How the UK's Armed Forces can improve the offer for their service personnel
After recently retiring from the Royal Navy, Commodore Steve Prest said the Armed Forces must improve the employment package on offer, and using sailors as an example he outlines how they should do it.
In my previous article for Forces News, I wrote about needing to improve "the offer" to recruit and retain sailors in sufficient quantities to meet the needs of the service and the nation.
A number of correspondents on social media and elsewhere challenged me to expand on this and offer some more specific solutions rather than leave the point simply with the articulation of the problem.
Forces News has kindly invited me back to meet this challenge.
Of course, this is applicable to service personnel from each of the Armed Forces; but sailors are perhaps the most challenging to recruit and retain, and I will use sailors as the example where one is required.
We must accept that we are in a competitive market for people and skills. Without the tool of conscription (via press gangs or whatever) we must convince our people that their life is better inside the service than outside it.
This is not all about money (although money is important) but rather the totality of the offer – in the jargon, the 'total reward framework'.
Over recent years, the value of this offer has fallen, even in its own relative terms.
We now ask more of our people and, in its 2023 report, the Armed Forces' Pay Review Body observed that: "Armed Forces' pay has fallen in real terms over the last decade and the pay comparison analysis shows that pay for our remit group has mostly fallen relative to others in the wider economy.
"The lowest paid personnel experienced the highest deterioration in their position in the distribution of whole economy earnings."
This needs to be addressed. Sharpish! That will require more money to be allocated to the pay account, and to improve other areas of the offer such as accommodation and food. There is no way to fudge this and with the defence budget now increased there is an opportunity to do just that.
Nonetheless, tough choices may still be necessary to pay for what is needed. This is a prioritisation question, but if people really are "our most important asset" then that must be reflected in our allocation of the departmental budget.
A significant proportion of defence spending already goes on capitation costs, of course, and we need to ensure that we are making most efficient use of this, but there is clearly more to do.
We may need to accept that we will do less short-term activity if we want to have the right people to do the most important things properly when it really matters. Otherwise people themselves, rather than money, may then be the constraining factor.
This will be seen as defeatist and self-limiting by some, but the alternative is continually trying to do more than the Armed Forces are resourced for – a recipe for failure in any organisation.
And in such circumstances the 'final straw' will appear unexpectedly – the thing that stops the ship or submarine from sailing will be the last skilled sailor that decides enough is enough.
Much better if the constraints to your output are understood and deliberately managed rather than allowed to catch you by surprise in a crisis.
Given that the Armed Forces are the responders of last resort in time of national crisis, leaving the management of this risk to providence seems like an unwise strategy.
There is an old military maxim, the truth of which we saw recently with the Queen Elizabeth-class carriers: two is one and one is none. We need a similar mindset to our workforce planning.
Taking a step back when necessary, will allow us to take two paces forward when we must.
Pay in other areas of the public sector has also fallen behind over the last decade or so, but Armed Forces personnel do face unique demands and liabilities.
The package must reflect the fact we employ skilled people who have a liability to work away from home for 660 days out of every three years in austere and potentially hostile environments.
We must analyse the actual market sectors we are competing with and set the package accordingly. In many cases, this is not the public sector.
This may need a remarkably different pay model from the one we have now – one based (at least in part) on the market value of individuals' skills not just on their rank (although that is a good proxy for their level of responsibility – another important factor).
Encouragingly, the implementation of the Haythornthwaite Review of Armed Forces incentivisation recommends exactly such an approach.
If we accept the premise that service people only stay in the Armed Forces for the reason that they believe they have a better quality of life inside the service than outside it, it makes sense to analyse what the elements are that make up his or her quality of life.
I would argue that you could usefully split them into two categories: what your life is like onboard/at work and what the package enables you to do when you are not onboard/at work:
Onboard (most of the unique factors about service life):
- Routines
- Accommodation/living conditions
- Food
- Professional satisfaction
- Equipment and training
- Opportunities for travel runs ashore (Join the Navy, see the world!)
- Sport/AT
- Camaraderie
Offboard (directly comparable to alternative employers):
- Pay and allowances
- Pension
- Leave (how much time do you spend at home and, very importantly, how predictable is it?)
- Housing
- Schooling
- Health care
The value people ascribe to each of these different factors will be unique to the individual and will change over time. In understanding why people make the decision to stay or go we need to consider how each of these factors contributes to the view that life will be better or worse outside the service.
The problem of gathering evidence here is two-fold: first, people do not know themselves how they will respond to different incentives.
Repeated experimental evidence suggests that people are very bad at predicting how changes to the offer will actually affect their behaviour. So even if they answer honestly the data may well be inaccurate.
The second point is that people often don't answer honestly, especially when faced with authority. Why lie?
The social awkwardness of giving an honest answer often isn't worth it; we are told what people think we want to hear. If we overly rely on such mechanisms for management information, we are likely to make decisions on distorted evidence.
Another example is the leaving interview. Like any relationship break-up, the initiator (unless they feel wronged) will always try to convey some sense of "it's not you it's me" when giving reasons.
We need to correct for these biases. Properly designed randomised control trials would help (not pilot programmes with a pre-selected outcome); but ultimately giving the individual more agency is the way to identify true revealed preference.
Of course, to give individuals control, the services need to give up a commensurate level of control and that is a real challenge when there's an imperative to get 'bums on seats' in order to get ships and submarines to sea.
What could this mean in practice? It could mean that the money associated with many of the offboard factors is available for the service person to allocate.
Don't want Continuity of Education Allowance? Fine, some more money into your basic pay. Don't use service housing? More money into the pension. But if you need/want those things there's a value to them – accessing them gives you more financial value than just the immediate cash.
These things become a graphic equaliser to dial up and down, within an overall envelope but, most importantly, within the control of the individual.
So, the services must give people agency over that which they can. They should be bold here – it will be uncomfortable and unfamiliar, but the modern workforce will expect and demand it.
The management of this risk is to really understand the motivation of service people and ensure that the elements listed above (and others – the list is not exhaustive) are maximised to give people what they value.
Aligning the incentives for people to behave in a way that the services desire is the winning formula here. It's about the 'nudge'. Of course, there will be times where compulsion is required.
Orders are orders, and structure and discipline are attracting factors of life in the military. We mustn't shy away from that, but neither can we use 'needs of the service' as a fig leaf for poor management practices and under-resourcing.
Once the 'transactional' elements of the offer are framed and addressed, the Armed Forces would be well advised to try to put those into the background and focus on the ethos of the relationship between the service person and the service – those elements of 'the offer' that money can't buy.
These elements are the truly unique offer of service life, which can be brilliant. I loved it! People will work harder where their relationship with their work is based on social norms rather than transactions.
This effect is likely to be even more prevalent when it comes to work that involves highly dangerous activities or significant personal sacrifice.
Experimentation shows that transactional relationships are less likely to engender selflessness, teamwork and sacrifice; qualities highly prized by the Armed Forces.
It follows then that defence must avoid a contractor-like relationship with its employees and seek to enhance the sense of belonging to a social, professional and service entity if it is to engender the loyalty and commitment in its people required to support readiness for, and success on, operations.
To do that it needs to take the 'offboard' elements of the deal out of the mind of the service person by making 'the offer' good enough that it ceases to be an issue.
It must then put sustained and conscious effort into making the 'onboard' experience as professionally and socially rewarding as possible. This is not nice to have, this is the vital ground.
Whatever that cost is, Defence will not generate a sustainable workforce model until it is resourced it; and that calculus may be brutal. If that (or wherever the balance lies) is the truth, we should not shy away from it because it is inconvenient.
But that is just the beginning; creating the environment where our people truly belong and thrive will build on these foundations. The good news is, the Armed Forces knows how to do this and there is good practice out there aplenty!
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