It is well documented that the tactical air community has difficulty retaining qualified aviators to serve as department heads. Most proposed fixes cluster around an increase in the size of and more flexible terms for the aviation department head retention bonus (ADHRB). While both concepts have merit, the ADHRB could have a more meaningful impact if it were offered earlier—to the most competitive junior officers (JOs). The most important negotiation between JOs and the Navy happens well before screening for lieutenant commander (O-4) and the completion of their minimum service obligation—for most, near the end of their first operational tour as they prepare for a subsequent shore tour. To be most effective, this is where negotiations for long-term retention must take place.
By waiting until O-4 selection, the Navy largely rewards officers who already have decided to stay in rather than offering incentives to top-performing JOs. The Navy’s best chance to incentivize performance, retain talent, and forecast manning levels would occur if the ADHRB were offered at least four years prior to an aviator’s expected department head tour and if the underlying payment structure were extended. Moreover, this would enable Navy Personnel Command (NPC) to forecast manning better.
NPC has an existing model, the command bonus, which is something of a misnomer because it is aimed primarily toward filling post-command billets. Command screening generally occurs between 15 and 17 years into an officer’s career. The guarantee of retirement at 20 years creates an incentive for many—but not enough—O-5s to serve the additional 3–5 years to realize a nearly $2 million–benefit package. The command bonus rewards those who screen for command then commit to a post-command tour. This helps secure manning selectively 3–5 years before NPC needs to fill critical billets. In other words, the Navy is willing to pay an incentive to secure an obligation well into the future. This is a smart policy that should be replicated to retain department heads.
An Earlier Bonus Is Better
A smart and effective transition to civilian life requires a few years of advanced planning—the reason so many aviators decide to leave the Navy by the end of their first operational tour or early during their first shore tour. In fact, the shore tour often serves as the place where aviators prepare the “civilian battlespace” by applying to graduate school and obtaining commercial pilot qualifications, both of which require significant emotional and financial investments. Once an aviator starts down this path, it is difficult to persuade him or her to stop. Therefore, we suggest making bonus eligibility coincident with the end of a JO’s first squadron tour.
To ensure the incentive is offered to retain the best aviators, the Navy must establish earlier milestones to determine bonus eligibility. These milestones should be aligned with the CNO’s call to emphasize warfighting. A warfighting-first mentality resonates with the spirit and intrinsic motivations of the Navy combat team. To this end, eligibility should coincide with acceptance to a weapon or test pilot school and also should be offered to a certain percentage of aviators selected for production tours (training or fleet replacement squadrons). This will make applications to these programs more competitive and reward performance simultaneously, thus aligning with the expectations of the growing corps of millennial aviators and reinforcing the organizational message that those who place warfighting first are truly valued.
The blended retirement system (BRS) likely will accelerate the exodus of highly qualified aviators, who will be less vested in the promise of a military pension and will be more tempted by the promise of more pay, more time at home, and attractive civilian 401(k) options.
The Navy also should consider lengthening the bonus term, perhaps over nine years with payments up to $35,000 per year (the maximum congressionally authorized bonus), similar to the new Air Force bonus (up to 13 years at $35,000 per year, for a total of $455,000). This provides aviators a longer opportunity to increase their earnings, better closes the gap between civilian and military pay, and could put investment money to work earlier in their career (aligning with BRS goals).
This fiscal year’s ADHRB structure offered an incentive for those who opt in by a specified date—and reduced the incentive for those who waited too long. Combining this policy with earlier offers and more frequent payment of incentives could tip the negotiation scale in favor of the Navy. Consider that over an eight-year obligation, there is a shift between how much the aviator needs the Navy and the Navy needs the aviator. Earlier in their careers, aviators need flight time, qualifications and benefits that have not been fully realized, whereas, once an aviator attains these qualifications it is the Navy that needs these skills and qualifications more. That is, aviators may have a lower reservation price for their services earlier in their careers.
Competition for bonuses may become a component of the program, similar to preferential stock options in the corporate world that are offered in multiple rounds with flexible terms, avoiding a one-size-fits-all approach. The Air Force already does this, and corporations routinely use such bonuses to attract, retain and manage their talent pools. The real benefit of multiple bonus rounds is that as circumstances change, the Navy will have multiple chances to negotiate for an aviator’s commitment. This sentiment is in accord with Commander Michael Lisa’s flexible contract proposal in the October Proceedings and aligns with sound labor market principles.
Principled Creativity Can Solve the Challenge
The Navy has weathered many personnel storms and has adapted time and again to meet every challenge. The bonus release has been an exciting opportunity for aviators to reflect on their own intrinsic motivations and the principles with which they identify. These are fundamental to professional and personal development and growth. It seems that nearly every time the topic of the bonus and retention arise, conversation rapidly transitions to a discussion about organizational values. The one concept that seems to resonate and rally aviators is the hope that the service will take every measure possible to place warfighting first. Reworking the bonus program to reward and retain the very best will send a clear message that the Navy intends to make the Navy the best warfighting organization it can be.