To ensure a ready workforce without undercutting modernization and sustainment efforts, the U.S. Air Force must explore options to limit military personnel costs while considering the nonmonetary trade-offs and risks that these options entail. RAND Project AIR FORCE conducted a workforce futures policy game that simulates the monetary and nonmonetary effects of workforce and personnel policies in real time.

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Managing Military Personnel Costs

Operation Retrenchment Specter, A Workforce Futures Game

by Matthew Walsh, Lisa M. Harrington, Thomas Light

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Research Questions

  1. Where and how can the Air Force limit spending on MILPERS?
  2. What are the risks and trade-offs implementing changes?
  3. How can the risks be mitigated?

To ensure a ready workforce without undercutting modernization and sustainment efforts, the U.S. Air Force must explore options to limit military personnel (MILPERS) costs while considering the nonmonetary trade-offs and risks that these options entail. RAND Project AIR FORCE designed and conducted a workforce futures policy game — Operation Retrenchment Specter — that simulates the monetary and nonmonetary effects of workforce and personnel policies in real time. In the game, players proposed options that were projected to yield annual savings ranging from $400 million to more than $2 billion. Although the options are still in the formative phase, they provide a basis for developing future actions to limit MILPERS costs.

Key Findings

Compromises must be made; there is a tight link between cost (i.e., MILPERS spending), size (i.e., the number of full-time equivalent personnel), and experience (i.e., years of service).

  • To trade off size, the Air Force could consolidate or eliminate organizations, installations, or functional communities.
  • To trade off experience, the Air Force could more fully utilize the talent and abilities of junior service members and enlisted personnel.
  • To reduce MILPERS costs without directly trading off size or experience, the Air Force, with congressional approval, could limit growth in basic pay. However, this could drive recruiting or retention trends that indirectly trade off size and experience.

Proposed changes entail implementation risk.

  • Options requiring congressional approval have high implementation risk.

Hedging and shaping actions can reduce risk.

  • For options that reduce size, the Air Force can adopt technologies to increase workforce efficiencies.
  • For options that shift to a more junior grade mix, the Air Force can delay promotions to give individuals more time to develop.
  • For options that reduce retention in the active-duty force, the Air Force could leverage programs to encourage service members to enter the reserves to retain their experience.
  • For options that reduce basic pay, the Air Force could use special and incentive pay in a more targeted manner.

The savings are significant.

  • Because the MILPERS budget is so large, a 2 percent savings could be repurposed to support thousands of additional personnel or tens of thousands of flying hours.

Recommendations

  • Most workforce and personnel planning problems that the Air Force faces are wicked problems. The Air Force should include policy games in the set of evidence-based methods routinely used to examine such problems.
  • Given time constraints, teams effectively proposed solution classes rather than formal options. The benefit of the game was determining which solution classes are promising enough to warrant further attention. The Air Force should return to data-driven and other evidence-based approaches to optimize solutions within these classes.
  • The Air Force should continue to use policy games to explore ways to control MILPERS costs. In particular, the Air Force could develop scenarios involving different economic conditions and contingencies to determine how various solutions fare. In addition, the Air Force could include players from different communities and organizations in future games to enable generation of new ideas and to establish more-widespread buy-in.
  • Given that domestic and international contexts are not static, the Air Force should periodically revisit workforce design and exercise options to rebalance the force.
  • Because changes have sweeping implications, the Air Force could establish a group that reports to the Air Force's chief of staff that is dedicated to developing, vetting, and prioritizing actions to limit MILPERS costs.

Table of Contents

  • Chapter One

    Introduction

  • Chapter Two

    The Rising Cost of Military Personnel

  • Chapter Three

    Game Purpose and Structure

  • Chapter Four

    Proposed Solution Options

  • Chapter Five

    In-Game Evaluation of Solution Options

  • Chapter Six

    Discussion and Recommendations

Research conducted by

The research reported here was commissioned by the Director of Manpower, Organization and Resources, Headquarters U.S. Air Force (AF/A1M) and conducted by the Workforce, Development, and Health Program within RAND Project AIR FORCE.

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