“Not for profit, but for patriotism.” Senator John McCain used that statement in 2008 to describe his military service.1 No one joins the military for the money, but as time progresses, priorities change or evolve. The aviation retention bonus for naval aviators was established by the 1981 Defense Authorization Act in an effort to keep aviators with a marketable skill set outside the Navy flying in military cockpits. The bonus increased this year for the first time since 1999, but retention of naval aviators continues to be an issue, and the bonus may need more growth and flexibility to keep warfighters flying Navy aircraft.
Background
The naval aviation retention problem began manifesting itself on this year’s aviation department head screen board. There were 45 aviators (14 percent of the total selected) who screened for department head that did not appear on the FY-18 aviation department head slate, in addition to the 56 aviators who submitted “don’t pick me” letters to BUPERS prior to the board. The FA-18 community had the largest disparity with 80 aviators selected and only 65 of those appearing on the department head slate. VAQ was next with 27 and 20 respectively.2 In addition, there were only 34 eligibles to fill 76 required operational-training(OP-T) department head billets.3 The lack of OP-T department heads leaves gaps in key billets in the weapon schools and training squadrons.
This year’s department head board results do not come as a surprise. In 2014, Commander Guy “Bus” Snodgrass wrote an article, Keeping an eye on the horizon, that took an in-depth look at the looming retention problem in the Navy. He outlined the primary reasons for officers leaving: continued high operation tempo (OpTempo), loss of “combat” mentality, and improving economic trend lines.4 His paper distilled many of the conversations that already had been occurring in ready rooms and still are occurring three years later. As proof, during the PERS-43 brief during the 2017 Tailhook reunion in September, not flying enough, high OpTempo, work-life balance stressors, and airline hiring were highlighted as the reasons for naval aviators leaving the service.5
Over the years, I have taken part or listened to many conversations among naval aviators regarding the draw to either stay in or leave the Navy. Intrigued by the conversation, I wanted to reach out to a larger group of naval aviators and gather more data with an online survey on retention. I created a survey that primarily focused on how the new bonus message was received by those at that critical crossroads in their Navy career.
Sent out in July 2017, the survey has had 284 responses with representation from all naval aviation communities (Figure 1) and designators (Figure 2). I elected to separate the data into three groups when I created the survey: those with an active service duty obligation (ASDO) that ended in FY-17 or before (those who have already made a decision on previous bonuses), those with an ASDO ending in FY-18 (those that the current message applies to), and those with an ASDO ending in FY-19 or later (those who will have to make a decision based on future bonus messages). There were 59 responses from the FY-17 or before group, 64 from FY-18 and 161 FY-19 or later (Figure 3).
Figure 1.
Figure 2.
Figure 3.
The Bonus
The ready room conversations reached a crescendo in June 2017 when the Air Force grabbed headlines by announcing a $455,000 retention bonus for their pilots. That is a big number for a headline, but the math works out to $35,000 a year for 13 years for a specific cadre of pilots (tier 1 which are 11f fighter pilots). Besides a 13-year option, the Air Force bonus has additional bonus lengths of one-, two-, five- or nine-year options for the same $35,000 a year. Overall, the Air Force bonus has seven tiers of decreasing bonus dollar amounts for aviators. For example, the next tier, which includes bomber, special operations, and mobility pilots, receive $30,000 a year.6
To much less fanfare, the Naval Personnel Command released the FY-18 aviation department head retention bonus (ADHRB) message on 5 July 2017 of this year with NavAdmin 162/17. Like the Air Force, the Navy has tiers for different communities with VFA and VAQ pilots receiving the highest amount at $30,000 a year, an increase from $25,000 a year in previous years. Unlike the Air Force, however, the only option for contract length is five years. Another change to the bonus this year is the additional $2,000 a year for weapons tactics instructors (WTI) and/or graduates of test pilot school (i.e.“patch wearers”), making the maximum amount available $32,000 a year for specific aviators.7
The Navy found itself at a disadvantage by releasing the bonus message after the Air Force announcement. Even for those that do not consider the National Defense Authorization Act for Fiscal Year 2017 light reading, it was apparent that Congress had raised the limit of the aviation bonus to $35,000 after the Air Force released its bonus plan. Yet, the Navy’s max amount this year was $30,000. Although this was the first bonus increase since 2000, $30,000 does not and will not keep up with inflation ($25,000 in the year 2000 dollars would be $35,442 in 2016).8 Combine that with the Air Force offering $35,000 raised some eyebrows as one survey respondent pointed out: “only raising the bonus to $30K when Congress made the new limit $35K is insulting. Candid conversations at work with the younger JO’s show that this decision has been interpreted as a heavy slap in the face and an indication that Big Navy has no idea how bad their retention problem is about to become.”
Also new to the bonus this year is the addition of the patch wearer bonus. The concept is interesting and a step in the right direction, rewarding those with advanced qualifications. Those individuals are the ones the Navy should be aggressively lobbying to stay in the service and fill leadership roles. But unfortunately, it is not enough. With only $2,000 a year, the amount still does not reach the full amount authorized by Congress. One patch wearer who completed the survey commented “(t)he Navy leadership puts a $2k/year value on the expertise and countless hours that were put in over ‘non-patch wearers’. Nothing against non-patch wearers, but no one will argue with the fact that the amount of work/sacrifice put in by [WTI’s] exceeds 2k/year. Nice wallet reach.” Of the 51 survey responders who said they were patch wearers, only five indicated the additional $2,000 influenced their decision to take the bonus.
Another disadvantage the Navy bonus structure when compared to the Air Force is the five-year contract. There is no other commitment option for taking the bonus. The Navy got rid of the three-year option in 2005 and the two-year option in 2012 (the 2011 two-year option was $5,000 a year). The five-year contract is savvy business on the Navy’s part. Most aviators would be eligible for the bonus around the nine- to ten-year mark in their career. A five-year contract gets them through their department head tour and follow-on orders post-department head. This puts the aviator at a minimum of 14 years in the service, making difficult the decision not to go the full 20 years for retirement. The Navy gets two tours out of an individual despite the name aviation department head retention bonus. In addition, the Navy likely will get the individual for six more years should he or she decide to stay in for full retirement. Due to the pay inversion that results after the bonus contract is up, an aviator makes less money as an O-5 not on the bonus than they did as an O-4 on the bonus, or as Commander Snodgrass pointed out in his argument for reinstatement of the command bonus: “lower ranking officers—with far less responsibility—making more than their commanding officers, sending a negative signal regarding the value of the commanding officer position.”9
In the survey, aviators reiterated the prospect of taking follow-on orders post department head tour or the inability to lateral transfer as a negative to the current bonus length. They most likely would be forced into a non-flying job with no ability to negotiate. Follow-on orders also could reduce the option to transfer to the reserves: first, if an aviator is serving a non-flying job, they become less competitive due to the lack of currency; second, an aviator would be eligible for promotion to O-5, disqualifying them for most flying reserve units. Overall, 56 percent of the FY-18 ASDO respondents that did not take the bonus or are not taking the bonus identified the length of the bonus as the reason why.
Solutions
First, the Navy must maximize the full amount authorized by Congress for the bonus. Offering less exacerbates the disconnect from the bureau and ready rooms. One of the largest factors affecting the current retention problems is the airlines are hiring at a rate not seen since before 9/11. The Navy has to face the fact that the quality-of-life upgrade and larger paycheck offered by airlines has put the number to keep most naval aviators higher and higher. A 2004 Center for Naval Analysis found that “a $1,000-per-year increase in ACCP [the bonus] is associated with an increase in the retention rate of .6 percentage point.”10
For some, however, money is enough to offset the high deployed operational tempo and the decreasing flight time of the last several years. For one aviator, “It’s not enough to offset the quality of life loss. I refuse to go back to Lemoore or a fleet that is falling apart.” Of the 267 aviators that responded to “what bonus amount would keep you in the Navy”; 95 said $35,000, 30 said $40,000, and 60 said greater than $40,000.
Since money is not the single driving factor for naval aviators taking the bonus, the Navy needs to open the scope with regards to contract length and payout methods. Giving individuals options allows them to feel in control and they will be more willing to consider the offer. A three-year contract could appeal to the naval aviator who is on the fence. It would allow them to serve as a department head and then give them options post department head. They could take one more flying tour to gain currency and the hours needed to be more competitive for the airlines or simply to clean up their finances. Or if they have a desire to do something else in the Navy post department head, such as transfer to another designator or the reserves, those options are still available. Of the survey respondents, 141 (Figure 4) indicated they would take a bonus to coincide for one more sea tour (i.e. through department head).
Figure 4.
For those that know they want to make the Navy a career, a longer option is appealing to avoid a “pay inversion” post department head. As the new blended retirement system comes into play, this is important for the Navy as well since the push for that 20-year retirement check is not as critical for those wanting to leave the service early. Of the respondents, 68 indicated they would take a longer than five-year bonus. Overall, when asked about what contract length they would like to see (with multiple selections allowed), the three-year option was the most popular followed by the five-year, two-year, and seven-year options (Figure 5).
Figure 5.
Lastly, a lump-sum option should also be available. A lump-sum option was available in 2010 and prior, but removed in 2011. A larger amount of money upfront could offset some of the issues with the amount authorized. Individuals could use it to make a major life purchase such as buying a house or invest it for retirement, potentially increasing the amount of compounded interest over time, thus increasing the value of the bonus they received.
The Navy must be willing to show its naval aviators that it can be flexible and provide service members with choices. The Air Force recognized this concept with the structure of its new pilot bonus. Speaking to Congress, Lieutenant General Gina Grosso, the Air Force personnel chief, “told lawmakers that the shorter one- and two-year extensions were a way to ‘build trust with airmen’ that the service is getting serious about trying to fix the problems driving out pilots and other skilled officers.”11 Naval aviators want the chance to excel at their warfare specialty and options available to them as their personal goals change. So too, the Navy must also continue to build trust with its aviators to fix retention before it gets worse.
Endnotes
- During a 2008 Republican debate
- http://www.public.navy.mil/bupers-npc/boards/screenboards/aviation/Pages/default2.aspx
- Pers-43 Briefing, 2017 Tailhook Reunion
- Snodgrass, Guy. “Keep a Weather Eye on the Horizon: A Navy Officer Retention Study.” S. Naval Institute Blog. 20 March 2014.
- Pers-43 Briefing, 2017 Tailhook Reunion
- “Air Force rolls out 13-year, $455,000 bonuses for fighter pilots.” Air Force Times. 5 Jun 2017.
- Aviation Department Head Retention Bonus Program, NAVADMIN 162/17. 5 Jul 2017.
- https://westegg.com/inflation/
- Snodgrass, Guy. “Keep a Weather Eye on the Horizon: A Navy Officer Retention Study.” S. Naval Institute Blog. 20 March 2014.
- “The Effect of Compensation on Aviator Retention.” 2006 CNA Study.
- “Air Force rolls out 13-year, $455,000 bonuses for fighter pilots.” Air Force Times. 5 Jun 2017.
