Marginal Gains and the Army Reserve

Soldiers rarely understand costs.  Personnel, ammunition, fuel, and rations just turn up. However, soldiers do understand risk.  Risk to structures, equipment, headcount, and cap badges.  With a Defence review pending the Armed Forces are on the hunt for savings.  A limited understanding of costs means that bean counters, some in uniform, will look to cut headcount and the Army Reserve will be in their sights. 

The Reserves are expensive not because of Reservists headcount but because of the fixed costs of permanent staff instructors (PSI) and other full time staff.  Costs are fixed because, irrespective of the number of Reservists who attend training, permanent staff have to be paid.  As a rule of thumb, permanent staff cost almost the same in wages as the entire Reservist cohort of the unit they support.  The core argument this article makes is that the Army Reserve should adopt an ‘Uber’ style business model and shift to on-demand training and admin support to reduce these costs. 

This article starts by examining the purpose of the Army Reserve since the publication of Future Reserves 2020 (FR2020) in 2012.  It will show that Reserves have previously been a target for savings and that the Regular force has not used the Reserve in the way envisioned by policy makers.  It will then give some examples of how Reserve unit structures can change to reduce costs by establishing centralised training and administrations teams.  These teams can be created by reducing dedicated Regular support to Reserve units.  To fully exploit this change, the article will also argue for legal changes that are essential to Reservists being able to deploy on operations. 

The result of these changes is a financial saving in the region of £36M.  The fact that savings are small is no reason not to make changes.  The ‘aggregation of marginal gains’ is the approach the British Cycling Team took that led to a raft of gold medals.  If the Army, Regular and Reserve, began looking at their personnel costs in an empirical way, and started trying to find marginal gains, such as this proposal, the change would add up to some much needed gold for Defence.

The Purpose of the Reserves

The fundamental purpose of the Army Reserve is to provide strategic depth.  In 2012, FR2020 renamed the Territorial Army to the Army Reserve and with a new name came an additional purpose; the sub unit operational reserve.  The US Army already sees its Reserve Forces in this way with the Army Chief of Staff stating “Is it a strategic reserve or an operational reserve? I would argue it’s both”. Clearly then, others see different models as workable for supporting long term deployments.  But, given that the Chief of the Defence Staff spoke publicly against the sub unit policy in 2014 it gave the Regular Army, already sceptical of the Army Reserve, reasons not to see if it could work. 

As evidence of FR2020 not being followed, in 2016 the Army only deployed two formed Reserve sub-units, approximately 175 reservists, from a force of 22,000.  In the same year about 150 individuals deployed to augment the Regular force highlighting that the force had not planned effectively to utilitse a sub-unit reserve.  Unlike with Regular soldiers whose time the Army owns, Reservists need flexibility.  For example, they may only be able to do half a tour but have a skill vital for that deployment, so someone else has to be found for the other half.  This creates friction for force generation that a largely Regular force is not used to and sees an unnecessary effort.  This creates a vicious circle.  Because Reservists are perceived to not be deploying sub units, Regulars question their wider value, without giving enough attention to why they are not deploying.  If they created enough flexibility to facilitate getting Reservist sub-units on operations, they may deploy more often. 

Back to the Future?

Most proposals within the UK Defence Community show both a bias toward the Regular force and a limited understanding of how the Reserve is planned to operate.  In part this is because Reserve forces have never operated in line with FR2020.  In 2018, the blogger Think Defence (TD) suggested that the Army Reserve should revert back to territorial defence and undertake unpopular commitments such as public duties.  Theoretically, this reduces the burden on the Regular force allowing a greater focus on operations.  As a concept, it’s not without merit. 

But such proposals ignore the motivations of why people join the Reserve, which is to be ‘useful to the military and the epitome of this is … deploying on operations’.  Reservists do not want to be the poorly trained and equipped Dad’s Army stereotype of yesteryear.  And they do not want to be part time square bashers.  TD’s proposal would create a self-fulfilling prophecy by making Reserve service so dull that those who might deploy would simply leave through boredom.  The Reserve would then have less utility and there would be justification to cut further.

Like many proposals, TD’s article stays in the conceptual and contains no financial detail.  This highlights the extent to which defence commentators do not understand finance.  It’s easy to think of defence in terms of deployed capability, but the personnel line of development demands significantly more detail.  How many posts?  What rank? Which trade?  The blunt instrument of deleting some headcount is the opposite of the quantified marginal gains strategy which requires a mastery of detail, not big hand small map proclamations.

Follow the Money 

The budgets of Reserve forces are a common target for savings.  During the last major Defence review in 2009, the then Chief of the General Staff ordered the cancellation of all Territorial Army training effectively pausing the Reserve.  This was the only saving offered up willingly by an Army keen to prioritise other outputs.  Given the size of the savings (£43M) against the billions needed, this seemed to be a symbolic act to publicly demonstrate the priority of the Regular force.  Against the context of the time, when dedicated Reservists were deploying in their thousands to Iraq and Afghanistan, it shows that the Army neither valued the Reserve nor understood financial planning.

To reform the Reserve savings can be made in the ‘back office’ to protect front line Reservist numbers.  Here, British cyclying’s marginal gains mindset can make a difference.  Savings can be made by utilising modern business models such as an ‘on demand’ and ‘shared service’ structures that align supply and demand.  Reforms should focus on two areas:  training provision (both individual and collective) and personnel administration support. 

Financial Reform: Infantry Case Study 

The cost of wages to employ permanent staff in a Reserve Infantry Battalion is 88% of the cost of the total bill for Reservists wages.  The permanent staff wage overhead for days of output is excessive against the actual demand on permanent staff time. 

As a social trend, the UK is adopting an ‘on demand’ mindset.  A recent UK Government report on Mobility as a Service (MaaS) stated that ‘users [are] buying transport services as packages based on their needs instead of buying the means of transport’.  Shared services are a way of ‘concentrating administrative activities into a centralised and commonly shared function’.  Just as this is true for owning cars or talking to your bank, so it should be true for support to the Army Reserve.  The most well known example of ‘on demand’ is hiring an Uber.  There are few, if any, banks that don’t use this model with many offering 365/24/7 and online services to direct customers to these away from fixed branches.  The use of these business models would better align demand to supply. 

Uberisation of Training Support

The Army Reserve can use an on demand system to resource training.  A simple way to think about this ‘training Uber’ is a central team booked when required.  For best effect, these teams should provide both individual and collective training up to Company live firing.  This is a good benchmark to ensure that a sub unit is ready for operations inline with FR2020. 

To deliver these training teams requires a bold re-organisation of Reserve workforce.  As it stands, each Reserve Infantry Battalion has three specialist platoons with each having its own regular permanent staff instructor.  This is true for other parts of the Army.  Reserve Royal Artillery Regiments have five permanent (PSI or FTSR) staff for 89 Reservists in a sub unit. 

Infantry Battalions should have one dedicated company specialising in one of the skills; Mortars, Anti-Tank, or Machine Guns.  Across the 16 Reserve Infantry Battalions this would free up 32 Regular posts.  This liability (not necessarily the individual) can then be reinvested into a centralised ‘on demand’ training team.   

For best effect, training teams could contain six soldiers and be able to deliver a maximum of 16, two week sub unit training camps, 32 weeks in total.  This leaves to support additional courses such as promotion cadres, weekend training, time off in lieu of weekend work, planning and individual development.  These teams could also be augmented with Reservists providing more national opportunities for employment.

A team of specialists that can run enabling courses (Signals, Range qualifications, PTI, Driving) would add valuable utility.  Once qualified, these Reservist enablers will improve weeknight and weekend training, which would improve wider attendance.

Centralising Personnel Support

A shared service model could also be used to help the Army Reserve reduce costs by getting more out of dedicated personnel support posts.  From a virtual location, administrators can support a minimum aggregate number of Reservists, and affiliated to a maximum of, three subunits, or around 300 Reservists.  Given that a Reserve unit only produces about 12% of the Service days that a Regular Unit, this set up would equate to just over a third of what a full time Regular administrator might support.  To align supply for services and demand, Reservists could send ‘trouble tickets’ highlighting problems with pay or allowances.  Any available administrator could then deal with the ticket and the individual would not have to wait until their unit’s staff were available. 

Talk candidly, and off the record, and many ex Regulars supporting Reserve units will admit that they are ‘doing a part time job on a full time salary”.  Full Time Reserve Service (FTRS) Officers posts in Reserve Battalion include Battalion Staff Officers such as the Regimental Careers Management Officers (RCMO).  Currently each Battalion has its own in spite of the reduced workload when compared to Regular Battalions.  Under this proposal, one FTRS Officer will service four Battalions, saving three posts.  Even supporting four units, the single RCMO would still only support only about half the number of Service Days that their Regular equivalent does.  This increase in workload is eminently achievable. 

Investment is Needed

To fully enable this there will need to be investment in IT equipment to work on the move.  A laptop, and smartphone are the minimum.  Post COVID this way of working, which may have seemed alien to the Armed Forces, should now be much more acceptable.  A travel budget (both time and money) would also be necessary.  Home working would be the norm for most of the time.  The key to making both of these reforms successful is  mind-set.  Commanding Officers would no longer “own” these individuals and would need to get used to ‘renting’ their support on demand. 

Regular staff supporting reserve units must be ordered to conduct other tasks to get more out of their time for the benefit of the Army.  One idea is that they should study for a qualification that is of use to the Army, for example an MBA.  These individuals could then enter the Army External Placement Programme (AEP).  It would allow individuals to work alongside industry, putting their study to work and gaining experience in the civilian sector.  When their two year tour is over, these personnel will have experienced how a Reservist balances two careers, be better educated, and bring back industry best practice.  

Essential Legal Changes

Unless compulsory mobilised Reservists have no legal protection and so cannot deploy without risking losing their primary livelihood.  This means that the nation’s investment in their training is often lost.  Legal reform is needed to solve this.  With some minor tweaks, UK parental leave policy could be used as a blueprint for Reservist employment policy.  It states ‘an employee has the right not to be treated unfavourably or to be dismissed because they are taking, or are seeking to take, parental leave’.   In line with FR2020, a Reservist would be entitled to six month Reserve leave, once every five years.  Throughout, they would be paid in a similar fashion to how a Reservist is paid now whilst mobilised, with the government making up the difference in pay between the Military and Civilian wages.  With legal reform and an expectation in place on the Reservist, planners can have greater certainty when considering the Reserve pipeline for sub units. 

A Word to the Wise

TD may feel aggrieved at my taking aim at him.  I do this with good intentions, in the hope that other writers are encouraged to pick up their calculators before their pens.  TD may have a point in that a smaller Army, both Regular and Reserve, is necessary.  But a wet finger in the air, and throwaway comment about cutting ‘circa 15 – 20 thousand’ jobs and a smaller Reserve is lazy and doesn’t offer any detail on savings.  Yet, similar lengthy pieces pass for rigorous analysis in many military circles.  In truth, they are, at best, skin deep analysis or more accurately, opinion pieces.   To be considered credible analysis, empirical rigour is needed. 

Conclusion

Reserve Forces should give strategic depth to national defence and consistent operational output at the sub unit level.  Yet high fixed costs and low operational output make them appear poor value for money and consistently places them in the zone for cuts.  To reduce fixed costs and increase output Defence needs more bang from the buck of the cost of permanent staff. 

This article has proposed that Reserves units move to a system of ‘Uberised’ support for training and delivering personnel administration through shared services.  This approach would save £9M for the Infantry.  Permanent staff overhead would reduce from 88% to 65% of wages and with no loss in the number of Reservists.  This is not limited to the Infantry.  Savings of similar magnitude can be found with Combat Support (Artillery) and Combat Service Support (Intelligence Corps) units.  A simple extrapolation based on the size of the Infantry suggests that measures such as these could save £36M a year.  These changes could, if successful be used as a model for more widespread changes, possibly in the Regular Force.. 

British cycling dominated through the aggregation of marginal gains.  Sir Dave Brailsford left ‘no stone…in fact no grain of sand …unturned’.  If the Army, Regular and Reserve, began looking critically, and numerically at their people and how they were used, then savings could begin to add up to something like the gold that Brailsford found.

Writers note: In putting together this argument I have conducted significant analysis of workforce costs using Defence data.  Copies of the data will be shared with senior Reservists in the Ministry of Defence by the author. The full analysis will not be hosted by the Wavell Room.