Is it time to rethink Army contracts?

This article poses some questions about the lengths of Army ‘contracts’; the Variable Engagement offered to soldiers, and the commission system offered to officers.   The aim is to spark debate and seek feedback because these contracts, and wider issues of service, are being examined by Programme CASTLE; in which the Army is rethinking career structures, learning and development, and talent management.   Although this article is specific to the Army, wider engagement will help shape potential policy refinements across the Armed Forces.

The Length of Service Project is challenging assumptions about how personnel serve and asking questions such as: should regular Army officers retire aged about 55? Why not older? Should the Army offer soldiers a 12-year engagement from joining, with an option to leave after just a few years? Would there be benefit in offering shorter soldier engagements, potentially to attract those not willing to commit to a 2 or 3 year minimum?

Potential areas for change

Programme CASTLE is also considering structural, financial, cultural and perception issues associated with length of service.  So far, it has uncovered potential areas for amendment and these are discussed below. However the Army system is not completely broken and CASTLE wants to establish what should be retained, as well as what should change. 

An example of a more recent refinement that feels logical to retain is the 12-year short service commission. Before it was announced in 2015, sub-unit commanders needed to quickly assess subalterns’ suitability for an extension to their 3-year short service commissions.  Without an extension recommendation in their first year, they would inevitably worry that they could be soon out of a job.  It also meant that officers were judged and graded in the early stages of their careers before they had time to develop into role.  Subalterns have jumped at the chance to convert to the 12-year engagement.  It was a ‘no-brainer’ in terms of job security and removed unnecessary pressure to both display and assess longer term potential in their first year.   This has been a positive move for the Army.

This modern lived experience seems to validate one of the principles laid out in the Goodbody report, ratified in 1960 but still influences our personnel policy. That principle being to attract good people, the Army needed to offer them a certain degree of job security.  Although some millennial’s are apparently more comfortable with portfolio careers, this principle still remains relevant.  It feels like we should retain it but offer more flexibility to those who don’t want to take up longer offers. 

What needs to change?

Having offered a case for consistency, let’s look at what needs to change (or revert).  One of Goodbody’s other design drivers was the alignment of pension payment points with career lengths.  Goodbody suggested retiring field officers either needed to establish a new career (supported by a small pension) or serve long enough that they need not work again (supported by a larger pension).  An adequate pension to sustain them without other work from 50 to death was deemed unaffordable at the time, but service to 60 was undesirable because older officers would be out of touch with unit life.  The compromise was 55, and so regular commissions were designed for service to a normal retirement age of 55 and a full pension.  In 2001, the aged based terms of service were introduced, but by tethering a Regular Commission to 34 years’ service, the Army did little to change the career end date from the mid-50s, given that most officers commission in their early 20s.    

The introduction of the 2015 pension scheme challenged this principle of alignment of career mile stones and pension payment points because it moved the key payment points.  The Army recently adjusted intermediate regular commission (IRC) lengths out to 20 years’ service to enable those holding them to reach the new early departure payment point.  In doing so it partially restored the alignment previously achieved between the old IRC and the 1975 pension’s ‘immediate pension’ point but has not yet adjusted the length of a regular commission to enable service to the new normal pension age of 60. 

Service to 60?

There is arguably a case for enabling longer service (especially to 60).  It would enable the payment of larger pensions upon completion of a full career, rather than the smaller early departure payment from retirement until the state pension age.  It could provide an improved return on investment in our people, deeper knowledge and skills, and larger pensions might retain some talent for longer.  Meanwhile people are having children older, coupled with an increased life expectancy, might mean that officers in their late 50s can remain in touch with unit life and still be able to cope with the physical demands of service.

So much for the benefits, what of the drawbacks?  The structural cost is potentially significant and even modelling that cost will require some extensive assumptions on what behavioural change will manifest.  There could be slower promotion rates or the increased use of compulsory retirement of senior officers to maintain existing promotion rates.  Both measures would require and/or drive cultural changes.  It would also lead to an older army and the perception of this could impact our standing with both allies and adversaries.  Perhaps the answer, is to adopt a more tailored, personalised approach.

By offering longer service only where the Army’s strategy indicates we need to retain talent for longer, rather than simply offering longer service to all, we could balance the benefits against reduced drawback of a blanket approach.  We don’t have all the answers though.  As CASTLE completes its define phase and switches to design in March 2019, we would value your views.