Since the September 11, 2001, terrorist attacks on the United States, DOD has launched three major military operations requiring significant military personnel: 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 the services’ operations and personnel tempo of the military services, and especially those of the Army and Marine Corps, which have provided the bulk of the military personnel burden associated with operations in Iraq. Additionally, a significant number of military personnel have been killed or wounded in Iraq. Many congressional and military observers have expressed concern that the current operations tempo, combined with the level of casualties in Iraq, might lead to lower recruiting and retention rates, thereby raising questions about DOD’s ability to sustain long-term force requirements. In addition, there are growing concerns that a number of stress factors, such as back-to-back and/or lengthy overseas deployments and heavier reliance on the reserve components in the Army and Marine Corps, may significantly hinder DOD’s overall ability to effectively recruit and retain forces. According to DOD officals, recruiting is the military services’ 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 personnel to develop into future mid-level and upper-level military leaders. To accomplish this task, active, reserve, and Guard components set goals for accessions, or new recruits, who will enter basic training each year. To assist in recruiting, the military services advertise on television, on radio, and in print and participate in promotional activities, such as sports car racing events. In response to some of the services missing their overall recruiting goals in the late 1990s, DOD increased its advertising, number of recruiters, and financial incentives. Our September 2003 report assessed DOD’s recruiting advertising programs, and concluded that DOD did not have clear program objectives and adequate outcome measures to evaluate the effectiveness of its advertising. We recommended, and DOD agreed, that measurable advertising objectives should be established and outcome measures should be developed to evaluate advertising programs’ performance. The term retention used by DOD refers to the military services’ ability to keep personnel with the necessary skills and experience. Servicemembers have the opportunity to either leave the military or reenlist when their contracts expire. A common retention concern is that too few people with the needed skills and experience will stay in the military, thereby creating a shortage of experienced personnel, decreased military efficiency, and lower job satisfaction. Although the services have each created their own unique means of tracking retention, they all measure retention in a career path at key points that are delineated by various combinations of years of service and number of enlistments. The Army and Marine Corps set numerical retention goals; the Air Force and Navy state their retention goals in terms of percentages of those able to reenlist. The military components generally met their overall recruiting and retention goals over the past 5 fiscal years. However, some are beginning to experience difficulties in meeting their overall recruiting and retention goals for fiscal year 2005. According to DOD data, the active and reserve components generally met their enlisted aggregate recruiting goals for fiscal years 2000 to 2004. However, it should be noted that the “stop loss” policy implemented by several components shortly after September 11, 2001, might have facilitated these components in meeting their overall recruiting goals for fiscal year 2002 and beyond. A “stop loss” policy requires some servicemembers to remain in the military beyond their contract separation or retirement date. Keeping servicemembers on active duty longer can reduce the number of new people the services need to recruit to maintain endstrength. For example, the Army, which has implemented some form of “stop loss” since December 4, 2001, has required several thousand servicemembers to remain on active duty beyond their contractual separation or retirement date. The recruiting data presented in table 1 show that in fiscal year 2004, the Army, Navy, and Air Force actually exceeded their goals with a 101 percent rate. More recently, however, the Marine Corps and Army failed to meet February 2005 overall recruiting goals. The Marine Corps missed its January goal of 3,270 new recruits by 84 people, or 2.6 percent, and narrowly missed its goal again in February. This is the first time that the Marine Corps has missed a monthly annual recruiting goal since 1995. The Army is also beginning to experience difficulties and, in February 2005, missed its goal of 7,050 new recruits by 27.5 percent, or 1,936 recruits. This is significant, given that the Army has also called members of the Individual Ready Reserve into active duty and moved thousands of recruits from its delayed entry program into basic training ahead of schedule. Air Force and Navy overall recruiting goals, on the other hand, do not appear to be in jeopardy at this time, as both services intend to reduce their endstrengths. Over the next year the Air Force plans to downsize by about 20,000 personnel, and the Navy is looking to trim more than 7,300 sailors. Table 2 shows that four of the six DOD reserve components generally met their enlisted aggregate recruiting goals for fiscal years 2000 through 2004 but that the Army National Guard achieved only 82 percent of its recruiting objectives in fiscal years 2003 and 87 percent 2004, and that the Air National Guard achieved 94 percent of its recruiting objective in fiscal year 2004. First quarter 2005 reserve and Guard recruiting data suggest that the reserve components may experience difficulties in meeting their early 2005 overall recruiting goals. The Marine Corps Reserve, which achieved 106 percent of its overall first quarter 2005 recruiting goals, is the only reserve component that has met or surpassed its goal so far this year. The Army Reserve and Army National Guard achieved 87 and 80 percent of their overall recruiting goals, respectively. The Air Force Reserve achieved 91 percent of its overall recruiting goal; the Air National Guard, 71 percent; and the Navy Reserve, 77 percent. DOD has noted that the Army Reserve components will be particularly challenged, since more active Army soldiers are staying in the active force, and of those leaving, fewer are joining the reserve components. According to DOD data, the four active components generally met their enlisted aggregate retention goals from fiscal year 2000 through fiscal year 2004. However, as I stated in the discussion on recruiting, it should also be noted here that the services’ “stop loss” policies implemented shortly after September 11, 2001, might have facilitated the services in meeting their aggregate retention goals since fiscal year 2002. In addition, the Army generally reduced its overall retention goals from fiscal year 2000 through fiscal year 2003. Table 3 shows that the Army is the only active component that met all of its retention goals for fiscal years 2000 through 2004. Table 3 also shows that, in fiscal year 2004, the Navy missed its retention goal for initial reenlistments by just less than 2 percentage points and the Air Force missed its goal for midcareer term reenlistments by 5 percentage points. In fact, the Air Force missed this goal in 4 of the past 5 fiscal years and missed its goal for career third term or subsequent reenlistments in 2000 and 2001. The Navy missed its goal for reenlistments among enlisted personnel who have served from 10 to 14 years in 2 of the past 5 fiscal years, and the Marine Corps missed its goal for second and subsequent reenlistments in fiscal year 2003 only. For the first quarter of fiscal year 2005, data show that the Army missed its initial reenlistment goal for active duty enlisted personel by 6 percent and its midcareer reenlistment goal by 4 percent. The Air Force also missed two of its reenlistment goals for active duty enlisted personnel in the first quarter of fiscal year 2005. The Air Force achieved a reenlistment rate of 50 percent for second-term reenlistments, compared with its goal of 75 percent, and a reenlistment rate of 92 percent for career reenlistments, compared with its goal of 95 percent. The Air Force also established a goal for 55 percent of all personnel eligible for a first-term reenlistment to reenlist and missed this goal by just 1 percent. We are continuing to collect, analyze, and assess the reliability of retention data for both the active and reserve components, which we will incorporate into our final report. Recruitment and retention rates, when shown in the aggregate, do not provide a complete representation of occupations that are either over- or under-filled. For example, our analysis of fiscal year 2005 Army data, on its 185 active component enlisted occupations, shows that 116 occupations, or 63 percent, are currently overfilled and that 60 occupations, or 32 percent, are underfilled. Also, the Marine Corps told us that, of its 255 active component enlisted occupations, 52 occupations, or 20 percent, are overfilled and that 37 occupations, or 15 percent, are underfilled. Data provided by the Navy show that 32 enlisted occupations are overfilled and 55 occupations are under filled. According to the Congressional Budget Office, about 30 percent of the occupations for enlisted personnel experienced shortages and about 40 percent experienced overages, on average, from fiscal year 1999 through fiscal year 2004. We requested the active, reserve, and Guard components provide us with their list of hard-to-fill occupations. On the basis of data for 7 of 10 components, we identified several hundred occupations that have been consistently designated as hard-to-fill because the components had not been able to successfully recruit and retain sufficient numbers of personnel in these areas to meet current or projected needs. Of these, we identified 73 occupations as being consistently hard to fill. Table 4 shows these 73 hard-to-fill occupations, by components. More specifically, we asked DOD to provide us with the current hard-to-fill occupations for active duty components, and we received data for the Army, Navy, and Air Force. The Marine Corps currently does not report hard-to-fill occupation information to DOD. Table 5 shows the extent to which these occupations were over- or under-filled as of November 2004. Further analysis of the data shows that 7 of the Army’s occupations (infantry, fire support specialist, cavalry scout, chemical operations specialist, motor transport operator, petroleum supply specialist, and food service specialist) and 6 of the Air Force’s occupations (airborne linguist; combat control; imagery analysis; linguist; SERE [survival, evasion, resistance, escape operations]; pararescue, and explosive ordnance disposal) are on both the services’ “hard to recruit” and “hard to retain” lists. DOD has made enhancements to existing programs and introduced new programs in recent years to improve its ability to recruit and retain servicemembers. These programs include increasing the eligibility for and size of enlistment and reenlistment bonuses and educational benefits, and the number of recruiters. DOD, for example, expanded the pool of servicemembers who are eligible to receive a selective reenlistment bonus. Selective reenlistment bonuses are designed to provide an incentive for an adequate number of qualified midcareer enlisted members to reenlist in designated critical occupations where retention levels are insufficient to sustain current or projected levels necessary for a service to accomplish its mission. The statutory authority for this bonus was amended in the Fiscal Year 2004 Defense Authorization Act to allow the Secretary of Defense to waive the “critical skill” 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. In addition, in February 2005, DOD announced a new retention bonus for Special Operations Forces personnel (Army Special Forces; Navy SEALs; and Air Force pararescue, plus a few other specialties) who decide to remain in the military beyond 19 years of service. The largest bonus, $150,000, will go to senior sergeants, petty officers, and warrant officers who sign up for an additional 6 years of service. Personnel who sign up for shorter extensions will receive a smaller bonus; personnel who extend for 1 additional year, for example, will receive $8,000. Individual components have also implemented changes. The Army, for instance, increased the amount of cash bonuses it offers to new recruits in hard-to-fill military occupations up to $20,000. In December 2004, the National Guard announced that it is increasing its initial enlistment bonuses from $8,000 to $10,000 for individuals without prior service who sign up for one of the National Guard’s top-priority military occupations such as infantry, military police, and transportation. DOD officials also said the Army and the National Guard are increasing the amount of their college scholarship funds for new enlistees. The Army increased the maximum college scholarship from $50,000 to $70,000, while the Army National Guard doubled the amount it will provide to repay a recruit’s student loan to $20,000. Finally, the Army and Marine Corps components are increasing their recruiting forces to meet their additional recruiting challenges. The Army plans to add 965 recruiters to its recruiter force in fiscal year 2005, for a total force of 6,030 recruiters, and the Marine Corps plans to add 425 recruiters to its recruiter force by fiscal year 2007, bringing its total recruiter force to 3,025 recruiters. Mr. Chairman, this completes my prepared statement. I would be happy to respond to any questions that you or other members of the Subcommittee may have at this time. For questions about this statement, please contact Derek B. Stewart at (202) 512-5559 (e-mail address: Stewartd@gao.gov) or David E. Moser at (202) 512-7611 (e-mail address: Moserd@gao.gov). Individuals making key contributions to this testimony included Alissa H. Czyz, Joseph J. Faley, Brian D. Pegram, and John S. Townes. This is a work of the U.S. government and is not subject to copyright protection in the United States. It may be reproduced and distributed in its entirety without further permission from GAO. 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Summary: To meet its human capital needs, the Department of Defense (DOD) must convince several hundred thousand people to join the military each year while, at the same time, retain thousands of personnel to sustain its active duty, reserve, and National Guard forces. Since September 11, 2001, DOD has launched three major military operations requiring significant military personnel--Operation Noble Eagle, Operation Enduring Freedom, and Operation Iraqi Freedom. The high pace of military operations combined with the level of casualties in Iraq and other factors, such as lengthy overseas deployments, have raised concerns about DOD's ability to recruit and retain sufficient numbers of personnel who possess the skills and experience needed. This testimony presents GAO's preliminary findings on (1) the extent to which the active duty, reserve, and Guard components have met their overall recruiting and retention goals, (2) the degree to which the components have met their recruiting and retention goals for selected hard-to-fill critical occupations, and (3) steps the components have taken to enhance their recruiting and retention efforts. This testimony focuses on enlisted personnel. In continuing its work, GAO will assess the reliability of DOD-provided data and plans to issue a report on these issues this fall. DOD's 10 military components generally met their overall recruitment and retention goals for each of the past 5 fiscal years (FY), but some of the components experienced difficulties in meeting their overall goals in early FY 2005. However, it should be noted that several components introduced a "stop loss" policy shortly after September 11, 2001. The "stop loss" policy requires some servicemembers to remain in the military beyond their contract separation date, which may reduce the number of personnel the components must recruit. During FY 2000-2004, each of the active components met or exceeded their overall recruiting goals. However, for January 2005, the Marine Corps missed its overall active duty recruiting goal by 84 recruits and narrowly missed its goal again for February 2005. The Army also missed its overall recruiting goal for February 2005 by almost 2,000 recruits. This is significant, given that the Army has also already called up members from the Individual Ready Reserve and moved new recruits from its delayed entry program into basic training earlier than scheduled. Four of the six reserve components mostly met their overall recruiting goals for FYs 2000 through 2004, but many experienced difficulties in early FY 2005. DOD has noted that the Army Reserve components will be particularly challenged, since fewer active Army soldiers leaving active duty are joining the reserves. In terms of retention, the active components generally met their overall retention goals for the past 5 FYs. The Army, for example, met or exceeded overall retention goals from FY 2000 through FY 2004. The Army and the Air Force, however, missed retention goals in the first quarter of FY 2005. Overall recruitment and retention data do not provide a complete representation of military occupations that are either over- or under-staffed. For example, GAO's analysis of early FY 2005 data shows that 63 percent of the Army's active component specialties are overfilled and 32 percent are underfilled. Also, several hundred hard-to-fill occupations exist within the 10 DOD components. GAO identified 73 occupations that have been consistently designated as hard-to-fill occupations. GAO's analysis also shows that 7 of the Army's current occupations (e.g., infantry and cavalry scout) and 6 of the Air Force's current occupations (e.g., combat control and linguist) are on both their "hard-to-recruit" and "hard-to-retain" lists. DOD's components have been taking a number of steps to enhance their recruiting and retention efforts. For example, DOD has expanded eligibility for selective reenlistment bonuses and has also begun offering reenlistment bonuses of as much as $150,000 to special operation forces personnel with 19 or more years of experience who reenlist for an additional 6 years. The Army increased the amount of cash bonuses it offers to new recruits in hard-to-fill military occupations to as much as $20,000. The Army also increased its maximum college scholarship from $50,000 to $70,000. In addition, the Army plans to add 965 recruiters in FY 2005, and the Marine Corps plans to add 425 recruiters by FY 2007.