With the stroke of a pen, the 2016 National Defense Authorization Act transformed the active duty retirement program the Defense Department has used since 1986.
The "High 36" or the "Career Status Bonus/REDUX" models, have been re-engineered to emulate aspects of private-sector programs. Under the old model, a Marine needed to remain in service for at least 20 years to qualify for a retirement pension, and in return for that commitment, the service member received a defined benefit pension immediately upon retirement.
The new program called the "Blended Retirement System," provides a 1 percent DOD contribution to the service member's Thrift Savings Plan account after 60 days of service, and up to an additional 4 percent after 36 months of service for those who choose to contribute 5 percent of their salary to the same TSP.
This program also touts a mid-career retention incentive at the 12-year mark, which is estimated to be worth at a minimum, 2.5 times a month's base pay in return for an additional 4-year commitment. The traditional defined benefit program remains for 20-plus years of service, albeit at a slightly lower rate (2 percent for each year of service versus the former 2.5 percent).
This is fantastic news for the estimated 81 percent of service men and women who leave with zero retirement benefits. However, it is potentially disastrous for the Marine Corps' ability to retain its best trained and most high investment demographics: its senior captains, majors and staff non-commissioned officers. Failure to retain these mid-grade leaders has the potential to leave gaping holes in a wide array of meticulously managed manpower models. The reason for this dour outlook is directly linked to the Marine Corps losing its "all or nothing" incentive to get Marines to fill hard jobs in less than desirable locations. Like it or not, the 20-year retirement program effectively served as a coercive tool to get mid-career Marines to fill "less than desirable" assignments because they were sufficiently vested and the opportunity cost to vote with their feet (i.e. get out) was too great.
Fortunately, improvising, adapting and overcoming are all in the Marine Corps' DNA. There are four measures that can be implemented to mitigate the dangers of this newfound career flexibility for mid-career Marines.
First, the Marine Corps must buy more Marines, purposely building excess capacity in difficult to retain positions (intel, cyber, comm, etc.) to ensure an adequate number of Marines are on hand to fill essential positions. This approach will both add resiliency to manage the higher rate of separation, as well as provide flexibility to create unique job opportunities that aren't beholden to antiquated tables of organization, some of which have not been updated in decades.
Second, the Marine Corps should embrace homesteading to provide better family stability. Third, "sweetening the pot" by issuing orders to hardship locations at the same time as the subsequent (and highly desirable) assignment. Any Marine can take hard tours, but plainly seeing the return on investment for taking hard jobs will enhance retention and allows for deliberate long-term family planning.
Finally, civilians get job offers, not orders, for a reason. How can the Marine Corps reward its most talented Marines with the best opportunities? We need to empower Marines and give them a more significant role in determining their future.
Mitigating Measure 1: Create more mid-grade leaders
In my 26 years in the Marine Corps I have yet to see a tactical unit staffed to 100 percent, and often much less depending on a surprise number of separations or retirements that were not accounted for when manpower ran the authorized strength report gonkulator.
This approach overwhelmingly values efficiency over effectiveness, often leaving lean populations of mid-grade leaders to cover a wide array of critical billets, many of which in less than desirable locations. Up until now, barring that leader having 20+ years of active service on the books, this lean approach worked.
What will the Marine Corps do when this type of problem is amplified and moved left 10 years? Step one is to plan and budget for a larger population in the center of most manpower pyramids to account for a workforce that will have increased flexibility to depart service short of 20 years.
This has the potential for inefficiencies, but these "excess" populations also present opportunities. In "The Alliance: Managing Talent in the Networked Age," the authors promote a concept of a partnership between the corporation and the individual employee so that they work in tandem to balance corporate needs with individual aspirations. The Marine Corps historically struggles with this and prefers mostly rigid career tracks, a model that is ill advised with a well-educated, highly talented, and well-informed workforce. It has never been easier to find alternate employment with literally thousands of job postings online.
The hallmark of the Marine Corps manpower process is its efficiency. Unfortunately, efficiency does not lend itself to resiliency. I’ll use my college budget as an example: I could pay essential bills like tuition, car insurance, rent, food, and had enough to take my girlfriend out once or twice a week, but had no cash reserve (i.e. resiliency) for when I had to unexpectedly replace four tires on my car. The Marine Corps is constantly forced to make difficult decisions and stick round pegs in square holes due to limited flexibility, and lack of depth to make value judgments aligning the needs of the organization with the druthers of the individual Marine.
Going forward, the USMC must redesign the manpower pyramid to have a thicker middle to provide both flexibility and bench depth to ensure critical jobs get filled with the right people despite an increasingly transient work force. It also enables the institution to provide unique opportunities for high performing Marines who have earned them.
Speak Korean, Mandarin, and Vietnamese due to Dad being a diplomat and you are well-suited for independent duty? The service probably needs to find a place for you working in a Defense Attaché office whether there is a pre-existing Marine billet there or not. Dynamically creating jobs for a percentage of the force in areas that align with emerging crises, nontraditional assignments outside DOD, or even the public sector flies in the face of the current lockstep death march to filling unyielding tables of organization managed by Total Force Structure.
The system must provide flexibility and opportunity for the most talented Marines or they will walk.
Mitigating Measure 2: Embrace Homesteading
The Marine Corps’ rotation system is built on a 36-month permanent change of station cycle, with incrementally shorter tours, as Marines get more senior.
For me personally (my spouse is a working professional and a Marine reservist), this translates to a 1-to-1 "stress to dwell" ratio on the family’s stress meter. The churn begins the year leading up to the orders as kids prepare to change schools and leave friends, and my spouse and I balance my options with hers. It then takes about six months after that move to fully transition to the new community, and if we’re lucky, the cycle doesn’t start again for 18 months!
This model needs to change with the times. According to the Pew Research Center, 60 percent of families with kids under 18 are dual income households. This is a dramatic increase from 25 percent in the early 1960s. The decision to "accept" orders has always been a friction point, but once a Marine reached 10 to 12 years of service, odds on bet he or she would feel compelled to stick around to 20 years regardless of the turmoil along the way. Being vested at three years changes this career calculus. With both the service member and the spouse requiring (or desiring) employment, providing geographic stability will reduce "stay or go" decision points.
Not only is the 36-month PCS model stressful, it is expensive. According to the U.S. Government Accountability Office, the DOD executes approximately 50,000 PCSs a year, which in 2014 cost roughly $6,700 each. How could the Marine Corps reduce stress on its families and save money? The answer is homesteading! Aim points can vary, but 4 to 6 years on station is probably a reasonable start point and would be a huge step in removing transition decision points, while also saving an immense amount of money that could be reapplied to a host of other resource shortfalls.
This adjustment obviously cannot be made in a vacuum and still be aligned with the Marine Corps’ model of every Marine serving in the operating forces and supporting establishment during each grade. This is still supportable, but would likely require distributing Quantico-centric functions to co-locate with major Marine Corps hubs (North Carolina and California). Considering the Commandant’s new Marine Corps Operating Concept calls for dynamic distributed operations to execute major combat operations, it seems reasonable the Marine Corps can exploit similar 21st century technology and warfighting concepts to "virtually" conduct a host of supporting establishment functions. The Air Force and Army already employ a 48-month PCS model.
Retention theorem: Kids in the same school + spouses in the same job = content/retained Marine.
Mitigating Measure 3: Sweeten the pot in return for taking hard assignments
Marines can endure nearly any hardship, but it sure is nice to get rewarded for doing so. Let’s be honest, Twentynine Palms and Okinawa are hard on families. It is difficult to find work in 29 Palms for anything other than service industry jobs, and taking the kids and pets to Okinawa is arduous. The Marine Corps’ "we didn’t promise a rose garden" approach needs to soften and refocus on the long term to create a light at the end of some potentially bleak tunnels. By planning two steps ahead for hard-to-fill positions (the 29 Palms orders and the follow-on), the Marine is enabled to build a family strategy that allows children to attend a single high school, spouses to keep a job more than three years, and opportunities to pull the trigger on big life decisions such as purchasing a house.
Seems reasonable, right? The system might not be able to promise a specific job and geography, but the manpower systems should be sufficiently malleable (see Mitigating Measure 1) to allow the hardship tour recipient to pick one or the other before accepting the hardship orders. I know many Marines would not think twice about taking hard-to-fill jobs with an assurance on the backside of what they would be doing or where they would be headed. "Trusting the system" and the next monitor is not a family planning strategy when you’re married with kids and a mortgage in Temecula, Calif. As Gene Kranz famously said during the movie "Apollo 13," "Hope is not a plan…"
A way to reduce the stress of impending orders is to issue them early and allow families time to plan. The best transition plan I ever built was when I screened for battalion command and knew exactly what job and where I would be going 10 months in advance. On the backside of that experience, when leaving the Army War College I had orders change a number of times that were finally resolved in April for a June PCS. I’m sure there are plenty of fiscal-year reasons why issuing orders earlier is hard, but the benefits of issuing them early in tandem with the next set may be critical in the years to come. Every major stress point created is effectively one more potential decision point to leave the service.
Mitigating Measure 4: Change orders to offers
Have you ever asked why the Marine Corps’ manpower system allows hundreds of senior leaders to have strangers assigned to their teams without getting a say in the matter? You can bet that Jeff Bezos, Elon Musk, and nearly every other senior corporate leader takes human capital as their most essential resource for mission accomplishment. So should the Marine Corps, yet it persists in centralizing this decision to an organization not accountable for the bevy of dynamic and complex missions being performed throughout the institution. I’m not proposing that each colonel gets to hand-pick his or her entire team, but if he or she is responsible for a mission, and one recognizes that a high trust cohesive team is a prerequisite for high performance organizations, the current model probably warrants some change.
Fortunately, industry has a great model, where it calls them offers. High performing employees get better offers than average ones. Establishing a system where senior leaders are able to "offer" positions to individuals who have the skills and disposition most valuable to the leader would empower those responsible for the organization’s performance. The staff members also benefit from this approach in that if you are a stellar performer, you are likely to get quite a few offers. On the flip side, if you’re a mediocre performer, or are difficult to work with, you are likely to get fewer offers (cue "we didn’t promise you a rose garden" commercial).
This model also has potential to identify bad bosses, traditionally defined as toxic leaders. In the absence of 360 evaluations, only the unit commander knows if he has a crappy command climate. This manpower approach provides a mechanism to highlight bosses that no one wants to work with. This is significant considering that a recent Gallup poll highlighted that the number one reason people quit their jobs is due to a bad boss. Excising these leaders is likely to be exponentially more important in a retirement system that allows Marines to depart service with a portion of retirement benefits at any time short of 20 years.
People are undoubtedly the Marine Corps’ most valued resource, and in order to preserve this asset moving forward changes are in order. Building sufficient structure will provide both resiliency to unforeseen shifts in population, and provide flexibility to align high performing Marines with emerging opportunities. Embracing homesteading is likely to reduce transition decision points for dual working families. Forecasting two assignments out for difficult-to-fill positions will allow families to deliberately plan for increasingly complex career/family balancing acts. Finally, allowing key leaders to influence the composition of their teams will make the organization more competitive with the civilian job market, the Marine Corps’ chief competitor for retaining talent.
Failure to adapt to this revised retirement program and the career track flexibility it brings with it, has potential to send the Marine Corps’ most talented middle management to other organizations that are able and willing (more than likely ecstatic) to fill their ranks with high performing, mentally, and morally fit Marines. Let’s not let that happen!
Matthew Reiley is an active duty Marine Corps lieutenant colonel who is currently serving as a senior intelligence officer for I Marine Expeditionary Force.
