        114 
2003      8,173    8,222        101  5,712  8,471        148  7,512  7,557        101 
2004      8,087    8,248        102  8,842  8,276         94  7,997  8,904        111 
2005      8,180    8,350        102 10,272  8,859         86  8,801  9,942        113 

Source: DOD.

Active Duty Enlisted Aggregate Retention Goals and Achievements for Fiscal
Years 2000 through 2005Appendix III

The tables presented in appendix IV show each component's consistently
over- and underfilled occupational specialties for fiscal year 2000
through June 2005.

Active, Reserve, and National Guard Components' Consistently Over- and
Underfilled Occupational SpecialtiesAppendix IV

Table 14: Army's Consistently Overfilled Occupational Specialties

Table 15: Army's Consistently Underfilled Occupational Specialties

Table 16: Navy's Consistently Overfilled Occupational Specialties

Table 17: Navy's Consistently Underfilled Occupational Specialties

Table 18: Marine Corps's Consistently Overfilled Occupational Specialties

Table 19: Marine Corps's Consistently Underfilled Occupational Specialties

Table 20: Air Force's Consistently Overfilled Occupational Specialties

Table 21: Air Force's Consistently Underfilled Occupational Specialties

Table 22: Army National Guard's Consistently Overfilled Occupational
Specialties

Table 23: Army National Guard's Consistently Underfilled Occupational
Specialties

Table 24: Army Reserve's Consistently Overfilled Occupational Specialties

Table 25: Army Reserve's Consistently Underfilled Occupational Specialties

Table 26: Navy Reserve's Consistently Overfilled Occupational Specialties

Table 27: Navy Reserve's Consistently Underfilled Occupational Specialties

Table 28: Marine Corps Reserve's Consistently Overfilled Occupational
Specialties

Table 29: Marine Corps Reserve's Consistently Underfilled Occupational
Specialties

Table 30: Air National Guard's Consistently Overfilled Occupational
Specialties

Table 31: Air National Guard's Consistently Underfilled Occupational
Specialties

Table 32: Air Force Reserve's Consistently Overfilled Occupational
Specialties

Table 33: Air Force Reserve's Consistently Underfilled Occupational
Specialties

Comments from the Department of DefenseAppendix V

GAO Contact and Staff AcknowledgmentsAppendix VI

Derek Stewart, (202) 512-5559 ([email protected])

In addition to the individual named above, David E. Moser, Assistant
Director; Michael A. Brown II; Jonathan Clark; Alissa H. Czyz; James A.
Driggins; Joseph J. Faley; Neil D. Feldman; Ronald L. Fleshman; Shvetal
Khanna; Marie A. Mak; Maewanda L. Michael-Jackson; Christopher R. Miller;
Hilary L. Murrish; Brian D. Pegram; James W. Pearce; and Terry L.
Richardson made key contributions to this report.

(350633)

www.gao.gov/cgi-bin/getrpt? GAO-06-134 .

To view the full product, including the scope

and methodology, click on the link above.

For more information, contact Derek Stewart at (202) 512-5559 or
[email protected].

Highlights of GAO-06-134 , a report to congressional committees

November 2005

MILITARY PERSONNEL

DOD Needs Action Plan to Address Enlisted Personnel Recruitment and
Retention Challenges

The Department of Defense (DOD) must recruit and retain hundreds of
thousands of servicemembers each year to carry out its missions, including
providing support in connection with events such as Hurricanes Katrina and
Rita. In addition to meeting legislatively mandated aggregate personnel
levels, each military component must also meet its authorized personnel
requirements for each occupational specialty. DOD reports that over half
of today's youth cannot meet the military's entry standards for education,
aptitude, health, moral character, or other requirements, making
recruiting a significant challenge.

GAO, under the Comptroller General's authority (1) assessed the extent to
which DOD's active, reserve, and National Guard components met their
enlisted aggregate recruiting and retention goals; (2) assessed the extent
to which the components met their authorized personnel levels for enlisted
occupational specialties; and (3) analyzed the steps DOD has taken to
address recruiting and retention challenges.

What GAO Recommends

GAO is making recommendations that require (1) components to report more
information on occupational specialties, and (2) DOD to develop a
management

plan to address recruitment and retention challenges. DOD partially
concurred with GAO's recommendations.

DOD's active, reserve, and National Guard components met most aggregate
recruiting and retention goals for enlisted personnel from fiscal years
(FY) 2000-2004. However, for FY 2005, 5 of 10 components-the Army, Army
Reserve, Army National Guard, Air National Guard, and Navy Reserve-missed
their recruiting goals by 8 to 20 percent. Most of the components met
their aggregate retention goals for FY 2000-2004, but the Navy experienced
shortages in FY 2005 of up to 8 percent. Also, factors such as the
shrinking numbers of new recruits in delayed entry programs and the use of
stop loss, which delays servicemembers from leaving active duty, indicate
that the components may experience future recruiting challenges.

All components exceeded authorized personnel levels for some occupational
specialties and did not meet others. Specifically, GAO found that 19
percent of DOD's 1,484 occupational specialties were consistently
overfilled and 41 percent were consistently underfilled from FY 2000-2005.
While the components offered reasons why occupational specialties may be
over- or underfilled, GAO believes that consistently over- and underfilled
occupational specialties are a systemic problem for DOD that raises two
critical questions. First, what is the cost to the taxpayer to retain
thousands more personnel than necessary in consistently overfilled
occupational specialties? Second, how can DOD components continue to
effectively execute their mission with consistently underfilled
occupational specialties? In FY 2005, almost 31,000 more servicemembers
than authorized served in occupational specialties that have been
consistently overfilled. GAO determined that it costs the federal
government about $103,000 annually, on average, to compensate each
enlisted active duty servicemember in FY 2004. In contrast, DOD was unable
to fill over 112,000 positions in consistently underfilled occupational
specialties, raising concerns about the validity of the authorized
personnel levels. DOD requires the active components to report on critical
occupational specialties for recruiting and retention, which amounts to at
most 16 percent of their 625 specialties. However, DOD does not require
them to report on their noncritical occupational specialties, and does not
require the reserve or National Guard components to report on any of their
859 specialties. Consequently, DOD does not have the necessary information
to develop an effective plan to address the root causes of the components'
recruiting and retention challenges.

DOD has taken steps to enhance recruiting and retention, but lacks
information on financial incentives provided for certain occupational
specialties. GAO found that the components offered financial incentives to
servicemembers in consistently overfilled occupational specialties.
However, because DOD only requires the components to provide minimal
justification for their use of financial incentives, it lacks the
information needed to provide assurance to the Secretary of Defense,
Congress, and the taxpayer that the increasing amount of funding spent on
recruiting and retention is appropriately and effectively targeted to
occupational specialties for which the components have the greatest need.
*** End of document. ***