The Road to Retention Is Paved with Good Intentions

Retention in any organization is a direct reflection of leadership. If the Navy is to recover from its retention problems in Naval Aviation, leaders must acknowledge where we have drifted and fix the processes that got us here.

On 14 February 2018, Vice Admiral Robert Burke, Chief of Naval Personnel (CNP), testified before the Senate Armed Services Committee on the state of personnel in the Navy.[1] In his written testimony, he stated that the “Strike Fighter (VFA), Electronic Attack (VAQ), and Helicopter Mine Countermeasure (HM) communities—each did not retain sufficient numbers of O-4 [lieutenant commander] pilots to meet all operational department head requirements in our aviation squadrons.”

Five lines later he stated, “Increases in statutory caps for both pays [Aviation Career Continuation Pay (ACCP) or aviation department head retention bonus and Aviation Career Continuation Pay (ACIP) or monthly flight pay], enacted in the FY2017 National Defense Authorization Act (NDAA), were well received and appreciated by naval aviators” (emphasis added).

I disagree with his assessment, and I am concerned that senior Navy leaders are not listening to or representing the truth coming from the deck plates. Given the admitted failure of the FY17 ACCP to meet retention last year, I find it questionable to be so optimistic when the changes to the program were limited. As of December 2017, there was draft preliminary data showing a further decline in FY18 ACCP take rates among aviators to the lowest levels in 10 years. Furthermore, until the FY18 ACCP acceptance window closes, it is impossible to obtain an objective metric to determine true fleet-wide reception and—more important—program success. The nominal increase in the ACIP is a step in the right direction, but it still grossly lags inflation and lacks competitiveness with the private sector for the target skill set.   

Released months after the Air Force offered its plan, the Navy’s FY18 ACCP program did not offer the maximum amounts provided under the FY17 NDAA. Instead, senior leaders made the puzzling choice to cap bonuses for pilots at least $5,000 per year less than the Air Force was offering its equivalent-tier pilots. The FY18 ACCP bonus structure also included an additional $2,000 per year for weapons tactics instructors and test pilots. These specialists train and equip the fleet, yet the Navy monetized their value at just $2,000 per year—when $5,000 per year was available. These decisions spoke volumes to the fleet about how Navy leaders perceive retention challenges.

The FY17 NDAA aviator compensation limits were set too low to affect retention, as the 2016 RAND study predicted and the Air Force is now seeing.[2] Navy leaders did the fleet no favors by allowing the Air Force to negotiate the new limits with Congress with almost total autonomy. When the FY17 NDAA was being negotiated, Navy leaders had not yet even acknowledged retention to be a problem.  It was not until March 2017 before the House Armed Services Committee that they admitted they were beginning to see a pilot retention problem. Still, they did not meet the challenges head-on when creating Navy’s FY18 ACCP, choosing not to use the maximum amounts allowed under the FY17 NDAA.[3]

Admiral Burke testified in March 2017 that “overall, retention was good.” He noted the Navy was starting to see some challenges, including in VFA, VAQ, and HM aviation, but said Navy leaders found these shortages to be manageable with the tools at their disposal. Less than a year later, he testified these communities did not retain enough O-4 pilots to meet operational department head requirements. Indeed, the trend lines of O-4 retention in the VFA and VAQ 1310 communities already pointed to crisis levels  well before FY17, with VAQ 1310 failing to meet retention requirements for consecutive years.[4]

Over the past four years, many people have warned of the impending and now current pilot retention problem. Unfortunately, Navy leaders continually have ignored the warnings and dismissed countless articles.[5]

In his testimony, CNP acknowledged that “targeted bonuses have proven most effective and cost-efficient in addressing retention problems in specific communities, jobs, and experience levels to retain high-quality personnel to meet operational requirements.” In this regard, however, the Navy has proven over time its inability to react at the rate the world is moving. Because of this, the next bonus program must be aimed to overshoot retention goals rather than meet the mark. The costs of replacement training, coupled with the exaggerated effect of manpower shortfalls, are greater than any cost of overshooting could amount to.

The Broken Process

The CNP also stated in his testimony that “the Reserve Component is struggling to retain aviators in [the VFA, VAQ and HM] communities, as well as among Maritime Patrol (VP) and Fleet Logistics (VR) squadrons.” While there may be a turnover issue in the Navy Reserve, there are reserve squadrons turning away qualified applicants to the VFA/VFC, VAQ, VR, VP, and VT communities because of a shortage of billets available to access additional manpower.

When the Navy “fails to meet operational requirements,” the story that isn’t told is that non-operational units end up hurting the most. The fleet gets the bodies, and what’s left over trickles down. When you don’t meet operational requirements, there is no trickle, so these production instructor billets—which train the next generation of fleet aviators—are gapped.

The training production squadrons (VTs/FRSs) operate critically below their manning document, with many active-duty instructor billets gapped across the board. At the same time, the fleet demand for aircrew has not slowed to match lower production capacities caused by the lack of instructors.

The most cost-effective solution requested by commanders is to trade gapped billets at production training squadrons that PERS cannot fill with active-duty instructors for additional squadron augmentation unit (SAU) reserve billets that can be filled immediately with qualified and experienced applicants. Commanders are simply asking to take money out of one pot that they can’t use (because the people don’t exist in the enterprise to fill the seats) and put the same amount in another pot that can supply experienced instructors and aviators to fill the gaps.

This should be a no-brainer, and it would be at least a Band-Aid on the retention problem Naval Aviation faces. Unfortunately, these billet transfer requests have been awaiting approval at flag level for up to a year. The Navy’s administrative processes are preventing front-line commanders from executing needed force enhancements and implementing efficiencies. Moreover, leadership inaction on these requests shows a lack of confidence in their commanders’ ability to define their own needs for mission success.

And this is not the only process that is broken. Across the Navy, practices that once worked no longer have the desired effects and hinder operational capabilities. Consider two examples. First, the Navy follows an up-or-out model that prohibits pilots from choosing to just be pilots for their entire careers, thereby missing out on a huge return on investment and acknowledged efficiencies. Second, its use-it-or-lose-it budget policy punishes fiscal discipline and assumes that financial needs to meet the mission remain the same year to year. If you spend less this year, your funding is cut next year, promoting waste rather than honorable stewardship.

Unlike leaders in the private sector who generally are held accountable for the consequences of their decisions by shareholders, military leaders rotate so frequently they have no real accountability for the long-term effects of their decisions. By the time most top-level leaders can wrap their heads around the challenges they are responsible for addressing, it is time to turn over.  As a result, there has been limited incentive to make progress, especially when exposing failures created by predecessors may come at a personal cost of the next star.

Painting the Picture

It is imperative that the limited presentations Navy leaders make to Congress display a deeper understanding and more incisive picture of what the service, and specifically Naval Aviation, is facing. If Congress cannot get an accurate picture of the state of manpower from the Chief of Naval Personnel to know there is a need to appropriate money for relief, how can those down in the trenches expect or believe relief is coming.

True, the CNP is not solely responsible for the information provided in his testimony. Neither are the CNP and most of today’s leaders responsible for the actions that led to the current retention situation. But based on the CNP’s testimony, they appear to be grossly misinformed of the reality the front line is facing.

I believe, however, that Navy leaders consciously filter critical information. Every admiral to whom I’ve spoken has had an impressive career. But the common thread in all of their careers is that they never have lost or been exposed to the other side of the processes. For an overwhelming majority of them, the system has worked, so the processes must be good. While people have been trying to expose deficiencies to our leaders, the idea that something is broken is outside their reality. As a result, it is easy for them to filter the warnings based on their own personal experiences.

This is not the first time Naval Aviation has faced poor retention. The current ACCP program was last overhauled in the late 1990s for this reason. Airlines were experiencing massive growth and setting the market value of the pilot skill set much higher than Navy base pay could match.[6] (Coincidentally, before this year, the late 1990s also was the last time the caps on ACIP were updated to target retention.) Retention did improve in the early 2000s, but it was in large part the result of economic factors outside the Navy.

The Road to Redemption

The path to better retention is complex. It will involve the Navy offering a compensation package of both monetary and nonmonetary enhancements. While the CNP’s testimony touched on improvements, senior Navy leaders have yet to display an understanding of the marketplace for talent, especially as it relates to aviators. The package needs to be competitive, not just marginally improved, to compete in what CNP described as a “war for talent.”

People leave the Navy for many reasons. For pilots, it’s been said that money is not near the top of the list.[7] While this may be true, it highlights a fundamental misunderstanding. Saying you would have stayed for more money is taboo, but most pilots would consider staying in the Navy if the money gap wasn’t so significant. When the opportunity comes to leave the Navy, they—like me—do a cost-benefit analysis that balances financial considerations with the stability, pride, and security that continued service provides. To that end, everyone has a financial threshold at which they would be willing to stay and help fix the problems with readiness, processes, flight hours, operational tempo, and so on—problems caused by past leaders not knowing when to say no to things such as a two-carrier presence.

The Navy must do better when it comes to fair or competitive compensation.[8] A competitive package is one commensurate with the work that is required to recover and rebuild and that narrows the gap in the standard of living between those who leave the Navy for the private sector and those officers and families who choose to stay.  At the same time, it can allow for reasonable credit for the nonmonetary benefits of continued service. 

I caution leaders to not overvalue the “call to service” as a nonmonetary benefit when determining what is required to improve retention. [9] People do value feeling that they are part of something bigger than themselves, but it cannot make up for all other shortfalls, and it can be undercut by poor leadership decisions.

To be competitive today, the dollar portion of the equation will require a number greater than the limits of the current NDAA, and intangibles must show enhancements for the long-term sacrifices families are making. However, changes can happen only if Navy leaders accurately represent the urgency of these needs to Congress.

Regarding pilot retention, Rear Admiral John Meier said, “We are kidding ourselves . . . if we think that we will buy our way out of this.”[10] Despite all I have said about compensation, I think he is correct. The foundational cause in the retention crisis today is not just money, it also is trust. While the Navy can buy time—as any employer does—the Navy’s leaders must earn trust. 

Unfortunately, our leaders have broken trust with the fleet. The fleet has been run aground by leadership decisions that attempted to meet the unsustainable requirements of 17 straight years of war. Commanding officers are not trusted to manage the smallest issues without multi-star staff intervention. Pilots who choose to stay in the Navy—forgoing a sizable increase in lifetime earning potential, the flexible tempo of being an airline pilot, and the ability to choose simple things such as where to live and raise their families—are being asked to repair the damage of past of leadership decisions and funding shortfalls and rebuild the fleet in exchange for little more than a “Bravo Zulu.” And if people accept that deal, they risk having their careers derailed at any point for something as trivial as poor timing.

In his 2018 testimony, the CNP says the Navy’s leaders are seeing a “decline in propensity to serve.” This reflects a gross misunderstanding of the true issue. It has become impossible to trust that our leaders are fighting by our side, on our side, or that they will provide the aircraft, parts, flight hours, resources, etc., required to turn the corner. Because of the actions of Navy leaders, people no longer believe they are “part of something bigger,” and it is directly reflected in retention shortfalls.  Improvements to monetary compensation, while not absolute, are only the part of the solution anyone can use to measure, in real time, how seriously Navy leaders are addressing this problem. Without that, there is no way to trust the promises that are being made.

A Goal Without a Plan Is Only a Wish

So how can Navy leaders restore trust? While leaders want to fix retention, they don’t fully understand the depths of the problem. At the same time, a leader who does not listen or understand and address the problems is far more dangerous to the organization by breaking good faith than a leader who openly acknowledges the risks and problems, even if he or she lacks solutions. 

It comes down to communication. Leaders’ failure to listen has caused them to mischaracterize and misrepresent the loss of trust as a lack of desire to serve. If they listened closely, they would realize there are many people who would love to continue to serve, even at monetary sacrifice—under functional conditions.

Leaders must actively listen; believe the warnings are real, regardless of expectation bias; and represent their people on things such as higher NDAA limits on ACCP and ACIP—not out of greed, but to allow the Navy to remain competitive and flexible, be wise with the investments it has made, and not leave those who remain to do more with less. Most important, leaders have to recognize and represent the truth frankly, even if it’s not what they want it to be or if it exposes flaws in past decisions. 

Finally, Navy leaders cannot let bureaucracy take us into a knife fight in a phone booth holding a wooden spoon. If we are so limited by bureaucracy that no matter how hard top Navy leaders try, they cannot fix the broken processes, it is time for all of us to walk out the door. The task may seem overwhelming, but there is a myriad of highly intelligent people clamoring for the opportunity to help. This is a perfect opportunity to trust commanding officers and push operational decision making back down the chain. Front-line commanders can have a more direct and daily impact on front-line issues such as retention than any flag officer could ever dream.

Restoring the foundation of trust within the Navy is a critical step toward solving retention issues across the fleet.

As retired Rear Admiral Mike Groothousen said, the retention data shows Naval Aviation is “losing the heart and soul.”[11]  The only thing that will right this course is a rudder correction of unprecedented speed and magnitude. It will be a challenge, and it will take the whole team to succeed. Senior leaders must act forcefully to address today’s problems and remove the obstacles that inhibit our ability to react at the rate the world around us is moving. Once they start the turn, the fleet must support them and look for ways to help make the Navy better, not waste effort focusing on the “difficult times ahead” or how we got here. This evolution will undoubtedly make the Navy more efficient, more adaptable, and more lethal, for far more years than our current course.

Author’s Correction: In “To Fix TacAir Pilot Retention, Follow the Money,” I misquoted PERS-4, Rear Admiral John Meier, as using the term “mess” in his answer at the Tailhook ’17.

Lieutenant Commander Kochanski has more than 4,000 total combined flight hours, to include four years and 1,000 hours as a military flight instructor. He deployed twice as an EA-18G pilot, flying 327 hours and 132 combat missions in support of Operations New Dawn and Enduring Freedom.